"Nobody saw this coming."

I am getting sick of hearing that line from the powers that be with regards to this current economic mess. The most recent was from Dick "The Dick" Cheney just yesterday. Fact is, a lot of people saw it coming, mostly because in a boom/bust economic model such as the US, this kind of thing happens quite frequently, even the really bad occasions such as this. Many people alive today lived through The Great Depression, and that was much worse than what we face today (so far). Yes, I understand that a complete global recession is a relatively new concept, but consider the level of globalization that has occured over the past 20 years. The world economy is inextricably linked, so when one major power stumbles, the rest are heavily effected. It is almost like the opposite of terrorist organizations. Gee, imagine that.

Now, rather than setting off the Indepent Thought Alarm carrying on with that lead, I'm going to discuss the signs that I saw over the years leading up to this garbage. I'm not about to lay out some plan that shows exactly how I predicted this whole mess, and accordingly why I should be given a lot of money to make future predictions about the economy, weather, relationships, or lottery numbers, because no. I didn't see this coming. At least not entirely. I'm just some dude with very little training with things finance, other than being raised by frugal parents who taught me a simple lesson in money matters: Don't Be Stupid. Other than a few foolish years of college debt, it worked. But other than that, outside of a 3-week summer school class I took in 1996, I didn't start paying close attention to economic matters until early 2007, but even then, my ignorant arse knew something smelt foul within the housing game, a few years prior to the reeking.

I started working in construction in 1999 with a part-time college job for a masonry subcontractor that dealt mostly with residential housing. I didn't know a god damn thing about housing at the time, other than a slight distaste for things tract, what with the mass produced repetitiveness of it all, but even then really, it didn't much concern me. I was glad to get out of K-Mart and have my weekends free from work. I finished my degree at the end of 2001 and, rather than look for another job, perhaps one that suited my interests a bit more swimmingly, I just started showing up every day. Part of it was the ease of transition, but most of it was because since I find any sort of work to be a gross waste of time, doing anything at all that brings me minimal interference with my daily existence is considered a fine career. This job was relatively easy, especially since I had already had nearly two years experience in it, and the benefits of a decent salary plus nights and weekends off went along with my Life Goal at the time: getting fuckin' hammered as often as possible.

So, after several years of living the dream, especially since my income continued upward enabling me to afford bigger and better bottles of finely crafted ale and aged single malt scotch, I decided to be A Big Boy and look for a house in 2005. Did I have a family? No. Did I need anything larger than my single bedroom apartment, even with all my CDs and music equipment? No. Could I afford merely the monthly rent along with the car payments I signed up for a year prior without digging myself slowly but gradually into more debt? No. So off I went house hunting! I decided on an arbitrary cap of $250,000 but allowed a little room on top of that apparently, and was looking at anything below $350,000. Please note that this gave me a range of 5 to 7 times my annual income at the time, which is far beyond the 3.5 maximum one should follow when house hunting. Nobody told me about this, I had to find out on my own, years later at that. So. I'm already getting myself way over my head just by looking, and this was before even stepping foot into the loan office. The best part is the fact that these $250,000 to $350,000 homes landed myself, along with my realtor type friend, in some of the shittiest areas around town. These prices were the bottom of the scale at the time, and while one or two looked nice, even during daylight hours I wasn't entirely comfortable being within most of their respective vicinities.

That afternoon I ascended myself into the loan officer's abode to discuss affordability of the two houses I found acceptable from our list of many. One listed for $292,000 and the other for $325,000. The monthly mortgage for either was a bit over $1,800 per month, before taxes and upkeep of course. This was over double what my apartment rent was, which was already difficult enough to surmount by myself. Now, I've always been pretty good at math, but apparently I never really put two and two together that borrowing 1/3 of a million dollars would translate to blowing almost $2,000 per month. Every month. For 30 years. It was then I truly realized that I could not afford this, and told them as such. "You'll be okay, you can do it." No really, I argued, I can't afford that. I pay $865 in rent each month, asking me to come up with another grand on top of that, every single month, is an impossibility. The money simply isn't there. "You'll be okay, you can do it." If I remember correctly, I had never even given anyone my salary information, let alone proof of it. I quickly wondered how anyone could be buying houses if this is how much the bottom of the market cost, and I knew that I was not exactly on the lowest salary rung, at least for my age. This is when the discussion of those mystical ARM loans came up, and how easy financing anything you wanted truly was, because since house prices keep going up, the everlasting game of leapfrog will never end. This is when I truly realized just how fucked the entire game was. My first mass economics lesson in 9 years, the first of my tried-as-an-adult station in life. A big one. Shortly afterwards I left their office, absolutely floored that this was how things worked, and kept my apartment, waiting for the crash.

It came, less than a year later, early in 2006. A date of retrospect of course, as at the time things were flying right along as if nothing had changed, although I knew things were rotten by that time because of the ARM fiasco, but nearly as important was the fact that, after working 6 years in residential housing, we were not getting any new plans in. For years, absolutely years, my company at the time received new sets of plans by the bushel on a constant basis. Anywhere from 5 to 20 rolls of architectural plans were flying toward my person every week, with very few dips along the way. That ceased to exist suddenly, although nobody noticed until a few of us realized that, for the first time ever, we were actually caught up with new projects. That had never happened before, in fact the very reason I was hired on to begin with was to help go through the back catalogue, which was massive, and it was never eliminated for longer than a day or two at best. Of course, I didn't realize how much of a mess this would create for the overall economy, but I did know things were about to get pretty nasty in more than a few areas.

It really was not hard to see coming, even with the blazingly ignorant attitudes of the higher ups that I witnessed. Nobody thought anything was wrong, in fact most were too busy swapping their own houses to pay attention to the basic lesson that my foolish self learned quite quickly just by thinking about it for 5 seconds after my first, and only, loan officer visitation. At the very peak of the bubble, the company I worked for were bought out by one of those lovely Private Equity Fund group of assholes, and believe you me, they are assholes. Actually, for any that happen to read this that are involved with one such PEF, I have a simple message: FUCK YOU. If you don't understand my hostility, let me explain it to you in further detail: FUCK. YOU. Anyhow. They were predicting this housing trend to continue for years upon years, which was obviously false to me, and really should have been to more than a few others, especially to anyone with any sense of history or training. Apparently, I was wrong. About others. Not about the mess. Case in point, here we are, 3 years later, with no end in sight.

Now. This is merely my own self realizing that something was rotten with the monied world through very few keen observations. Looking back after the fact, I've read countless reports from The Great Depression itself of nearly exact behaviours that happened in Florida during the 1920s that lead up to their mess. This link will take you to an article written by Eliot Spitzer, before he was shamed out of existence, that proves this was not hard to predict. Many did. All were ignored. Here we are.