Each Sunday morning for the past seven years, I’ve hosted the “Ilyce Glink Show” on Newstalk 750 WSB/Atlanta.
Since the show’s inception, I’ve started each show discussing the economy. As we moved from boom to bust, my economic segments have focused on how today’s news affects investors and consumers.
The interesting thing about hosting a radio show is hearing what’s on my listener’s minds. They’re quick to call in and let me know whether they agree with what I’ve been saying or not. Their questions tell me what’s going on in their lives.
This week, I discussed how a new study is showing that homeowners who are underwater with their mortgages are defaulting at an even faster rate. I also regularly discuss the coming commercial real estate collapse, long-term unemployment and other news items.
So much of the economic news of the week (this week, it was the pending inability of countries like Greece,Spain, Portugal and others to pay back their debt, plus a “sneeze” from China) wreaks havoc in the stock markets – it’s tough to shrug it off and say, “Today’s news doesn’t matter.”
I think the economy and each week’s economic news matter quite a great deal – to consumers, to investors and to anyone else connected to business.
This week on the show, Wayne’s call struck me the most. Wayne is an attorney with decades of experience. Even two years ago, attorneys were doing well. Today, there’s no work, and Wayne is considering finding another line of work. He told me that the Atlanta Bar Association has a networking meeting each month for unemployed lawyers. The number of attorneys who attend each month is growing.
My husband, Sam, is a real estate attorney and he sees the same thing going on in Chicago. More attorneys are finding there is less to do. Many firms have “de-equitized” their partners, cut their salary and benefits, and fired hundreds of attorneys and support staff. When the $150,000 to $500,000 attorney jobs go away, that’s a lot of lost income not being pumped into the economy.
Wayne can’t quite believe that he is at this point in his career – and his life.
I could sense the anguish as he asked me the real question on his mind: “Ilyce, how close do you think we were to another Great Depression?”
My answer: “We were on a knife’s edge. And, we’re still very close.”
It’s clear to me that the chasm between Wall Street and Main Street in increasing and is unsustainable.
The good news? This could mean another “once-in-a-lifetime” opportunity for investors.
{ 4 comments… read them below or add one }
This blog is great. How did you come up witht he idea
Thanks for the compliment! We host several events every year on different investing topics, and the blog provides extra advice and information from our expert speakers. I hope you’ll join us in October in Atlanta for the How to Profit from Foreclosure and other Real Estate Investing seminar.
Hey, I searched for this blog on Bing and just wanted to say thanks for the excellent read. I would have to agree with it, thank you again!
The economic challenges of this time are unrepresented. There are firms like Lehman Bros and others that made it though the Great Depression of the 30’s that could not make it through 2008. Part of this is due to the fact that our fundamentals related to lending have changed over the years. Yet the fact is, the risk reward paradigm exist in the credit markets as well.
In other words, while we have a system based on credit, there is a greater risk is that credit may not be repaid. As opposed to other countries (many third world) in which you have to save for everything you buy.
Yet liquidity in the credit markets allows for more sales, more sales means more profit for small businesses, which leads to them becoming bigger businesses and more jobs.
However what do we do when the credit market seize up?
Is not some ’seizing’ good though? Was it not the credit markets being too loose that created this problem in the first place? Well there is enough blame to go around, as for now small business and housing needs to be front and center.
People loosing there homes further drives down valuations and dries up a primary source of capital for small businesses, which is equity in their homes.
In the mean time – lets all ‘watch our mouth’. Consumer confidence is a big reason our economy is dragging and the consumer listens to the media. The average person does not know what all this economic stuff means, but if you tell enough people the sky is red for long enough, whether its true or not, they will believe it.
For us we need people infusing capital back in the system which means people have to have hope in the future. If not it becomes a self fulfilling prophesy. For example, how many people bought homes because they thought values would always go up? They did it because they believed the hype, had hope in the future and our economy did great.
OK – I’ll get off my soap box. When your used to hosting a radio show – its easy to keep going. Ilyce – keep enlightening us and as you would say, what a great time to be an investor! Some people are going to come out of this well positioned to be very wealthy – will your listeners be!
If they listen to you they will be. I’ll be listening as well!