Feeling Fed Up?

Wow, this past week has been such a bombshell that I feel like I've been holding my breath to wait for the dust to settle a bit before even attempting to write about it! What a mess our nation's financial system is in. No ifs, ands, or buts about it-- it's all thanks to the greed that swallowed every ounce of common sense financial institutions used to be known for. I'm just warning you ahead of time-- I'm not sure this post has much to do with real estate. At least not directly. It's more just my own venting off steam. It might even strike you as comical! By now, you've probably read enough of the headlines, enough of the gloom and doom to be able to recite lines like this, "Lawmakers are scrambling to put their mark on the Bush administration's $700 billion plan to save financial market- a fast moving test of wills that could reshape one of the biggest bailouts in U.S. history." (WSJ 9/22/08). Being beyond bewildered with these sort of statements, I feel compelled to trace this financial crisis poster child to its very core! You'll see, it's already in Wikipedia as the "Financial Crisis of 2007 & 2008!" You may have already decided to stop reading right now. Totally understandable. I wouldn't blame you in the least. It would be right in line with the current American mentality about banks, "Get out while you still can!"

Kidding aside, I'm really not that old (age is a relative concept, right!?). I was a child of the 1970's. I remember 1976 in particular. Okay, I was 7 then. It was the bi-centennial year, and it was also the name of a certain well known gas station, '76. I was naive enough to think that they would have to change their name to '77 when 1977 arrived-- and how many signs would they have to change every year!? As I remember from a limited perspective of youth, it was also the era of gas lines due to the gasoline shortage. People making runs on gas stations thinking that they were going to run out of gas. Growing up in Phoenix, Arizona- it wasn't exactly what you'd call fun to be stuck in one of these 'gas lines' in the middle of summer! But what choice did people have if they wanted to fill their tanks? My mom had just about the ugliest Ford Pinto Station wagon you have ever seen. It was one of the ones with the fake wood paneling on the sides. My goodness, you couldn't have picked an uglier car with your eyes closed! Thank goodness I was only 7, or I probably wouldn't have been caught dead in that beast. The story goes that on one mild 115 degree summer afternoon, we actually did run out of gas. It was near Fountain Hills (in the middle of no where). I now intuitively understand the reason Apache Tears are called Apache Tears! Mind you, this was before GPS systems, before blackberries, before cell phones! We hoofed it for miles with limited water and a gas can, finally setting our bulging eyes on a swimming pool that wasn't a mirage- it was real. (My mom was always accidentally finding adventures). Luckily the nice owner of that home not only gave us water, but he took us to the nearest gas station to fill the gas can & then back to the car. This may be partly to do with why I am in real estate today. It's possible that nice homeowner saved my life when I could have become a statistic.

Flash forward a few years. To the mid-eighties. I was a teen. It was a totally (to use the "Valley Girl" lingo) cool time to be a teenager in the 80's! Granted my youth was completely void of comprehending dire economic times. My family was middle class, and I never saw us struggle to make ends meet. My dad would tell me stories (that I doubted were even true) about being a child of the post WWII era, and what the meaning of rationing was. It was like learning about life on another planet! You might think it exists, but you have no yardstick to relate to it. Yes, growing up in the 1980's was all about excess. Excess hair, excessive houses and cars, excess government spending! Remember Ronald Regan and his famous Reaganomics? If you ask me, our favorite Hollywood President was truly the start of this financial crisis. Supply side economics. What a concept! And to think that we all had this little nagging fear in the back of our minds that the communists were going to blow us all sky high with their nuclear weapons. We had to have a massive nuclear arsenal to defend our country. This was how Reagan got us out of the economic crisis of the 1980's. I remember doing a research project on Chernobyl that really opened my eyes to the dangers of nuclear power being mismanaged. I still wonder where all those war heads are today.

While I was reflecting on the cause of our current economic crisis, it sort of dawned on me that every generation has its economic crisis. This one just seems to be the mother of them all! Thinking back to after I graduated from college. It was 1992. I started a fledgling coffee business that was located in the courtyard of a failed savings and loan. I knew that the savings and loan disaster caused our government to form the RTC (Resolution Trust Corporation). But I didn't really know what caused the S&L's to fail. There was Charles Keating, whose name we most remember with the S&L failure. Remember him? My father & I were on a flight to LA (to connect to a flight to Maui) when we saw him. This was in November of 1991. I remember everyone was booing him, taunting him with lines like, "What happened to the private jet, Charles?" Poor guy. In fact checking for this posting, I see that our very own Arizona Senator John McCain was one of the "Keating five." Back to the early 1990's, when I owned a coffee business that occupied this vast space that used to be a fallen S&L. We had that location for 6 years, using the basement of the prior S&L as our commissary where we washed the dishes every day. I had enterprising fantasies of converting the bank to a night club, that could be called "The Vault." I pictured bartenders behind the teller windows and the actual vault being the center of the party. Okay, so I've always had a vivid imagination!

Today, the vacant bank building that housed the dreams of my first business venture looms in my mind as a symbol of our nation's current crisis. I never understood what caused the S&L's demise up until now, but I spent the first 6 years of my adult working life occupying the vast dark spaces of a ruined financial institution. Six years working hard to create a viable business out of the vapors of another larger businesses' failure. Bottom line is that's the very essence of the American dream-- making something out of nothing! Creating a new vision out of some one's failure. Out of the dust of ruins. It's been done before in this nation. It's why our fellow countrymen have been known to be called "Mavericks." I'm hopeful that this current crisis is no exception to past crises. And while it may seem virtually impossible to be optimistic at this juncture, take a look at some of the points in the Time article from 1990 (link to Charles Keating above). The overall verdict is that things are about as dire as we decide they are, and of course they seem a whole lot worse when you're up to your eyeballs in alligators! What choice do we have now, but to move forward from here. Hopefully we all learned something valuable in the process that will cost all of us time, money, and lost opportunities.

I used to think of banks as venerable institutions. Visions of massive marble Corinthian columned buildings where old men with horned rimmed glasses curl their moustaches with the tips of their pencils while they crunch numbers and weigh the pros and cons of each and every loan. That's how I thought of banks before this financial disaster. Their decisions stopped making sense to me about 4 years ago, and I would hope now in hindsight their decisions didn't even make sense to them. I guess (as a point of reference) I'll be telling my kids the story of the gas lines in 1976 now. I'm sure they will be as deer in the headlights as I was listening to my own father's economic crisis stories of post WWII America.

Perhaps some of those number crunching old men will be greeting you at the front door of your neighborhood bank soon? After all, I've been told countless times that "history repeats itself." My kids will have some great stories to tell their kids in about 20 years. I'm just guessing, but perhaps their kids will think they are from another planet!

Written by Sarah Ley
BSBA, ABR, CRS, CNHSA,
Tucson Realtor with Long Realty
Direct: (520) 404-0544
http://www.sarahley.longrealty.com/
sley@longrealty.com