Soaring to New Heights

It's a time of firsts and we have so many more to come. In a little less than a month we will be electing a new President and for the first time in eight years, one of them isn't the incumbant. It will be historic from the standpoint that regardless of who wins, history will be made. If the McCain-Palin ticket wins then for the first time in the history of the United States, a woman will occupy the Vice Presidency of the country. No less an achievement would be if the Obama-Biden ticket wins in which case an African-American would occupy the Presidency of the United States. Something that could have been considered inconceivable no more than 40 years ago. It would be great if this was the only set of 'firsts' that we'd have to look forward to but unfortunately it isn't. Not even close.

Back in 1989, just a few years shy of the IT boom and at the eve of the collapse of the Soviet Union, the late Manhattan real estate developer, Seymour Durst installed the 'National Debt Clock' in Times Square as a sort of visual reminder to the people of just how much the country owed in debts and what it worked out to (roughly) per family. At the time it was installed, the National Debt Clock had digits out to only the first trillion place. But the times they are a'changin' and now Durst's legacy, the Durst Organization has made a temporary (at least hopefully temporary) fix to the Clock by adding a permanent '1' to the front of the line of numbers in order to have sufficient numbers to show the actual number of the national debt. It would certainly be some time before we would have to consider changing the '1' to a '2' but still, with the uncertainty that has affected the world market, it isn't out of the realm of possibilty.

Indeed even after the bailout bill was passed in Congress, the affects to the domestic and world markets have been shakey at best. Although there hasn't been a run on the banks as there was during the Great Depression, there has been a declining confidence in the financial institutions around the world. I think no point illustrates just how much of a decline there is than in the recent announcement by Michigan Lottery officials that the winner of the $42 million jackpot (who is due to be publicly announced later today) will take the money in increments. This is unusual since most people choose to get a lump-sum payment (which is lesser than the total $42 million) and then invest it. But according to lottery officials, the winner has so little faith in the market that he doesn't want to risk putting his winnings in the bank only to see that bank or any other investment opportunity fail. Funny. Now even choosing a bank has become like the lottery.

That's not to say that everyone is losing out. Some people are getting in on their own homes or getting new property due to the rising numbers of foreclosures and declining housing costs. Living in Tysons Corner, I can see the results nearly every day when I look around the area and see the number of properties coming up and seeing just how many of them have gone from ownership properties to rentals. I guess the property owners realized that they are signing on for a losing proposition if they try to make home sales now. Flashback to about a year and a half to two years ago and recall the amount of new development that was going on all over the area and you'll realize that this wasn't as surprising an outcome as many people thought.

Sure banks were willing to give you a loan on a house despite the fact that it's about four times what you earn in a year but the assumption was that by cutting taxes, people would be more enthusiastic for purchasing property since they could now 'afford' it. I guess it was just too much for the banks to constantly take possession of houses that were well beyond the means of many people and then attempt to sell them at a loss to at least get them off their hands. It's hard when you have a boom in new home construction, it's even harder when you have to compete with these all over the place. I'm sure the housing market will stabilize eventually and once again home costs will rise but regardless of which party takes control of the White House, I hope they take charge of the problem and try to find a solution before we run off into yet another part of the world to help them find democracy. At present we're not doing a stellar job of defining it for the rest of the world. We may scare off more people than we attract.