Merry Christmas, Happy New Year!!! And a Book Review

At at time like this, the "fin du" year, I am reminded of what I am grateful for...I love my family, my friends, my home, my work community (company, manager and colleagues), my clients...I am grateful that my children are healthy, my home is still standing, my friends are so wonderful, my clients are so loyal, the dogs are so precious, and, particularly, that 2009 is over.

There is something so reassuring about the end of a year, and the beginning of a new one. This one will be different, it will be better. We will have more confidence, if not necessarily in our leaders, or our economy...but in ourselves.

I'd like to make a book recommendation for 2010, it's called "Devil Take the Hindmost -- A History of Financial Speculation" by Edward Chancellor. Mr. Chancellor studied history at Cambridge and Oxford, and in the early 1990's he worked for the investment bank Lazard Brothers. He's a freelance contributor to the Financial Times and The Economist. All of his experiences no doubt contribute to this very readable and interesting book, which should be required reading for all 8th graders (accelerated learners) and at the very least high school Juniors...I'm still reading it, but so far, my favorite passage involves a quote from Daniel Defoe, who in the throes of the 1720-ish South-Sea Company scheme, understood perfectly

"that trade (like credit and speculation) was dependent on confidence...(He) penned an impassioned call for calm reminiscent of Roosevelt's famous inaugural address in 1933 ("the only thing we have to fear is fear itself"). "For God's Sake, and for our Country's Sake," wrote Defoe, "let us consider what we are doing! 'Tis against Ourselves! 'Tis all setting the Knife to our Own Throats! Setting Fire to our own Houses! Destroying our own Estates. Our own Commerce, and our own Hopes! We Hurt no Body but ourselves; Impoverish no Families but our Own; and Ruin no Families but our Own; and Ruin no Country but Great Britain."

For so long, through 2005, 2006 and 2007, while home prices were actually rising, the press was crashing about our ears talking about the "housing bubble" (some would say, warning us). Later, in 2008, the confluence of the actions of our government's policies, and the greed/ingenuity of investment banks and stock brokerages, would bring down on all of us ordinarily greedy, ingenious people, the realities of inadequately vetted mortgage loans and the fraudulent practices behind them--the devaluation of real property. What a mess.

It is a very complicated situation, one from which we may well spend many years yet recovering. But Chancellor's book is illuminating, and in a perverse way, comforting. Our generation of real estate investors is not the first generation of investors to fall victim to greed and "irrational exuberance". Probably we won't be the last. But anyway, we will survive this, saved largely by our families, our friends, our clients and work, our homes that are still standing, our adorable pets, and particularly, our confidence in ourselves as survivors of one of the worst economic years of the (thankfully past) century. God Bless, Love and Luck to All, and a very Happy and Prosperous 2010...

This should be obvious, call your congressperson!!!

As Shaun Donovan, Secretary of Housing and Urban Development recently said at Harvard University, when one chooses a house, one chooses so much more than a house. One chooses access to healthcare, to education, to employment. One chooses a community. The illiquidity in the current housing market, with the number of foreclosures and the lack of availability of financing to buyers and builders of housing, has effectively taken away the ability of people to choose.

To go a little further along the lines of what Secretary Donovan said, when one chooses a home, one chooses a refrigerator, a carpet, a sofa. One chooses window treatments, and lawn care, and hvac maintenance. One chooses a plumber and an electrician, etc. etc. One chooses to employ literally thousands of other people who have been or are involved in the construction, maintenance, marketing, furnishing and protecting of that home. One agrees to pay the real estate taxes that support the schools, the park districts and libraries in the area. One buys in.

So far, the current administration in Washington has helped the banks and investment houses to make record profits and pay back billions in bailouts. They have designed a whole new healthcare proposal (one could argue that if people had jobs, they could have healthcare, too, under the prior system). Yet they have exhibited a seventeenth-century, laissez faire, blame-the-victim (of the investment banks!) approach to housing which has thrown the entire industry under the bus. A "first time homebuyer tax credit" and a "move up homebuyer tax credit" is great, but it's a little like offering a person, on the verge of total exsanguination, a tourniquet. Housing is a huge part of the U.S. economy. Builders, tradespeople, and all who are involved in housing both in primary and secondary ways have lost hundreds of thousands of jobs. We need some help, here, now. Please. Call your congressperson.

Is your appliance a clunker?

Apparently the Obama administration is getting ready to roll out a "cash for clunker appliances" program, after the first of the year. The Federal government will offer rebates of from $50-200 to offset the cost of purchasing a more energy efficient alternative to that old refrigerator (or dishwasher, or clothes dryer...any appliance). Here is a link to an article about the program from Angie's List:



http://e-ditionsbyfry.com/Olive/AM3/ANG32/Default.htm?href=ANG32/2009/12/01&view=document

Good Stuff from our Secretary of Housing and Urban Development

I'm passing along a link to a lecture by the Honorable Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development. The lecture was recently delivered at Harvard University's Joint Center for Housing Studies, a hybrid of the Harvard Graduate School of Design and the Kennedy School of Government and Public Policy. The title of the talk is, "Toward a more Sustainable Future: Housing, Place and the New Federalism". The talk was sponsored by the Foundation arm of the National Association of Homebuilders. One needs a certain amount of patience to get through the lengthy introductions and mutual admirations, but once Donovan begins talking, the effect is well worth the wait. When you choose a house, you choose so much more than a house. You get the community, access to health care, transportation, education, everything that is important for your family. Donovan's comments were fascinating. But then, I like this kind of thing.

http://www.jchs.harvard.edu/dunlop_lecture/