Frenzy

Countrywide. Bear Stearns. IndyMac Bank (my previous employer). Fannie Mae. Freddy Mac. Merrill Lynch. Lehman Brothers. And other lesser known, sad things. All of them are either bankrupt or would have been if no one bailed them out.


Who's next? General Motors? Chrysler? Washington Mutual? AIG Sun America? Bank of America?!

We thought we, American financiers, mortgage bankers, real estate brokers, investment bankers, taxmen, accountants, lawyers, money managers, etc. were so smart to come up with our complex models: mortgage-backed securities, subprime, Alt-A, swap derivatives, ARMs, Option ARMs, Hybrid ARMs, auction rate securities and the rest of our finance mumbo jumboes. After all that, we must have drained our intelligence enough to forget that what goes up must come down, including real estate prices.

I have a rule of thumb: when the "authorities" and "experts" are starting to tell the public not to panic, it is most probably the right time to panic (or at least do something!). And they are exactly doing it now. The worst has yet to come. A lot more heads are going to roll.

Well, then, this is the perfect time for tea, isn't it? Or a tall glass of something hard. Either to obtain some calm or to keep the sanity in place, just for a liiittle bit longer.