You and I now underwrite mortgage-backed securities...

re: You and I now underwrite mortgage-backed securities...

ksmith — Fri, 21 Mar 2008 02:02:17 GMT

I feel like such a small minority here. Even my husband and the grandparents are too indulgent. I'm the one left holding the moral compass. The kids think I'm too strict and no fun...it is very lonely at times and I feel so ineffective.

Thanks for sharing...

re: You and I now underwrite mortgage-backed securities...

Matkins — Thu, 20 Mar 2008 21:35:09 GMT

From the comments that have been made, I agree that it seems that it will take a very dramatic change in the current cultural mindset to create a sustainable economic recovery. While I am not sure exactly how that would occur given a good portion of adult folks who have disposable income were raised in the generation of the Big 80s and the Greed is Good 90s. But I am inspired but what I have recently learned about the Freegan movement. Freegans are folks who shun consumerism and use unconventional methods of living to carefully minimizing their consumption. It actually goes much deeper than that, but I am still learning about this movement. I was really fascinated by what I saw recently on a t.v. show - professionals who could easily afford all sorts of overindulgent luxuries rummaging through N.Y. City restaurants, trash bins and groceries for food, furniture and other necessities. Even more surprising was that the items they found and the high quality of them. Most foods were never even opened. One statistic I heard was thatin one year- 1995, I think, it was said that 91 billion pounds of food was wasted by the American food system - from harvest to the plate. That is enough food to satisfy any Third World nation.

I emphathize with ksmith's comments about the difficulty of teaching children what I call the virtue of being economically moral. I find myself constantly speaking about how children in Africa would love to have so many choices in foods, clothing etc. My husband and I have promised each other that this year, there will be no or at worst only one toy per child. Last year, I think we were down to three. It will take small steps like this for all of us and a greater emphasis on what is truly meaningful in life to see true and lasting change.

re: You and I now underwrite mortgage-backed securities...

ksmith — Thu, 20 Mar 2008 18:02:18 GMT

Feeling better is a loaded question. I have much trepidation. I have little faith in our current adult generation.

I believe we can change for the better, but only if it becomes an obvious necessity. Our generation has never really known adversity- We have been if I may say too spoiled. Why change it if it ain't broke? Perhaps we are now reaching a point that it is noticeally broke. I hope we can all start to feel that it is time for a change... in behaviors..in priorities.

My larger concern is with our children. How are we raising them to behave? What are we teaching them to value? Somewhere we must break this cycle of immediate gratification/consumerism.

It must start at home one family at a time. One perhaps "unpopular" parental decision at a time. I am trying to be a good role model and I resist giving in to over consumption. Kids learn by example and we must do our best each day to set the bar for them.

My kids may "hate" me at times, but I think they will value me in time.

re: You and I now underwrite mortgage-backed securities...

KTrapani — Thu, 20 Mar 2008 13:59:55 GMT

Your comments are excellent. It seems as if we have been pushing consumerism and easy credit forever, so it's hard to imagine a different way. In fact, there was a different way not too long ago: we had over 40 years of gradual economic expansion from the mid-40's to the 90's that was based on a healthy balance of savings and moderate credit. The essential element of US economic dominance was the existence of a highly-educated society that drove innovation in manufacturing, technology, health care and finance. Folks in the US who are my age (45-54) have the highest rate of college graduates in the world. For Americans aged 25-34, we're 10th. That means other countries have more educated workforces and they will more likely drive innovation and economic development for the next 30 years. When we overlay this weakness with our trade gap (we already import far more than we export...) the prospects look bleak.

Further, as individuals and as families, we spend more than we earn and our savings rate is now negative. We have less equity in our homes than we've had in 80 years. We are in a mess.

That said, all is not lost. There are lots of "fixes" that would yield relatively fast results. Here are two:

- we can stop or moderate the corn subsidies for the production of ethanol. Ethanol production is worse for the environment than oil and the massive use of corn for this purpose is driving food prices up for all of us (it is unimaginable how many processed food products have corn as their base...)

- we can stop spending $2 billion a week on the war in Iraq. Directing that spending to provide health care for every American would allow us to re-drect those family dollars to savings or debt reduction.

As families, we can make dozens of decisions about transportation, consumption, entertainment and travel that will reduce our expenses and allow us to save or reduce debt.

So, if we all act with greater fiscal responsibility, doesn't that crash the economy on its own?

Nope. Our commercial model is fexible and responsive. If we stop buying cheap, unnecessary goods, businesses will stop selling cheap, unnecessary goods. If we stop spending $75 per ticket to see the Bobcats play, the Bobcats will quickly figure out how to sell tickets for $50.

One other thing is crucial to understand. Our markets rise and fall largely on investor- and consumer-confidencs. No one really thinks that Bear-Stearns was worth only $2 in a normal market. They collapsed because of a lack of confidence in the market about the financial instruments that supported their business: mortgaged-backed securities. Because of that lack of confidence, folks took their money out of Bear Stearns... a virtual "run on the bank." If that hadn't happened, BS would have weathered the storm and the owners would not have lost 95% of their value of the company (1/3 of which was owned by the employees.) If we adopt more sustainable spending and saving patterns and we all feel better about our financial circumstances, the "panic" will be gone and our markets will recover.

I have great hope that this "downturn" (I was warned recently not to call it a melt-down...) will correct our profligate ways and we will see immediate, positive results. I think it will take 20 years or more for us to recover our position of economic and cultural leadership in the world -- and, by that time we will understand that our leadership needs to be collaborative, not isolationist -- but we can begin now.

Does that make tou feel any better?

re: You and I now underwrite mortgage-backed securities...

ksmith — Thu, 20 Mar 2008 03:20:30 GMT

I agree with the statements, but I'm only clear on what is argued as the short sighted comsumer mentality that spending more will not work "long term". It has worked to date for America so what is meant by "long term"? What are the alternatives & what is the immediate impact we should expect? If we do all save and not spend, our current economic model will collapse- then what? What is a realistic time frame to weather this out and where will saving and minimizing consumerism take us? It is a radical shift in the way our society has thoought for years, and in fact been encouraged to think.

I need to see that a different path can be forged and one with a noble outcome.

The message appesrs to be invest, but not in selfgratifying short sighted purchases, but ones for more meaningful community winning endeavors. Sacrifice- look out of the box- give to a greater purpose. In doing so the economy will benefit in measurable meaningful ways for the longer run.

In addition, our comsumerism culture is directly intertwnded with other nations who rpely on us in this very role. Where will a change like this take the global economy?