Wednesdays with Wendy: we may know more than we realize
14 April 2010
This morning with Wendy, during Mile One, I brought up someone I knew who was having difficulty getting a home loan. It led to this discussion through Mile Four:
Several years ago, Wendy and I used to look around our neighborhoods and marvel at the for sale signs and the prices being asked for a 1700 square foot 3/2 house (three bedrooms, 2 baths). What sold in 1998 for $400K was going for $1.2 million in 2005-06. No one we knew personally had gotten a raise at work relative to the increase in housing prices, so we assumed people had been given terrible advice and subsequently lost their minds. Someone told these individuals that they could afford the risk of interest-only loans. In a few years, if they couldn’t pay the astronomical mortgage that would come due, they could just sell their houses because the value of their home was going to continue to climb. In other words, the 1550 sq. ft. cottage that they just paid $1.1 million for was going to sell for $2 million in five years.
Wendy and I knew this was absurd. We weren’t guessing. We knew. You barely have to go beyond middle school math to understand the equation. If someone can afford no more than a thousand dollar a month mortgage payment today, and you saddle them with a mortgage payment that will be ten times that much in a few years, chances are GREAT that the person will not be able to pay back the loan. Most incomes do not increase tenfold in three years, wouldn’t you agree?
Alan Greenspan, former head of the Fed, has recently said he and his people could not have seen the resulting financial meltdown coming, nor done anything in hindsight to stop it.
I don’t know how many inspectors went into Iraq earlier this decade looking for weapons of mass destruction. There was a gaggle, okay? Before 9/11, many more after 9/11, they all came out and said, “Can’t find any. I looked in between the couch cushions. I even checked suspicious nuclear-looking sites and couldn’t find a thing.” They were told to keep looking. Still, as much as they thought Saddam and his cronies were shifty, they couldn’t actually put their hands on anything. W and his neo-cons decided to listen to a guy they named Curveball, who was actually an Iraqi living in Germany. Curveball, though he couldn’t actually prove a thing, told Bushie’s peeps what they wanted to hear.
During this time, Wendy and I read the news, listened to the experts and noted the facts. We concluded that not only were there no WMD in Iraq, we shouldn’t let beady-eyed Saddam, the leader of a country only slighter bigger than the state of California, with an army who rolled over and played dead within twelve minutes of our invasion in 1991, get our collective panties in such a bunch. Unfortunately, we did not have a direct line to the White House.
iCasualties.org now counts 4390 killed in Iraq and that’s just from the United States.
For all intents and purposes, I’m a suburban housewife and mother. Wendy is a partner in a law firm but does not specialize in real estate nor know any more about how the CIA operates than I do. We’re just a couple of chicks who form opinions based on common sense and instinct. I’m not even going to begin to tell you how well-schooled Alan Greenspan is. And he may have been a C student but George W. Bush graduated from Yale. They’re supposed to be smarter than we are. Time and time again, we think everyone in these positions of authority and power must surely know what they’re doing, or at least know more than we. Well, guess what? That’s not always true.
Wendy and I have decided to start our own firm. It’s name? Gut Check Consulting. Our slogan? “We have a feeling we know what’s going on.” Here are just a few things we’re knocking around that we discussed during Miles Five and Six:
Timothy Geithner is in over his head. Justin Beiber is actually 9 years old. Sandra Bullock and Elin Nordregen will not grow old with their current husbands. Twitter won’t be around in five years. Starbucks VIA instant coffee won’t be around in five months.
I could spend all afternoon on this, but we can’t keep giving it away for free.
This morning with Wendy, during Mile One, I brought up someone I knew who was having difficulty getting a home loan. It led to this discussion through Mile Four:
Several years ago, Wendy and I used to look around our neighborhoods and marvel at the for sale signs and the prices being asked for a 1700 square foot 3/2 house (three bedrooms, 2 baths). What sold in 1998 for $400K was going for $1.2 million in 2005-06. No one we knew personally had gotten a raise at work relative to the increase in housing prices, so we assumed people had been given terrible advice and subsequently lost their minds. Someone told these individuals that they could afford the risk of interest-only loans. In a few years, if they couldn’t pay the astronomical mortgage that would come due, they could just sell their houses because the value of their home was going to continue to climb. In other words, the 1550 sq. ft. cottage that they just paid $1.1 million for was going to sell for $2 million in five years.
Wendy and I knew this was absurd. We weren’t guessing. We knew. You barely have to go beyond middle school math to understand the equation. If someone can afford no more than a thousand dollar a month mortgage payment today, and you saddle them with a mortgage payment that will be ten times that much in a few years, chances are GREAT that the person will not be able to pay back the loan. Most incomes do not increase tenfold in three years, wouldn’t you agree?
Alan Greenspan, former head of the Fed, has recently said he and his people could not have seen the resulting financial meltdown coming, nor done anything in hindsight to stop it.
I don’t know how many inspectors went into Iraq earlier this decade looking for weapons of mass destruction. There was a gaggle, okay? Before 9/11, many more after 9/11, they all came out and said, “Can’t find any. I looked in between the couch cushions. I even checked suspicious nuclear-looking sites and couldn’t find a thing.” They were told to keep looking. Still, as much as they thought Saddam and his cronies were shifty, they couldn’t actually put their hands on anything. W and his neo-cons decided to listen to a guy they named Curveball, who was actually an Iraqi living in Germany. Curveball, though he couldn’t actually prove a thing, told Bushie’s peeps what they wanted to hear.
During this time, Wendy and I read the news, listened to the experts and noted the facts. We concluded that not only were there no WMD in Iraq, we shouldn’t let beady-eyed Saddam, the leader of a country only slighter bigger than the state of California, with an army who rolled over and played dead within twelve minutes of our invasion in 1991, get our collective panties in such a bunch. Unfortunately, we did not have a direct line to the White House.
iCasualties.org now counts 4390 killed in Iraq and that’s just from the United States.
For all intents and purposes, I’m a suburban housewife and mother. Wendy is a partner in a law firm but does not specialize in real estate nor know any more about how the CIA operates than I do. We’re just a couple of chicks who form opinions based on common sense and instinct. I’m not even going to begin to tell you how well-schooled Alan Greenspan is. And he may have been a C student but George W. Bush graduated from Yale. They’re supposed to be smarter than we are. Time and time again, we think everyone in these positions of authority and power must surely know what they’re doing, or at least know more than we. Well, guess what? That’s not always true.
Wendy and I have decided to start our own firm. It’s name? Gut Check Consulting. Our slogan? “We have a feeling we know what’s going on.” Here are just a few things we’re knocking around that we discussed during Miles Five and Six:
Timothy Geithner is in over his head. Justin Beiber is actually 9 years old. Sandra Bullock and Elin Nordregen will not grow old with their current husbands. Twitter won’t be around in five years. Starbucks VIA instant coffee won’t be around in five months.
I could spend all afternoon on this, but we can’t keep giving it away for free.
I can type really fast and know how to use Excel. Can I work at your firm…please! So well said. Thanks!
Twitter is your only prediction I’m not confident in. Maybe, but narcissism is in endless supply. Twitter equals some kind of bizzare fame. Andy Warhol said in the future everyone would be famous for 15 minutes. I say everyone will be famous to 15 people …. twitter …. blogging … youtube … on and on.
Jo, can I get a job at your new firm? Its the most sensible business idea I’ve heard in many years!!!