Wednesday, February 15, 2006

The low interest trap

Farewell, Mr. G! Bon Voyage and adieu Seniore Greenspan! Thank you for this 19 years of prosperity... but prosperity?

A few days ago, I visited with a dear friend who lives in Dania beach. Paul, whom I have known for just over a decade was hosting a gathering celebrating his daughter's birthday. Later that night, I was introduced to mademoiselle Volimay who had just moved to the neighborhood. Between glasses of red and white wine I learned that her new 1 bedroom apartment went for a little over a quarter of a mill. To be precise, 276k. Although, nothing outrageous these days I was somewhat surprised that a building I am familiar with and that has no special attributes would be valued that high.

More wine and more fingerfood and about an hour into the conversation I also learned that she got mortgaged in approximately 250k with an already sky-high personal debt of 35k. In other words, Ms. Volimay was now the proud owner of a tiny space where to house her fabuluous butt (yes, she looked good) and a colossal IOU. When the party was over (not the Greenspanky party), I noticed madame "black hole" leaving on a brand new sedan. Make it a colossal, unpayable debt.

Her story is nothing but the story of hundreds of thousands if not millions of americans who are only one paycheck away from bankruptcy. How we got to this point I don't know but I do know that something does not add up. Every day, I see this kind of waste in orders of magnitud. Have we lost our minds? Are we a nation without a tradition which relies on misplaced values that only further consumption? Are we caught in a gigantic conspiracy created by the rich for the rich?

You got it. I have no clue, neither my answers matter.

I will never know what are we all about. But when I cannot see the beaches or the blue ocean while walking on north-beach streets because they have been walled behind spectacular high rises that go for 1.5 million a bedroom and when I see the owners struggling for a little bit of sun (on the sand) at their ocean front properties after 2 pm -the high rises block all sun at the beaches soon after midday-, I know we have gone too far.

Next time will try to cheer you up :)