Hey. What do you think about the idea of buying a house, letting the price double really fast and then selling the house?
Sounds like a good idea if I lived on another planet? Because I remember a bunch of my co-workers buzzing around asking eachother that same question about 3 or 4 years ago. And I'm sure plenty of people went out and actually tried it. Money was flying everywhere.
A year ago, one of my bosses was telling me, "I usually go all out for Halloween. I love Halloween. I usually drop about $1000 decorating for Halloween. But this year I bought a house and now I don't have any money to do that."
I said, "Maybe instead of decorating, you should just post a copy of your home mortgage where everyone can see it. 60 YEAR! ADJUSTABLE RATE! INTEREST ONLY! BWAH-HA-HA-HA!!! That should scare people."
And what if there was some car salesman out there selling fancy italian sports cars to blind people? You might say, "Hey! Why are you selling these cars to blind people?"
And the salesman says, "Their checks cash just as good as anyone else's. They have cars. I have money. Everybody's happy! Why do you have to ruin our good time?"
So you say, "Aren't you worried that these blind people might wreck these cars? They might hurt themselves and others."
And the salesman says, "Sweetcheeks. You worry too much. I will personally INSURE all of these cars. It's covered."
And then when all of the cars have been crashed the salesman says, "Oh... um... about that insurance. I don't actually have the money to pay for the cars those guys destroyed."
Does it seem like something that would never happen? Aren't the warning signs there? Doesn't the situation defy COMMON SENSE?
And yet this is what has happened with our economy. I would think someone smarter than a ditch-digging loser like myself could have foreseen this.
You might think it's fun to hit Vegas, but everyone knows that Wall Street has the coolest casino in the Universe. Things that would never be legal for you and I in our humble little towns are encouraged on Wall Street. Would you like to sell and collect money for things that you don't own on a daily basis? What if those things didn't even exist? You can! Just contact a broker.
Bush and the boys are waging a war on naked short selling. This isn't the cause of nor the solution to our financial woes but at least it looks like something is being done, no?
People like you and I work. But Wall Street is a game. A serious game. For big boys. The housing thing was big fun years ago but there isn't any money in it anymore. And Wall Street is a game that requires money. When a company is making money, everyone is happy. Fur coats and private jets for everybody! But when business is bad, those CEO's stick out their bottom lips and make those glistening puppy-dog eyes at us and our soft-hearted leaders in Washington say, "Okay. We know you never share your profits with regular folks but rather than lose your shirt, we'll have the tax-payers pay for your mistakes. We know there aren't enough golden parachutes to go around. Now run upstairs and brush your teeth and then it's right to bed."
And then Pa looks at Ma and says, "I know we don't have the money. The only people who can pay significant taxes are the rich... and we know we aren't going to tax them. We've still got this war going on and I really wanted to send a guy to Mars... China has already loaned us billions, they'll probably loan us billions more, don't you think? Okay then, it's settled."
And if my math is correct, $700 billion should be plenty to cover the $5 trillion in home loans that Fannie Mae and Freddie Mac insured. And the FDIC probably has more money in their couch cushions than they think. And those other banks can file bankruptcy, unless China will loan us more money tomorrow. And the next day. And the next day. And the next day. And the next day. And the next day.
And it's strange because now everyone is talking government regulation like it's sent right from Heaven. Even John McCain, despite his outspoken history against regulation.
Once you have achieved success, you too will learn that nothing sucks worse than running out of imaginary money.
Let's go shopping. The price of gold is up but that doesn't mean you shouldn't buy it.