Juggling Dynamite

Yesterday as Mother Nature was showing us all who’s boss and pounding Ontario with a mid-April snowstorm, I got to cleaning out the storage space under our stairs–as one does.  I came upon a bag of forgotten artifacts and papers.  Some of them were letters my mom had written hers in the ’70’s.  Others I had written my husband 30 years ago.  Some his sister had written to him when he was on a tour of duty in the Middle East in the 1980’s.  All so unexpected, I had no idea we had these things.

My mother suffered early onset dementia in her late 50’s, and for over a decade has had no language or recognition of anyone.   In many ways it’s as if the disease has erased her.  And I have struggled to remember what she was like.  So, imagine my delight when yesterday, under the stairs, I came upon a book she had put together for me in 1995 when she was 55 and just starting to sense what was coming for her.  No doubt it’s why she made me this book, although I had no idea at the time.   Inside she has written pages of detail about her parents and my childhood and fond memories she had of our life together.  It was as if the past came back from the dead, all in an instant.  Needless to say, quite an emotional find.  It’s amazing what we forget and then instantly recall, once presented with visual cues.

Something else I came upon, was a package I had put together before applying to law school, when plan A was to find an agent and become a professional actress and screenwriter. Believe it or not.

The head shots are pure ’80’s. Check the Farah Fawcett.

Life is funny.

Ralph Waldo Emerson wisely observed that “A man in debt is so far a slave.”   I have regularly pointed out that those reaching for dramatically over-valued assets using debt are risking financial suicide.  The two go hand in hand: for it is only with credit that prices can levitate so far beyond fair value, savings and income levels. When credit is maxed out, prices inevitably retreat and the tide of irrational exuberance turns to wipe out the highly levered.  But also, even those who were using cash savings and not leverage to buy, experience evaporating net worth as prices fall and contagion spreads.  This story reminds of the real life costs.  I’m afraid that Canadians have earned an extended period of painful revelation.  See Couple ordered to pay $470,000 after reneging on Stouffville home deal:

“David Lea and Yixing Hu submitted an offer of $2.25 million in April 2017 after being told there were multiple competing offers for the property, originally listed at $2 million, according to court documents. The bid was accepted, but not long after the market cooled and the Newmarket couple had second thoughts.

Feeling they’d overpaid for the property and having trouble making the down payment, the couple pulled their offer. In the summer of 2017, the market value of the home had dropped to about $1.8 million. The homeowners sued, and in a court decision this month, the judge ruled Lea and Hu had to pay the difference…

We’re probably going to have to rent somewhere. We’re trying to figure that out. I’m going to see what I can afford every month, and pack up the kids’ stuff,” Lea said, who is a father of four. “I have no choice. It’s the worst of the worst because you take the hit on their property and get these big damages, but at the same time (the value of) my house has dropped. I can barely sell it for $1 million.”

…Lea said the Stouffville property would have been the last home he and his wife bought — a place to retire in.  “I’m trying to be as positive as possible. This stuff can just destroy your health,” he said.

I have said many times since 2007, that the scale of the debt weight pressing down on the masses and the world economy suggests that knocking off zeros will be needed to get out from under.  That can only help however, if the debt and risk-magnifying machine of the financial sector is also deconstructed and re-directed in service of the broader economy, rather than allowing a few to continue enriching themselves with short-run profits at the expense of our longer run strength and stability.

Those who cry that this would involve government intervention in ‘free markets’ are missing or ignoring, that reckless financial firms have been backstopped, enabled and bailed out by governments for decades now.  Extreme corporate welfare has allowed them to become the menace that plagues us.  Time to restructure.  Keen offers some novel ideas on how in this segment.

We connected with economist Steve Keen who unlike most practitioners of the dismal science actually proposes solutions that might even work. As almost anyone will tell you, the world economic system is a mess. There’s way too much debt and not enough equity. Steve proposes paying everyone in the US a fixed amount of money. For those in debt, it would have to be used to pay it down. Those few among us who are solvent would use it to buy shares in companies who would be required to pay down their debt. It might not be practical but there’s a certain sense to it. And in any event, it sure beats QE.  Here is a direct audio link.