At least on paper all the profits and all the work of the last two decades has disappeared. The tangible assets are still there, but they’re essentially worthless because they can’t be sold and turned into anything else. I live in aq place essentially untouched by the events of the last twelve months. My state has been rolling in money and spending it liberally. Tourism was good, though it was a lot more foreigners than ever before. I felt the oil/gas price spike but only at the margins; it didn’t effect my driving at all but it, in combination with a cold, wet summer really effected my use of my boat – at a gallon to the mile you really have to want to go.
My wife and I had good jobs and now have a good retirement plus I still earn a good bit of money as a consultant. We didn’t do ALL the stupid things that so many Americans have done; the house is small, the cars are nice, but not extravagant and are paid for, the boat and wine are about the only vices we have. The house should be paid for but we re-fi’d it to get kids through college and do some “bucket list” things because they were giving money away, but we never took anything like a preponderance of the equity out of it. So, we’re OK so long as things don’t get so catastrophically bad that the State drastically changes or reneges on our retirement. It could happen, but I must presume that things would be so bad by then that the faith and credit of the State of Alaska would be among my lesser worries.
All that said, fear and fear alone has driven down the housing market here so much that in appraisal terms I have almost no equity. If I had to get out of it, credit is so hard to get that I’m not sure I could find a buyer at any price. My boat is essentially worthless for the same reason; the only way I could sell it would be if I found someone who wanted it and who had some acceptable amount of cash in small used bills. My property in the Lower 48 has no liabilities other than taxes and maintenance, but my tenants are complaining that business is so bad that they are having trouble with the rent.
The Left began talking down the economy the minute GWB was first sworn in and it finally worked for them and got someone elected who would NEVER have won in anything resembling a good economy. Until a couple of months ago, there was no objective evidence that the fundamental economy in this Country was in difficulty. Foreclosures were rising a bit, but anyone with a brain could see that some of “free” loans to unqualified people were going to fail. And then, the whole Damned economy collapsed!
No one will convince me that much of what we’ve seen in the last few months wasn’t market manipulation for political purposes. Was that willful manipulation enought to cause all this? I don’t know, but I do know that there are powerful interests who have the money and power to act as the fulcrum on which the economy might be tilted. People here poo-pooed the notion that much of the oil price spike was speculation, but it is now clear that it was or the speculative bubble would not have burst so quickly. Even throwing the North Slope and the North Sea on the market in the 70s and early 80s took the better part of five years to break the OPEC price; there’s been nothing like that kind of change in either supply or demand, though I suspect some spigots were twisted open in an attempt to influence the election. It was just too convenient that when “Drill Now” put McCain ahead, the price collapsed and gas prices were no longer an issue.
I don’t know which is scarier, that our economy could be brought to its knees by political manipulation or that the people running the banks, the brokerages, the funds, and the government are so out of touch and incompetent that they just let this happen. The money power players in this Country aren’t a bunch of uncaring fat cat robber barons who smoke cigars and sip brandy in their wood paneled club rooms. Some are really rich, and some have old money, but they are in the main managers and bureaucrats and graduates of America and the World’s finest biz schools. If this class of people made this happen for political or personal advantage, they are evil. If they let it happen and were caught unawares, they are criminally incompetent and that says something really, really bad about the institutions that produced them, hired them, and promoted them.
Anyway, I remember the old trunk in my grandmother’s room when I was a kid in Georgia. Under a false bottom in that trunk were my gg/grandfather’s letters from Virginia and the letter from his Captain informing my gg/grandmother that she was a widow, a Testament and a bedroll, and a whole lot of Confederate currency and bonds. I kinda wish I still had all that Confederate paper. If I could find the right wealthy collector, it would probably be the most valuable asset I had.