Maybe I have just become more pessimistic with age…OR maybe it is that I see things more clearly through an unfiltered lens these days. I watch everyone just cruising along but I am here to tell you that all is not rosy and bright in the near future and I say this with 100% confidence. I hope this blog opens someone’s eyes out there.
It is nearly 14 years to the day since I drug my family and myself through “complete broke”….bankrupt…all out…done…$5 in the account. At the time I was embarrassed and humiliated…not to mention down and out with nearly no assets left to my name. Without my parents I don’t know what we would have done…a couple small loans and a lot of positive help or who knows where the road led. I wondered how I went from a $200k/yr job with a cocky swagger to this guy that has his family eating spaghetti, grilled cheese, and/or hotdogs 5times a week & driving his Grandpa’s used truck. Life and God have a way of putting things in their place where they belong….Looking back maybe I needed knocked on my ass.
It was 2008….it happened ultra fast and unless you were wrapped in it…most never really saw it coming. I personally saw it coming like a freight train. I was able to make enough shorting stocks in the market to make most of my debts “right” with local creditors but in the end there is no way to beat mathematics. We had too much real estate, too much debt, and all our assets (mainly real estate) were no longer even liquid. You would think it would be impossible to go from a million plus on paper to broke with everything out of your control but it is possible.
I had been one of those evil “mortgage brokers” for nearly 10 years and stumbled into a red hot fabricated market. My company took off like a rocket ship and times were incredible. I honestly don’t regret much as the result would have been the same. Going broke has a way of changing a man…I am not sure if it changed me for the better or worse but that chapter is gone and I am simply not the same person.
I write this blog and share my story because ironically enough….here we are again. The variables are completely different this time…and you really can’t even compare the overall scenario to 08′. Real Estate obviously effects those that are in it far more than others but the overall variables driven by real estate look horrific. I fear this is far worse than 08′.
Unlike 2008 this problem isn’t created by oversupply of real estate and ridiculous lending guideline creating fabricated buyers. The problem in the current time is real and deep….government created and impossible to solve. Rates went FAR to low for FAR too long and the repurcussions are going to be real. This would never have been a problem until the current government printed trillions and self created this inflation that will be impossible to tame and a Fed who simply doesn’t understand.
The Fed is doing the “historic” right thing by raising interest rates but this will do nothing but create massive delinquencies on credit cards and literally stop the housing market in it’s tracks. The reality is that nothing can really be done until this crashes and bottoms out. YOU may call that pessimistic or negative…I call it reality. I am just hoping I am wrong on the severity.
Make no doubt about it….the fundamentals right now look the worst they may have ever looked and it this goes South it won’t be pretty. I watch as many wander around driving their fancy cars just like me some 14 years ago and hope my fate doesn’t happen to them…but a siren should be sounding. It is not that far away. You can’t explain what’s on the horizon…You can’t “warn” someone…Unfortunately..you just don’t “know” until you go through it. Warning bell sounded.
