Clean Up Real Estate.org

Well, of course the Fed’s will step in and save the day! Some of the more righteous commentators in the financial world are even indignant that the taxpayer might foot the bill. They are talking about moral, get this, moral hazard from the bail out while over two million families are losing their homes this year. It is almost as if the word moral belongs in their mouths instead of lye soap. What use is cynicism if you can’t turn it to your advantage?

What is clear is that the whole system of market manipulation that failed everyone from the bankers on down the line does not work. Not for the brokers who made a lot of money during the inflation of the bubble. Not for the Real Estate agents who are now losing the bigger homes they bought during the boom. Not for Chairman Bernanke who is being derided for trying to save the financial marketplace from itself. Not for the President and certainly not for the millions of people adjusting to the fact that their home is now worth less than they paid for it.

Is what we need a return to the community based lending model that worked to get us out of the last depression? Maybe, but I doubt that will return unless we make it happen at the grass roots. This is going to wake up a few people to the fact that our financial markets are badly formed and too easily manipulated in this all too fast new electronic world.

It is not some evil speculator cornering the market for money, silver, oil, homes or corn. It is the pace of human thought that has been sped up by the electronic aids we all use today changing the value of everything. Markets that respond at the speed of light are subject to feedback and control mechanisms that can send them out of balance all too quickly.

In addition the whole world now has caught up with the idea that consuming more than you produce is a really good life if you can get it. Capitalism rewards some so well that the rest of us are willing to put up with it on the odd chance that we will be one of them. Of course no one in the next generation from the middle class will inherit anything. The reverse mortgage and other financial vehicles even more arcane are taking care of that once and for all.

Does anyone get the fact that our middle class has lost the class war? I think a lot of people do. And boy are they going to be unhappy when the real impact of this failure in the Real Estate market is finally and fully felt in their lives. I think any sane person would be running away from the Presidency instead of for it this time out. This will take more than government intervention to fix. It will take an engaged and perhaps even enraged populace seeking a system that works to preserve their assets and their quality of life.