the economy

[Andrew Anderson]

Explaining how debt, especially mortgage debt and its high ratio  
leverage, is the foundation of the banking economy is rather outside  
the preferred topics for this list.  I'm not blaming the poorest  
members of society for the meltdown.  I am blaming all the "investors"  
who thought they could do more with loans that didn't have demanding  
terms.  To be frank most (maybe 90% of the $s) are white who got  
themselves into trouble with too many houses or too big a house.  That  
risky loans became the de-facto standard of banking here is what got  
us to this point.  As to politics, the policy was attacked by  
democrats first and for good reason.  As with all well-intended  
government policy, unintended consequences are what we all usually get  
saddled with.

The main point is this, don't let the talking heads discourage you.   
Your economy is the >-real-< cash economy.  Any parts of the country  
where the economy is heavily debt based will experience more pain but  
in general we are the engine upon which that debt based economy feeds  
and there isn't anything wrong with us!  We can keep on tuning and  
doing all the other side jobs we can rustle up.  We probably won't be  
able to finance any of our jobs, but then how many did you ever  
finance before?  Our clients are less likely to have difficulty paying  
us on average then some of the other markets.  There will be some belt  
tightening and the banking economy will get some much-needed sobering  
up.

Andrew


On Oct 8, 2008, at 5:38 PM, Richard Brekne wrote:

> Er... uh... not to get into anything off topic I will only say this  
> once.  Trying to hint that Clinton is even in the slightest at fault  
> for the present situation is.... well being a good Christian etc etc  
> etc. Clinton came into office facing the highest deficit in the  
> history of the country, balanced it for the first time in over a  
> hundred years, and got the economy rolling bigger and better then it  
> had been in many decades. Quite the trick to be sure.  Bush has  
> nearly tripled Reagans deficit record and now has punged out another  
> near trillon dollars (without sufficient return guarantees to even  
> dream about this having anything to do with anything remotely close  
> to socialism) to fill the pockets of those wheeler and dealers whom  
> already have squandered away so much of Americans pension savings  
> its ridiculous. I mean for crimminy sakes... loans to the risky  
> clients outlined below means small loans to a small percentage of  
> Americans who couldnt possibly borrow all that much to begin with  
> regardless of policy. How many more times that was borrowed by  
> fairly well off middle class (a fast dwindling species btw) in  
> double mortgage schemes where a guy with half his house paid down  
> figured he could buy another one... rent it out and get it to pay  
> for itself.... ?  And thats just the little guy scenario of that  
> kind of thing.  Lets get real here. Blaming this on what amounts to  
> a few billions in loans to the absolute lowest echelons of American  
> society is.... well... etc etc etc.
>
> RicB
>
> I've sold more pianos this year than the last several years  
> combined.   I'm expecting to sell more before Christmas.  I'm  
> getting more calls  for piano service.  I never call customers  
> because I'm too busy  generally.  Economy is 90% a psychological  
> phenomenon:
>
> This current slow down did have some pre-cursors.  Clinton ran on   
> racial integration especially in the financial sector and made good  
> on  his promise by sending out Justice Department Lawyers to  
> threaten  bankers that if they didn't improve on their balance of  
> customers  (racially) that they would be sued by the Justice  
> Department with the  deep pockets of the American people behind  
> them.  Bankers are a  cautious lot and when pushed they asked what  
> could they do and they  were given an outline.  Essentially they  
> were to give loans to risky  clients and develop certain types or  
> risky products.  Democrats and  Republicans that were close enough  
> to the issue to understand the  ramifications protested that this  
> would result in a time bomb going  off when those unqualified (not  
> by race) clients couldn't make their  payments.  They were viciously  
> labeled as racists without regard to  party by the Clinton machine.
>
> The "rules" or psychological climate changed and risky banking   
> products became the norm.  While we had good growth everything   
> worked.  But, like it or not, taxes do drag on the economy and we  
> had  the Clinton tax-caused recession going into Bush's first term.   
> There  were some economic measures taken in the form of tax cuts and  
> stimulas  in the form of a tax "refund".  This only delayed the  
> inevitable as  all those pigeons sent aloft (fundamentally bad  
> loans) came back down  to roost.
>
> This brings us back to psychology.  We can let the talking heads   
> convince us that things are terrible or we can explore the reality   
> that real, cash, economy is local.  That larger debt-based economy  
> is  a house or cards that crashes and folds in fairly predictable  
> cycles.   It re-arranges itself and takes off again eventually piggy  
> backing of  the real cash economy you and I make in our every-day- 
> lives.  It is  going to be hard to get loans for a while.  So what.   
> A cash based  lifestyle makes a lot more sense.  Need more money, go  
> out there and  make it.  Re-examine your "needs" too and pay bills  
> in order of  importance: food, housing, clothing and then everything  
> else in its  order.  Sometimes you have to look further and work  
> harder but  eventually there is something out there for someone  
> willing to make it  happen.
>
> Never debase the value of the service you provide by attitude or by   
> reduced service.  We do serve the people most able to pay in  
> general.   That should be a comfort.  Confidence on your part begets  
> confidence  on the part of your customer.
>
> Andrew Anderson
>