You Ain’t Seen Nothing Yet…

While politicians on Capital Hill take group photo’s, play electoral games and contemplate their proposed bail out of our plagued financial system, the stock market continues to grind lower.  The rescue plan would involve the U.S. government spending $700 billion on questionable assets from the growing number of distressed financial institutions – nationalizing the money losing part of the financial sector. As President Bush try’s to bully Congress into “rising to the occasion” and approving the legislaton, leading lawmakers resume difficult negotiations that will be debated for years to come whether the bail out plan gets approval or not.

Let the reality check record show that neither portfolio managers, economists or government leaders know for certain if the stimulus plan under consideration will help stop the bleeding or even stabilize markets at all.  

What we do know..?  The subprime mortgage crisis, credit crunch and weakening dollar have crippled capital markets sending financial giants crashing to their knees and pushing our economy to the brink of collapse. Making matters worse, the housing market continues to plummet, there’s no credit for anyone with anything less than perfect credit history and the consumer is dying. People on fixed incomes, who thought  they were on cruise control, are now feeling the inflationary wrath of raging fuel, food and healthcare costs.

Bail Out Plan or no Bail Out Plan  – the economy is in horrific shape and about to get worse… a lot worse. As the current economic downturn gains momentum and we drift deeper into recession, it’s time to start thinking defensively about protecting your assets. Americans could soon

Understanding the Subprime Mortgage Crisis

Our economy is in deep shit and like it or not – you’re sitting smack dab in the middle it.  Lots of people are asking the same questions:  “How the hell did we end up like this?”,   “Isn’t this just a Wall Street problem?” and “could this recession really effect me? – If so, how bad could things get?”    To fully understand why the U.S. economy is in such bad shape and getting worse, one of the things you need to do, is get a firm grip on understanding the Subprime Mortgage Crisis…

The prudent man’s rule when calculating how much one can afford to pay for a home without getting in over your head is typically no more than 3-4x your annual income. 

In 2005 (the peak of the United States housing bubble) the economy was booming, jobs were plentiful, consumers were spending and the real estate market was unstoppable. However, irresponsibly unnoticed the median home price had become six to nine times greater than median income.  That was the sign banks chose to ignore.  Despite this dislocation, lenders were tripping over themselves to make loans based on the unrealistic misconstrued concept that property values would always continue to soar.

Competition became so fierce among lenders they began seducing the unfortunates, people with bad debt, low paying jobs and sketchy credit histories.  Based on their less than adequate financials, this subprime underclass that had no business even buying property, had become mortgagors.  Both the lender and the buyer knew they couldn’t really afford that dream home – but what the hell, those

Classic Saturday Morning Cartoons

Was there anything better then rolling out of bed, pouring yourself a bowl of Captain Crunch with Crunch Berries and plopping down in front of the TV in your pajamas to enjoy your favorite Saturday morning  line up?

1970– In the early days we were entranced by the slap stick off-the-wall shenanigans of Bugs Bunny, Tweety, Sylvester, Heckle & Jeckle, and Woody Woodpecker.  And who could forget that pathetically mischievous, yet ingenious, Wile E. Coyote and how his dastardly plans to capture the Road Runner were consistently foiled by those faulty ACME rockets or simply out-witted by the Road Runner himself (which usually ended up with an explosion and trademark puff of smoke).

1975– Kung Foo Fighting was at the top of the charts, Saturday Night Live premiered with George Carlin as the host, Bill Gates & Paul Allen were

One Eyed Jack

Back in the late 70’s and early 80’s, my brother and I spent many road trips in the back of my mother’s station wagon. Booster seats didn’t exist, there were no such thing as air bags and seat belts were just something you tucked into the crack of the seat to get them out of the way. We were simply tossed into the back cargo area like loosely packed groceries.

There were no handheld gaming devices or cell phones – we had one of those primitive triangular peg board puzzle games and the Rubic’s Cube.  Most of the time we would just sit back there and watch the other cars.  Like many kids on long trips we found amusement in waving to anyone who would wave back, signaling truck drivers to blow their horns… but, our favorite pass time was One Eyed Jack.

If you were playing One Eyed Jack, you had your nose pressed against the window and would once-over every car driving on the road… the shiny cars, the dirty cars, the new cars, the old cars, the fancy Cadillac’s and the dilapidated rust buckets. What you were looking for was a car with a broken

Your House As Seen By…

As Seen by Yourself

As Seen by Your Buyer

As seen by Your Lender

As Seen by Your Appraiser

As Seen by Your Tax Assessor

Virtual Childhood

Sitting by the window at Lorenzo’s, my local Italian restaurant, I watched as a man with no disability pulled his black Range Rover into the handicapped spot by the front door.  He and his wife got out of the truck and opened the rear passenger door where their son emerged.  The little boy couldn’t have been more that 8 years old and managed to make his way from the back seat of Daddy’s car, all the way to the table next to mine, where they were seated for dinner, never taking his eye’s off of his Gameboy.

Technology lacks the depth that feeds our souls.  When the children of today grow up and enter their 30’s, 40’s even their 80’s, it’s not going to be the Xbox, the Blue Ray disc player or the sixty inch plasma in the family room they had as a kid that gave them character.

Explore nature.  Go for a walk in the park, take hour long hikes in the forest -be sure to check under every rock along the way. Search for frogs, lizards, snakes and anything else you can find.  Go bug hunting.  If you’re lucky enough to come across a stream, kick off your shoes and appreciate the crisp cool water as you wade through it.  Go Camping, take them fishing and have picnics in the grass. Teach your children how to skip stones.  

These are the gifts that count, the ones that can be passed down from generation to generation – but you have to take the time.  It’s too easy to get home from work, pop in the latest Disney DVD in order to keep the little guys busy while you sit in front of your PC and recap your brokerage account.  

I’ve got nothing against Range Rovers, Plasma TV’s or video games but make sure your children realize that those are mere extras in life and not the things needed for happiness.  I know too many people who spend so much time trying to keep up with the Jones’s, that they lose sight of the things that truly matter.  Life is about the simple things.

When your kids get older and move out on there own, some of them my achieve financial success, some may not.  Some children will make it big, but then lose everything.  Money may come and money may go, but there will always be mountains to climb, streams to fish and trails to hike.  If you can teach your children to love and appreciate nature, then you have given them valuable memories of time spent with you in the great outdoors that won’t be forgotten, can never be taken away and can someday be shared with their own children.

-Regular Joe

“It is not how much we have, but how much we enjoy, that makes happiness.” -Charles Haddon Spurgeon