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December 12, 2007 [ More archived home pages here ]

Taking Responsibility When Responsibility Comes Due


The above image, Subprime Quantum is also available as a Desktop

Today's song is Bad Moon Rising by Creedence Clearwater Revival, released in 1968.

One of the leading indicators of the economy over the years is the holiday season sales. This year sales are down and the in-store mall traffic is depressed.

The most significant belief behind the slowdown appears to be the subprime meltdown. The foolish practice of lending mortgage money to those who should not have been lent money to has come home to roost. Now the lenders are starting to pay the penalty. Here is one example of a financial institution feeling the pain:

"After cutting 1,000 jobs and dismantling much of its subprime mortgage operation in September, Seattle-based WaMu will now get out of the business entirely. The company said it will close about 190 of its 335 home loan centers and sales offices, shut down nine call centers and eliminate 2,600 home loan workers and 550 corporate and support jobs."

Americans in general are worried about their current situation and their future. The recent agreement to freeze interest rates for some subprime borrowers is only slightly approved by the majority surveyed about it.

The bubble has popped and all the air in that subprime real estate balloon has escaped. The effects are widespread and spreading further. More problems will arise from this mess. Don't waste too much time pointing fingers, that won't help you.

It's been along time since a large recession took place here in the United States. A whole new generation of young people have been born since the last one in the early 1980's. They will be tested for the first time and maybe come to a new understanding of what it's like to persevere in a recession. It won't just be a history lesson anymore, it will be current events.

I figure the credit-crunch will last about two years, deeply affecting many parts of our economy. When that cycle has run its course, Americans will have a chance to reexamine where they have been, where they are at at that moment, and where they want to go from there. Those that keep their head and patience now have the best chance of making it through with less impact than those that don't keep their perspective. I know this from my own experiences of dealing with recessions.

There will be those that want the government to bail them out. I hope the government doesn't bail anyone out. We should maintain the safety-net provisions for those that are the most at risk, just as we always have done. But people who took risky loan positions and lost need to serve as an example in our free enterprise society.

Keep in mind that when the bottom of the credit-crunch hits, that's the time to invest in the next wave. Homes will cost less then, loans will be available to those who can truly afford them, new business opportunities will arise. Many unemployed people will go back to work with a new healthy respect for their own economic welfare with an eye on bubble-producing factors to keep such foolishness we are experiencing now from occurring too soon again.

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I am very impressed with the LinkedIn network group. My connection list in that group is growing from my current and/or previous associations with those people listed there. That's very cool!

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My friend and author, Bob Katzman, published his latest book in November. He's offering it for $9.95 this holiday season. I've read and reviewed his first three books. I intend to review this next one soon.

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Sunny but cool in the low 60's here this week. What a terrible mess in the midwest!

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Be aware of this new Internet attack.

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The Denver airport is offering free Wi-Fi Internet connectivity. All airports should offer this free service for travelers.

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The Dutch parliament sees the light.

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Flashed-based drives make a lot of sense. When quad-processor laptops appear, having those kinds of drives will help battery life and performance.

Don


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