12 December 2007

Because in every boom the old rules don't apply.

Remember the tech boom? Remember how everyone (i.e. market analysts, industry shills) told us that in the New Economy, things like P/E ratios and actually making money didn't mean anything, because it was all new -- except apparently it wasn't, and when the house of cards collapsed people who hadn't been lucky enough to cash out on time were stuck holding stocks so worthless they might as well have papered the walls with them? But back then, it was all different, and things were never going to go back down...brilliantly asinine books came out with titles like Dow 4o,000...

Remember the housing boom? Oh that's right, we're sort of still in it -- we're on that precipice when the ground sort of starts downhill and then suddenly disappears. Everything changed then, too...houses weren't things you lived in, nice names for a necessity called shelter; no, they were investments, and despite the fact that you couldn't liquidate your investment without risking your shelter, people seemed to believe that the ATM machine called their homes would never run short of cash. We bought houses with interest only loans. We bought houses with ARMs that were only logical if you believed, against all logic, that interest rates would stay at historic lows forever.

But of course they would...because everything had changed.

Well, it's changed again. But we've known that for about a year and a half now, haven't we? It's just that the chickens, to borrow from Malcolm X, have come home to roost. Fairfax County, one of the wealthiest counties, now projects a $220 million shortfall tied to the housing crisis. Local builders are desperate. At least once a week I'm checking out Bubble Meter to follow the latest tidbits -- it's almost as good as a certain website tracking the tech collapse was back in the late 1990s (anyone remember the heyday of this site?). Housing Panic is also very good.

I'm convinced we are a lazy, complacent society that has little interest in examining ourselves. The whole of our culture is now disposable and meant to last no longer than our next paychecks. Even most otherwise intelligent adults have no interest in debating the merits of plans but are rather caught up in the latest fad, the latest "disposable policy," and the utterly unconvincing belief that we live ahistorically: that everything has changed.

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