The American dream of owning your own land goes back to the Pilgrims coming to America searching for a home to call their own. Never mind, there were people living here already – that’s a different story.
I grew up in Nebraska where the pioneer history is part of my family roots. My father was raised on the ranch that had been “Homesteaded” by his grandmother – a single mother with six children who pioneered from Pennsylvania in the 1800’s. Maybe it’s those roots that make it difficult for me to see real estate as anything other than a tangible asset to support American families’ quality of life, and financial security.
I’m not an expert in the history of the financial markets. But doesn’t it appear that the mixing of real estate investing with Wall Street dynamics seems to be a unique phenomena that developed post 2001? Is there some connection between the Dot.Com Technology stock crash, and the availability of the “creative” mortgages that fed the mortgage-backed securities, creating an economic bubble and also the current collapse?
- Nov 2005- Noel Sheppard of the Business & Media Institute about the Housing Bubble.
- Wikipedia’s Timline on “The Housing Bubble” includes the following insightful comment:
Other warnings came as early as 2001 when the recently deceased Federal Reserve governor Edward Gramlich warned about the risks of subprime mortgages. Reuters reported in October 2007 that a Merrill Lynch analyst issued similar warnings in 2006 that companies could suffer from their subprime investments
- Billiionaire Mark Cuban comments today in his blog…
After the Bailout – can the Bankers Who Caused the Mess Fix It?
Wall Street investing and real estate investing are both parts of a sound financial portfolio. It seems that we lost sight of the unique differences, and people were short-trading properties like commodities, fueling the mortgage-backed financial markets. It’s easy to blame the individual investors, but the same companies who the Federal “bail-out” is focused on salvaging, are the companies who promoted irresponsible lending practices. Rather than Federal funds going to help the American families, the $700 Billion “bail out” is going to rescue financial institutions that helped create today’s problems, leaving more and more families homeless.
It’s interesting to me that whenever the economy suffers, there’s a national focus on increasing consumer confidence and consumer spending to fuel the economy. Yet today’s solutions are all focused on saving financial insitutions that have already shown they are failures – with no direct immediate impact on the American consumer and homeowner. So, do we believe the consumer impacts the economy? If it’s true every other time – why is that being ignored now?
There are better ways to spend $700 Billion to help the American economy with a positive impact on individual families. What are your ideas?