Valuations. Can there be any doubt that in America, we have been living with false valuations?
Journalism was never supposed to be about dog and pony shows. Television had helped hijack truth that a daily newspaper was supposed to be after. At the time a president actually had press conferences, the event was televised. There once had been an age when the truth was highly valued.
What have we passed on the generation that was born in the 1980s? They actually were raised to believe that homes were worth what they sold for. And in the era that they grew up, they never batted an eye at Dow 10,000.
I remember coming home from a fishing trip on August 13, 1981. I had been away from civilization for the week. And when I heard the Dow closed at 798, I could not wait to make my first mutual fund purchase the following Monday.
I was fortunate for the times I was born into. I had grown up with parents of the Depression. Although I never heard a great deal of stories, a lifestyle was reflected in day to day living. I never expected my parents to give me a car to drive to school. Some things can only be absorbed.
At some point in time, I learned there was no such thing as magic. I appeciate that most of us live in an age of illuison, promoted by the media. It was why people bought People magazine. It was the era of the dog & pony show, climaxed every four years.
I spend a lot of time following the business news. It is funny the words that are used –valuations, redemptions, rescue. Rescue was synonymous with salvation. Most of us spent time on the unimportant. These times are teaching us what to really value.
These Septembers of this presidential administration are bookends that can never be forgot. Times of grave concern, not yet panic, are teaching moments, about true values. I am learning a lot about myself.
Paul Krugman is a professor of Economics and International Affairs at Princeton University and has written for the joined The New York Times since 1999 as a columnist. In August 2005, he wrote: “This is the way the bubble ends: not with a pop, but with a hiss. Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom goes bust.”
That column closed with, “Now we’re starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone – not just those who own Zoned Zone real estate – should be worried.”
http://www.nytimes.com/2005/08/08/opinion/08krugman.html
He also offered a well reasoned opinion piece on September 24, 2008 as to why to vote against the Paulson Plan.
History had come alive much more vividely with this crisis. The years of 1905 and 1916 in Russia. Fear and trembling did that. Emotions are being stirred and opinions are becoming more passionate.
What have we passed onto the generation that was born in the 1980s? The kids who were born in the suburbs, after America had become an urban society in the 20th Century. These suburban people seemed scared, as fearful as city people, as did the people on both sides of the aisle. There was fear now and division. The fear was real. What whites had of blacks following the riots of the 1960s. What blacks had of whites in the days of slavery. There had always been fear.
There was fear, but why was there anger? Was anger directed at the government over wealth and disbursement of wealth? People felt believed that self-worth was based on dollars? Public policy was based upon dollars or people? The anger was reflected in how representatives got along in state legislatures and the federal legislative bodies. Or did not get along. These states were not real united.
The younger generation actually had come to believe that homes were worth what they sold for. And once poor people also bought into the idea, using sub-prime mortgages, those financing vehicles that allowed at its end only payment of interest, not principal. And in the era that they grew up, the young, the new capitalists, never batted an eye at Dow 10,000.
How could valuations be false? I had always been taught you could not believe everything you read in the paper. I am not sure that caveat is ever made about television and all the commercials that are aired. And it seems that politicians are elected only by commercials these days, not on either ideas or ideals.
The lack of ideas seem to have shown up in the Paulson Plan. The House seemed to see its transparency. Our houses are not worth what we think. And nothing was going to prop up thses values. Not any new dog and pony show by any politician in the House or The Senate.
The Financial Sector is not worth what CNBC thinks. And like Rin Tin Tin, the movie star who paid a publicist, it was time to realize that he was not as great as the publicists had been telling everyone.
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