| 10 June 2005 Quality Assurance I filled out the quality assurance questionnaire from the Financial Services company that enabled my latest foray into the world of real estate speculation. You know, the regionally frothy market that Mr. Alan Greenspan, Chairman of the Fed, talked about in testimony to Congress this week. The finance company wanted to know if my experience was a pleasant one. I had to indicate that it was. The road to ruination was paved with very helpful people, and I noted that on the “comments” section. Everyone was great, all the way from my Persian Realtor and the local finance lady who pre-qualified me, all the way up to the Corporate reviewing desk and the skeptical underwriter. I got the fever to play in the market for the usual reasons. Greed was a primary factor, of course, but also because I had a real need for additional floor space. I am drowning in stuff. Books and magazines, mostly, and assorted papers that will be thrown out the instant I leave the realm of the quick and join that of those who are not. The magazines alone are starting to drive me a little bonkers. I keep the Playboys, of course, because I think there is an intrinsic value to the articles, and ready access to classic figure studies. It is a function of the Baby Boom that Hef is hip again, his self-indulgent lifestyle appealing to a whole new generation of people who would just as soon spend all their time in their bathrobes. The Atlantic Monthlies are in a neat stack, because they are good for me. The first time I have an afternoon uninterrupted by the pool I am going to plow right through them. They take on the tough policy issues that I need to understand, and I have the slightly queasy feeling that I will get to the article that explains the real estate bubble the month after it has burst. Irrational exuberance, they say, which is another word for greed. On the one hand, Mr. Greenspan says there is no real estate bubble. Just a little regional froth. I don't know what that word means, precisely, as an instrument of economic policy. I suspect it is a technical term from the advanced Economics I never got around to taking. Or maybe it is just what it sounds like, the sloppy white stuff on top of the cappuccino that Mrs. Greenspan serves. You know her. She is Andre Mitchell, the famous frothy television correspondent. You'd know if you have been watching Entertainment Tonight, the infomercial gossip show that follows the evening network news and which I am having an increasingly difficult time separating from it. My friend Chris saw Mr. Greenspan in an airport one time, and the Fed Chairman was all by himself, no entourage or anything. He said he was a little fellow, and if he can wed a beautiful correspondent, I expect there is hope for us all. I don't know what to do about the stacks of the New Yorker Magazine, that keeps me up with everything happening in Manhattan . They come every week and I can't keep up with the cartoons, much less the movie reviews and the articles. I think I want to go visit the city someday. I keep a thick stack of the last three years of Vanity Fair. It is a lovely magazine, and I sometimes spend long airline flights or rainy afternoons ripping out the glossy advertising pages so I can follow the articles. It is amazing how thin the issues get when all the perfume ads are gone. I view the activity as a sort of housecleaning, and it is preferable to vacuuming. There is a definite upside to the loss of acuity of vision that comes with the aging process. I don't see a lot of things on the floor. But maybe it is because I am a guy. Anyhow, I bought the new condo because I needed more space to put the magazines in neat stacks, organized by month and year. I noted that on the Quality Assurance form, under the section asking if there was anything else they could do for me. Then I sealed it up. I was pleased that it was a pre-paid mailer, since I do not routinely have stamps in my desk anymore. What would you use them for? A letter? I guess greeting cards are the last practical application for that, and by the way, have you sent your Father's Day card? Time is getting short, and any more delay will result in having to go online and send something really expensive. The Quality Assurance form did not have a question about what is going to happen when Mr. Greenspan's long-term interest rates go up. I thought that would be useful. What with everyone mortgaged and leveraged to the hilt, it seems reasonable to think that all those interest-only mortgages and Adjustable Rates are going to be coming due at the same time. If interest rates go up over the next five years, couldn't the prospect of re-financing at ruinous rates turn the market into a panic of property dumping? There wasn't anything on the form to indicate my preference on that, so I guess I will just mail it as-is. Even with interest rates falling this morning to the lowest rate in 14 months, things are tough on some sectors of the market. It is bad enough here in Arlington just paying the taxes on the assessed value of the property. A lot of older people on fixed incomes are having problems making the payments, since the increase in value is all on paper and the taxes are painfully real. That is why I take the Atlantic , even if I don't read it as much as I should. It is the policy equivalent of castor oil. Just a few moths ago there was an about the Euro, and why the dollar had lost a quarter of its face value against it since the launch of the currency. It was pretty complicated. They did not specifically say that the dollar was frothy, but the net effect was precisely that. Mostly air. So even if you cash out of the market, if you don't buy Euros, what you are getting is a currency based mostly on air. I was uncomfortable with the thought that foam that was getting all over the inside of my wallet, but there isn't that much cash in there anyway. Anyhow, I suspect that the severe article by James Fallows in the Atlantic will explain it all when I get around to reading it this Fall. According to the blurb on the cover, he explains the future history of the economy and how everything fell apart after 2005. I imagine is it pretty informative and maybe he can define “froth” for me. I hope that issue is somewhere near the surface when I get everything moved and stacked neatly again. And besides, what would you do with cash, anyway? Buy a Starbucks? Copyright 2005 |