Just Do The Right Thing!
(A friend of Out of Bounds, Ralph Smedley, asked that his story be told, as he wanted to share with the readers the pain he has experienced from being sequestered. Also, he says he can feel President Obama’s pain. He begins……)
I’ll never forget the date – March 1, 2009, when she finally did it to me: MY WIFE SEQUESTERED ME! After years of repeated warnings and threats, and facing no other choice, she pulled my financial plug. She popped my profligate cork.
From that dreadful, but inevitable day onward, I have had zero access to our checkbook. All my credit cards were long ago fed into an industrial shredder. My jar of coins vanished, nothing left but glass shards. Since Mar. 1, 2009, I have had to live according to the dictates of an austerity budget that only a down-and-out guy might make it on. I have absolutely no say-so in what my matriarch ladles out to me. The only money I get now is what you-know-who gives me as an allowance. I have been reduced to chump change! I can’t even afford to buy shotgun shells to kill myself with. Gone are the days of my free spending, where I bought anything my greedy heart set its sight on. A distant memory.
When I retired in 1999 I had an annual income of $50,000 and NO DEBTS. Edna and I had a very comfortable but modest sized house overlooking Monterey Bay, near Big Sur, California. I bought the place in 1987 for $250,000 and I had it paid off a year before I retired. Real estate taxes were held in check by Prop 23, so we could afford our 5 star location. We had two cars, a ‘95 Taurus and a ‘92 Plymouth. Money-wise, I had always played it closed to the vest, paying off my credit card balances in full every month. I kept my savings of about $45,000 in a money market fund which yielded around 6%. I did not chase after the “Dot Com” Boom and avoided Enron, WorldCom and other “sure” things hot to trot in the early 2000′s. You ask how did me, conservative Ralph Smedley, end up TAPPED OUT AND SEQUESTERED IN 2009?
What did me in was the WORLD WIDE REAL ESTATE BUBBLE that caught my attention in the Spring of 2004. It was as if Dr. Frankenstein had thrown a switch waking me up to realize the value of my Monterey home had skyrocketed to levels that made me a multimillionaire! The tsunami of escalating real estate prices picked me up like a Styrofoam cup floating on the sea and proceeded to transport me to heights and depths found only in “The Lord of the Rings.”
Our California bungalow was now appraised at the end of 2004 at $2,500,000 as a “tear-down” no less! I could not stand having all that money just sitting there. All this “wealth” was burning a hole in my soul: I just had to get my grubby little hands on it, being careful of course, to thank God for His little Godsend. The GREAT RELEASE came in January of 2005, when I refinanced the place and sucked out $2,400,000.
Right here I have to stop and list all the wonderful people who made me a millionaire AND gave me a boatload of cash to enjoy: (This is a long list and there is no particular order to it as they ALL played vital parts:
1. Congress for passing legislation greasing the way for every Tom, Dick, and Henrietta to buy houses with little or no money down, with no proof of income to support the loans, and interest only mortgages. Is it any wonder that with this unlimited demand for houses and a 100 year flood of cheap money that prices jumped moonward! Thank you, Senator.
2. The Federal Reserve and Alan Greenspend (appropriate name, heh?) who supplied the Wall Street Banks with cheap money;
3. The Securities Exchange Commission for overlooking the creation of financial instruments that were 99% air;
4. The major Wall Street Investment firms that created these “securities” out of sub-marginal mortgages by slicing and dicing them into bundles with names like Collateralized Mortgage Obligations (CMO) and then selling these around the world;
5. COUNTRYWIDE Mortgage and other similar outfits that actually created the questionable low grade mortgages. They even concocted one for “homeless illegals with a $500,000 cap”. They then sold these beauties to the Wall Street guys for further processing;
6. The Rating Agencies such as Standard and Poor, Moody’s, and Fitch who approved of the contaminated packages known as CMOs giving this junk AAA rating, the same rating the best risks get, like Uncle Sam (so far). Are you kidding!
7. The World Wide Investment Community chasing after elusive higher yielding paper, were the ones who actually ended up furnishing the money for the bogus CMOs.
AND finally, ME, Ralph, for having the vision and the gumption to cash in on the whole unbelievable bonanza.
NEXT WEEK: Ralph’s story continues, FROM THE PENTHOUSE TO THE OUTHOUSE!