Home Life and The Economy: The Hidden Thread…

Good Afternoon Folks,

I was thinking about how life and the financial markets mimic each other.  You see, those who know my family, know we have a dog. (I think it’s a Pug or a Fug or maybe it’s a German Shepherd… I forgot.) Our five offspring love the aging pooch.

Recently, a sequence of events occurred involving our dog (I forgot its name… we’ve only had it for 5-6 years) that, strangely, caused me to ponder the similarity of these events and the events in the financial markets and our economy over the past 18 months.

This dog is OK as far as wrinkled, small dogs go.  “It’s” (frankly, don’t know if ‘its’ a male or female… I never really looked) nice enough, very lazy and besides the random “bark” for no reason whatsoever, out of nowhere, knows its place on top of the ledge of the couch in our family room, where it curls up as it alternates in and out of sleep, except for the 3-4 times it fully awakes daily to run its set routine…

First, it takes a 12-second walk and stretch, then a quick sprint outside to water a tree and squat followed by a fast check around the kitchen table floor (usually, after the humans have eaten a meal) for a hopeful discovery of scraps on the ground,  finally, finishing with a fast stop for one bite and one lick out of its own designated dog food and water bowls.

The entire cycle runs about 90 seconds and then it’s back up on the ledge for its journey in and out of the ether. At the end of the day, it becomes very tired and climbs into one of our kid’s beds for a nice deep 12-hour sleep only to awake the next morning and begin its relaxing day once again.

Not such a bad life… If you are a hound.

Now our ‘Fido’, although lazy and unmotivated, very much loved its routine, sort of like your typical unregulated and unstimulated economy. But change came blowing in the form of very cold weather over the last few weeks and after several years of unimpressive growth both emotionally and mentally from our family canine, the dog ‘randomly’ and without thought or even any instinctual yearnings, decided not to invest in taking that “quick trip” outdoors I mentioned above.

It happened about as fast as the housing crisis smacked us when the first Bear Stearns hedge funds collapsed in June of 2007.  Unfortunately, like most dogs, it’s not trained to go the bathroom anywhere except outside.  You may be seeing the problem unfolding here, hopefully, better than most of us saw the housing crisis, unfolding a couple of years back.

Luckily, Jenny and I have two bathrooms in our master bedroom.  It’s a virtual panacea of marital space that keeps everyone (that being me) happy.  Unfortunately, and this is where the story really comes together, this unregulated dog has taken to defecating on the floor near my toilet.

Not my wife’s toilet.  Mine.

And it got me thinking about the mortgage mess and how 10% of borrowers defaulting on their loans can literally turn nearly an entire market and even economy into a toxic mess, much the way a 12-pound dog can do the same thing to the air quality of an entire bedroom suite. Because my wife is clearly the President, COO, CEO, Chairman and VP of everything in our home (and my life), she introduced her own stimulus package to light the economy… or a candle in the case here. And she placed the lit candle on top of my toilet to counteract the negative forces affecting our quality of life.

Unfortunately, as any stimulus plan goes, without proper oversight, bad things happen.  Upon forgetting the stimulus was lit, the candle melted, dripped heavily down the toilet and started a fire of burning plastic.  Not exactly a better smell by the way, but I digress.

Luckily, the heat literally split the toilet top in half making such a loud crack that we jumped up from bed to investigate the consequences of my household president’s stimulus package.

“Shock and awe” only begin to describe it.  The stimulus was LITERALLY, burning the very last “pot I had to piss in” (keep in mind I am “a mortgage guy from Detroit“).

The blackened, molten plastic was dripping onto the tiled floor and a gaping crack in the ceramic now existed under the epicenter of the stimulus.  But, hey, luckily, a potential economic disaster was averted and the toxicity left by the dog could no longer be detected.  With a little bit of elbow grease and some more money to fix what the stimulus caused, I’ll be in good shape.

Thank you Jenny… ah hem… Obama!

Although – we do still have the dog and the country still has the housing crisis.

And now you know why I feel that everything is connected to everything else, and like my life at rare times, the economy, would be better off if it was just “flushed down the toilet” and allowed to begin anew… in a more, should I say, “natural” kind of way… an “economic enema,” if you will.

Dan G.