There were a number of investors, novice and veteran alike, who had recently been through a foreclosure seminar and were excited about the possibilities in the market. However, it was the more experienced investors who were most fearful. Many of them had been investing for many years, if not decades, and had never seen anything like what we are experiencing now. There were mortgage brokers who were unable to get deals through because of the credit freeze and realtors who couldn’t make deals happen because their buyers couldn’t get loans. The big question seemed to be, would the whole house of cards that is the economy come crashing down?
Generally speaking, savvy investors can make profitable deals in any market, up, down or sideways. The concern is that there is a total lack of direction, they don’t know which way to turn. The Government bailout (now being called a rescue) is a big pile of money without a clear set of instructions on how it is going to be used. A big fear is that it is going to become a big cesspool of corruption, much like Washington itself.
The other thing that jumped out at me as I worked the room was the anger that people felt. There was anger that irresponsible behavior was being rewarded, why should those who made idiotic mistakes be bailed out? They were mad about the CEO’s who were rewarded with excessive pay, perks and parachutes as the companies they ran crumbled. There was resentment over the fact that greed had run rampant and left common sense in its wake along with the wreckage of banks, brokerage firms and insurance companies.
However the real loathing was reserved for our elected officials. The caped crusaders of the beltway who are supposed to be looking out for us, can’t seem to rise above their own self-interest. The House of Representatives couldn’t bring the $700 Billion bailout package to a vote without the House Speaker making a self-serving partisan speech that ultimately doomed the bill. It was left to the Senate to push a bill through but they couldn’t get it done without larding it up with billions more in pork. While Democrats and Republicans were busy playing the blame game and pointing fingers at each other, the members of the real estate club couldn’t believe that these clowns didn’t get it, people are fed up!
Economic Course Correction
Paul A. Volcker – Former Federal Reserve Chairman