Business: Rebuilding after the Sub Prime Attack

When I was in the Corps I had a Gunnery Sgt. who always seemed to come around the corner when a few of us were goofing off together in conversation. The Gunney would bark: “Spread out and get busy. One grenade would get you all”

The grenade of sub prime mortgages seems to have gotten us all to one degree or another.

Those that had preparation that spread their assets out are in better shape than those that did not take the time to prepare some financial defenses. Whatever your situation it is clear that assets of every nature need to be assessed and structured for the rebuilding process that must now begin. This process must be an individual effort with personal responsibility for results at the core of the rebuilding plan.

The hit on the market has been more than a grenade. It is almost like a tactical nuclear attack. Even in the worst attack there are areas that survive and provide the starting point for a rebuilding project. This is the time to assess market strategy that has caused grief and start to rebuild with the knowledge gained from recent months. When assessing assets do not think that assets are only financial. Review your talent “storage box” and see what is there that you can use in the rebuilding effort. Organize a family team with a combination of talent brought to bear on your problem. Start the list making. What are the strengths of members of your team and how can they be combined to work through this moment of crises. Understand that the politicians will do what is politically expedient and any actions they take will primarily be designed for their reelection. Benefits for you are of secondary importance to them. We must recognize that the answers start with each of us as individuals

We all have an opportunity to move ahead with  more personal strength as a result of new experiences. Even Federal Reserve Chairman Ben Bernanke has seemed to learn something seemingly missed in the Ivy atmosphere from which he emerged. He in a speech the other day said that we had to get the housing market moving again. Brilliant Ben, but really not news.

Every recession in the last 50 years has had housing at its heart. The home builders of America employ more people than any other industry. Most of the home building is done by relatively small or moderate sized companies with a regional focus. There are several national home building companies , but none with the size and clout of the auto industry and their unions.

The Bail Out focus has been on the financial institutions, insurance and the American auto industry. A friend said to me recently that we need to recognize the small contribution the financial institutions that are in trouble make to the progress and welfare of the U.S.  For the most part they have a cadre of people in $1500 suits sitting at expensive desks with a Bloomberg Terminal to stare at. They work very hard to figure out how to leverage every possible moment at that desk to their personal advantage. Unlike the builders, farmers and engineers they don’t drive a nail, lay asphalt for a road, sink a caisson for a bridge, fight the elements to raise the crops the world needs or actually build anything. They handle the money create, hedge funds , create derivatives, sub prime mortgage schemes and use the efforts of the real producers of goods and services to make themselves enormous sums of money on the efforts of the producers.

I never had a deal that Wall Street liked. They were never big enough, didn’t have enough legs and would take too long to get into profits.

I was always received with courtesy in a few of those institutions that are recently no longer in business. They treated me well just in case I sometimes would come up with an idea that would produce unconscionable profit margins. I often got advice as to where to look for help but was always moved to the door quickly so they could get back to working on quicker, easier ways to make a lot of money.

Making money was not enough. It had to be a lot of money. They finally figured how to make a lot of money with housing. Sub Prime mortgages. What geniuses. They made big money for a time and put their companies into distress and the nation into a recession.

The lines at the door of the Treasury by businesses seeking government help is almost as long as the growing lines at the unemployment offices. The Secretary of the Treasury is handing fistfuls of dollars to the failed companies and managements that are examples of everything wrong in running a business. Think about who is taking the hit. The builders, farmers, entrepreneurs and the hard working American work force are feeling the hit of the financial grenade that has been dropped in our midst.

Politicians providing an answer, “forget about it” but take careful notes for future reference and let’s start to think about getting a few elected officials that really care about those folks who are facing foreclosure. Note that billions have gone to Wall Street, AIG and now the Auto industry. Where is the help for the folks that supposedly were to get assistance from the first 750 Billion dollars. I haven’t seen where that plan is being worked in Congress.

Watch the people who produce actual products, catch their breath, suck it up and get rolling again. There are a raft of Americans who are ready to hit the beach of commerce running once we get through the current rough water. It may be rough for a time but we will get to that beach.