Am I Stupid or What

   Posted by: chris   in Fish Talk

First on a sad note I have just realized that the speeding train to nowhere on which I appear to be a passenger and which I might add that I am anxious for to reach its destination is headed to a very unpleasant place.

Most if not all of my fellow passengers seem as anxious as me to get to where they are going, they look stressed, perplexed, angry and depressed at the delay and the apparent endlessness of the journey as the train jogs on and on and on.

The reason for my change of heart is that I have just had the realization that the last place I want to get to is the end, the thought of arrival is bad enough but those last few miles just may be arduous if not hazardous to any form of enjoyment or pleasure.

The reality of life in the journey analogy is that rather than a rush to a destination it should be perceived as a vacation that you never want to end rather than a means to an end that you just can’t wait to got done with.

Being a male who never came close to the borderline that defines average, which means that perhaps there is little difference between me and most other males I must say that the greatest pleasure I have had the good luck to behold is the feminine form. Nothing sordid, just the average woman, such a thing of beauty, yet we rush for trains and complain about the traffic and never ever behold the total and absolute unparalleled art forms that are our everyday existence.

How much I love children especially my granddaughter yet I was totally oblivious of my own four as they grew up and now that my kids have been replaced by four adults who have undertaken obsessive journeys of their own and appear to have taken on the “where am I and when will I get there” mantle that I so proudly wore for all those years of their childhood I am left to wonder how I was so stupid and why would such obviously intelligent people be lining up to follow in my stupid footsteps.

Did you know that someone wrote a book with one long sentence, I was trying to do that in the last paragraph.

Anyway, I sat down to write about the free market economy and I suppose that such an important subject deserves its own post but such is life in the fast lane and today being December 1, I need to get a sticker for my car so I write as my wife Anne jogs.

To the free market. Listen up I won’t be repeating this.

If there is an abundance of anything, coffee, potatoes, pork bellies, oil, the price goes down, if there is a shortage the price goes up.

This is how a market works, right.

There is however one exception-Housing.

Because houses are mostly bought using borrowed money when the economy falls and people are trying to unload their overpriced homes like hot potatoes creating a huge excess in inventory the price cannot fall below the mortgage amount, leaving them stuck holding hot potatoes.

This creates a dam type scenario in the supposedly free market and houses remain unsold.

Housing however is a prime driver of the economy and stagnation in the housing market causes other markets to stagnate, the economy slows people lose jobs and can no longer financially afford to serve the mortgage which caused them to be in the home in the first place and is holding them in it when prices start to drop.

And this my fellow travelers is the problem with the so called free market system that is the darling of capitalism.

If the commodity which underpins society and which is the greatest purchase in the life of most people and also their greatest investment vehicle is artificially restricted within the free market system by the imposition of a mortgage then the whole system is infected by a systematic seismic flaw.

When a system is designed to rise on shortage and fall on abundance and it works for everything except the one item everyone needs then the system is flawed if not broken.

Ireland despite the influx of 80 something billion from the EEC not to mention its friend England (who stole raped pillaged and plundered for 800 years) lies on the brink of economic oblivion because housing prices cannot correct because of the mortgage amounts attached to them.

If I decide I need to sell my record collection and list them on eBay then I have two choices, keep them or accept the best offer. With real estate you have two choices, keep it or sell it for the best offer that exceeds  the mortgage.

This is absolutely brilliant in a booming property market and everyone appears to be (a) a genius and (b) rich. However when property prices fall and housing prices are artificially held at inflated prices or put another way are not allowed to fall and correct to meet market demands everyone looks (a) stupid and is (b) broke.

The politicians in Ireland where always mostly stupid public house personalities, but to guarantee all bank assets goes beyond stupidity and borders on the realms of insanity.

What the good people of Ireland have in fact guaranteed is that no property shall be sold for less than the mortgage amount and if for some reason like foreclosure/repossession the selling price of a property is less than the mortgage amount then the state in the form of NAMA (national assets management agency) will step in and pay the lender the difference.

It might appear to the casual observer that Ireland’s problems are over now that our friends have come to our assistance but, and my dearest friends this is a very large but–there are a lot of houses in the motherland that need to be sold low whose path to market is being impeded by a very high mortgage.

A double dip is when you think that you have solved a problem only to find out that you where merely deluded. The economy is the economy stupid! It is perception that see what it wants and then dips when reality rains on the parade.

The problem for most of the world is that the system “capitalism” is flawed, the problem for Ireland is that its political leaders where stupid enough to guarantee all bank assets without limits.

NAMA may eventually do what England never could, bring Ireland to its knees.

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This entry was posted on Wednesday, December 1st, 2010 at 1:22 pm and is filed under Fish Talk. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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