Where Do We Go From Here?
October 6th, 2008I will admit I didn’t follow our financial markets too closely until around June of 2007. Prior to that time, I would passively see how things were coming along, but being in New York, and having close ties to the credit markets, caused me to start obsessively reading about the markets every single day since. The biggest item I’ve learned is that
nobody really has a clue what tomorrow holds!
I’m been blessed to be in a great position, started a solid company, worked hard to build it up, and took some risk off the table by selling TLA in November of 2006, and received a substantial payout for it. However, today, the market is down almost 30% from its high in November of last year, so much for taking that risk off of the table. Its not about me though, my portfolio has plenty of time to recover. However, it is about my generation’s parents. My parents are closing in on the age of 60, not a great time for your retirement fund to lose 30% of its value. It is a major problem to all Americans, and certainly not just Wall Street.
Fear is spreading like wildfire across the markets, with unheard of sell-offs this past 30 days. I think to the normal American, there is more anger than fear, but the combination of those two can be lethal.
There is no doubt that the problems started with greed, but to me, the problem is, that is what capitalism was built upon. Greed is not necessarily a bad thing. When we were growing Text Link Ads, I was constantly working my tail off to increase our revenues. In all honesty, it wasn’t so we could make more money, it was the competition of it. I wanted to build the best, most successful company. That’s what this country was built upon, and why they call it the American Dream. What we are learning now, unfortunately, is that we need to have some form of regulation in place to protect us from that same greed.
The lending practice over the last 5-10 years is astinine, people buying homes that they could not even come close to affording. Lenders didn’t see this as a big risk, because home values were appreciating so quickly, that even if these people couldn’t afford their mortgage payments, they would be able to refinance and do it all over again. When the housing market began to deteriorate in 2005, that plan of lax lending practices wasn’t looking so good. It all started coming to a head about 15 months ago, and now for the last three weeks, we keep hearing the comparisons to The Great Depression. So where do we go from here, and how can we make sure that it doesn’t happen again?
1. The constant comparisons of “Wall St.” vs. “Main St.” are becoming tiresome, as we are all to blame. The average US salary is roughly $48,000. That same average US citizen has over $10,000 in credit card debt. The average downpayment on a home in 1989 was 20%. Today, less than 20
years later, the average is 9%. For first time home buyers, the
average downpayment is just over 2%. We have turned into a society that requires instant gratification, and we are too quick to make purchases that are not within our means. The same holds true to people not doing their homework before agreeing to these outrageous adjustable rate loans.
2. The banking industry looked at itself and thought, ‘How can we make more money…provide more loans’. Well in order to do so, they resorted to predatory tactics and attempted to confuse and manipulate a large part of the American public. Now banks are stuck with trillions of dollars of bad loans, and we are seing large banks fail due to it. People put so little money down on their homes that have decreased in value, that it actually might be their best option to just walk away, and that is just what people are doing.
It has gotten so bad that banks simply aren’t lending money to true eligible people and when credit markets aren’t flowing, all business will begin to suffer. It is quickly becoming a world wide crisis. I am hopeful that the $700B bailout package which the House passed October 3 will begin to help, but since its passing the markets have decreased by over 6%.
The simple fact of the matter is that this is going to be a long painful process. We need to flush out all of these bad loans and get the system back in order. Americans have always come together in tough times, and unfortunately, it appears that this one is going to be with us for awhile, so we all need to look in the mirror and do what we can to get our great country back on track!
of one of my baseball coaches at Wheeler High School, 
ensued in that week is indicative of two things:
I think the best solution for this would be to follow in the footsteps of say golf and tennis protegies. Some parents are spending well over $100K per year to send their kids to golf or tennis academies with the hopes of creating the next Tiger or Williams sisters. The kids spend day and night in gated areas perfecting their craft to maybe make it big some day.


We found a great loft apartment in Tribeca, which is in lower Manhattan, within walking distance to the MediaWhiz offices in the financial district. When we moved in it was very cold, and I figured I should be a true New Yorker and take the subway to work. I of course had no real idea what I was doing, but did a little research, and thought I had it figured out. I walked a few blocks, read some signs when down some stairs and was standing on the platform, waiting for what appeared to be the correct train going in the right direction. The doors open, people get out, the train was rather crowded, but there was a standing spot available, so I squeezed in. I looked up at the map, confirmed my guesses were correct, and I was on the right train. I then noticed a lot of people were huddled together, but nobody was really bumping into me. I didn’t pay much attention to it until a man in a suit said, ‘hey buddy’ to me and pointed down. On my inaugural subway ride I was standing in a nice puddle of vomit. Welcome to New York!
Our apartment was about five blocks north of the site, and we could see the cranes plain as day out of our bathroom windows. Many times, I wondered what it would have been like if we were there that horrible day that the world changed. Out of all of our experiences in NYC, the whole situation of the World Trade Center touched me more than anything else. To walk by there and see people protesting nearly every day, reminded me of the gift we have of free speech, regardless of what is being protested. There would also be family members placing flowers, and pictures and saying prayers while thousands of people were walking by to their trains, buses, jobs, etc. It is mind blowing that nearly 2,800 people lost their lives that day for no reason. New Yorkers are resilient, and they will never forget, but they know that the city must push on.
The idea of being outside with great scenery and playing against the course as always been fun for me. After playing competitive sports since the time I was four years old, then after graduating college and finishing up baseball, there a void for me that needed to be filled. Golf does the job getting the adrenaline flowing for me. There is nothing better as hitting a good drive or sinking a long putt. I love the idea of trying to improve on a sport that you can literally play your whole life. I shared many rounds with my old man, which are memories that are cherished forever, and I hope to share the same memories with my children. Charlie got his first set up clubs for Christmas last year, so he is getting ready. I also get a chance to play with my father-in-law anytime he is in town. He has struggled with the game over the last few years, but always goes out to play with me, which has meant a lot. This picture does a good job of summarizing his game.
I thought to myself that TNT might be better served showing commercials for their other shows, but I guess they felt that pounding this show into the heads of NBA viewers, was the best choice of that valuable air time. I can appreciate that to an extent, but what they did next, really blurred the lines of content and advertisements. During the Western Conference Finals, TNT decided to show the celebrities in the crowd at the Staples Center coming to watch the Lakers and Spurs. They show Jack Nicholson, David Beckham, Eva Longoria, then “Tyler Perry, from TNT’s Tyler Perry’s House of Pain”. I couldn’t help an out loud laugh when they did that. I’m sorry, but it was an egregious use of self promotion. I think Fox started this fake placement of their own network stars back at the World Series a few years back when the entire cast of “House” was scattered at different parts of the ball park so the cameras could pick up on them and plug the show.