A crisis avoided?

Subprime home loan problems were back in the news recently. A couple of leveraged hedge funds that were heavily invested in subprime mortgage-backed bonds nearly folded when losses on those bonds erased most of the thin margin of equity in the funds. But, the funds ultimately were kept afloat . . . with more loans.

The original lenders to these funds strongly considered liquidating the funds – selling off the subprime mortgage-backed bonds and other assets, using the proceeds to pay off their loans, and then paying any remaining proceeds out to the funds’ investors. But, I suspect they soon realized that this might not raise enough to pay off the loans, much less return anything to investors. Putting a long list of low-quality bonds on the market would hammer the already suffering subprime mortgage-backed bond market as well as bring down the prices of other bonds, possibly starting a downward spiral throughout the investment markets.

So, they just lent the funds more money to keep them in business. For awhile at least.

This illustrates the type of concerns behind my statement of March 28, when Wall Street was saying we had seen the worst of the subprime crisis: “I believe it will have a broader and more negative impact on the economy than is currently reflected in the stock and bond markets.”

I still believe this. The growing impact may be confined to the areas of the financial markets tied most directly to housing. But, as more and more home mortgage loans reset to higher interest rates over the next twelve months, and the mandated higher lending standards prevent many marginal borrowers from refinancing, more and more mortgage-backed bonds will see declines in value, and more and more investors in those bonds will be looking to get out.

Crisis avoided? I’d say more like challenges deferred.

And, they’re off! Already.

We’re going to really be sick of the Presidential horse race well before it’s over. But, so far, I have to admit, it’s been somewhat amusing.

The Dems saw Clinton take the lead right out of the gate. But, then Obama moved up fast and, depending on the viewing angle, may have nosed ahead. But, Clinton then surged back into the lead, in spite of boos and catcalls from some in the far left end of the grandstand who were even louder than her usual right-side detractors.

Republicans have suffered even more bumping and grinding with Thompson and Guiliani now neck and neck up front while Romney and McCain are fighting it out side by side a few lengths back.

And, posturing to enter the race midway through is Bloomberg, who spent most of his life a distinctly blue shade, transformed himself to red a few years ago, and just this week shed all identifying colors.

(Go to http://www.rasmussenreports.com/public_content/politics for regular updates on the progress of each of the contenders.)

These recurring contests of strength, style and stamina have always caused concern if not consternation among those who follow the sport, especially those of us who see great significance in the outcome. After experiencing what the last two winners did, however, I’m not sure it’s worth the anguish. They did what Bloomberg has done, but covertly. They changed colors, or at least shades, as they served out their terms as champions.

I’m noticing one thing that’s different this time, though. Me. I’ll be retired for a good part of their term. My priorities are changing and I’ll be less able to change my lifestyle in response to new taxing and spending priorities. The wave of baby boomers on my heels will be having similar thoughts.

I wonder how this will change the political landscape. Will this largest of generations (so far) that benefited so much from the strong private sector they will soon be leaving now begin to look more to the public sector for its care and feeding, and vote accordingly? Or, will the typical age-related transition to more conservative views lead them to prefer even less government in their lives than they have had? Either way, most of us will root for whoever we see as most likely to provide the optimum social and financial environment nationwide, and geopolitical environment worldwide, that doesn’t leave us – the soon to be retired – any worse off.

But, who will do that? No way to know for sure. And, each of us wants something a little different. That’s what makes it a horse race.

Looking ahead

Awhile back, I wrote about my concerns regarding what I’ll do in retirement. I have lots of ideas, but that’s the essence of the problem. Which ones will I actually do? How will I choose? Should I focus on a few things or touch on many? No progress to report on this issue yet.

So, I’m thinking about another issue – aging. Or, maybe maturing is a better word. What’s that going to be like?

With both of my mid-80s parents in memory care assisted living, I’m not too optimistic about my later years. But, what about my 60s and 70s? Could they actually be “the best years of my life” as some have claimed?

Specifically, there are three aging/maturing-related things I found myself wondering about this past weekend.

1. Will the Sunday blahs ever stop?

Ever since grade school, Sundays have been downers. I can’t seem to shed the weight of Mondays and school/work. Even though I usually enjoyed both, I preferred days of freedom-to-choose-what-I-do. Except on Sundays. When I have more days off, will Sundays get better? And, will days off get worse?

2. Will I finally learn to recognize how complicated things are before I undertake them?

Whether it was at home or at work, with projects or relationships, I have always underestimated the complexity and the challenges involved. I usually see the desired destination in vivid detail, but the route from here to there is often nearly invisible to me . . . until I start the journey. Will more years and continued efforts to be more objective help me in this regard? And, if so, will I enter the fray more prepared, or will I simply undertake less?

3. When I look back even a few short years at some of the things I’ve said and done and not done, will I ever stop thinking how immature/naïve/short-sighted I was?

This is natural, I’m sure, and generally fully warranted through the teens, twenties, and maybe into the thirties. But, I didn’t expect it to continue full bore into the forties, the fifties, and now in the early 60s. Will I ever “get it right” the first time? Or, do I really want to? If I reach the point where my actions of the past few years look perfect, I guess I will have stopped growing, right?

So, I’m hoping to get over the first two, and I’ll try to learn to live with the third. But, I’m a little worried that some Sunday evening early in my retirement years, I’ll find myself feeling morose, realizing I’m only half way through what I thought was a simple weekend project, and thinking I would have done this much BETTER a few short years ago.