$700 billion and happy days are here
By: Karen J. Allen
Co-Publisher, On the Gay
Remember the 70's sitcom,
Laverne and Shirley? It wasn't my favorite show, but I
always wanted to live in that world. A neighborhood where you
knew everybody and it was safe to walk (or skip) down the
street, the greatest worry being trying to avoid Lenny and
But happy days these are not.
It's often not safe to walk down the
And the eruptions in our
financial sectors have been likened to the plot of a Stephen
King novel. That's not happy. That's
I never read Stephen King
because he scares me --or so I thought. It seems Wall
Street has redefined fear for me. Since digging into the
Wall Street mess and its ramifications, I'm really
A couple of insightful clichés
spring to mind: our financial system is less stable than
a house of cards --- or, maybe even more fitting: the
emperor truly has no clothes. In fact, where I grew up, they
would have said he's "neked as a jay bird."
I think we all understood that
the housing market was a time bomb waiting to blow. We
don't all need a PhD to know someone would pay a price for
selling those too expensive homes to those folks who couldn't
But greed and arrogance can
create a special kind of blindness. I think we made the same
mistake when we called the Titanic unsinkable. And our
home mortgage insanity is just the tip of this
Financial Mass Destruction
While busily creating
derivatives like CDS's (Credit Default Swaps), MBS's (Mortgage
Backed Securities) and CDO's (Collateralized Debt Obligations),
the wizards of Wall Street built computer models that hardly
anyone really understood, and used them to bundle all of the
risky mortgages to use as collateral on other risky deals. Back
in 2003, Warren Buffet called these practices, "weapons of
financial mass destruction."
At the heart of all of this
was a reluctance to reserve....capital. The banks and
Wall Street were allowed to value these securities based on
what they might be worth in the future and they were not bound
to keep a reasonable amount of reserves. As home prices
fall and foreclosures rise, the value of these securities
craters. Today, there is almost no market for them at
According to William Isaac, a
former chairman of the FDIC, "The SEC has destroyed about $500
billion of capital by their continued insistence that
mortgage-backed securities be valued at market value when there
is no market." I love that quote --- doesn't make
any sense --- but it just seems to sum up the whole sordid
Now, Treasury Secretary Henry
Paulson, former CEO of Goldman Sachs --- one of the most
prominent investments banks responsible for this mess --- has
been given the keys to the vault. By who? Our
Congress. Does that make you feel as good as it makes me
Who Knew We Had
an Extra $700 Billion?
$700 billion is a lot to
contemplate --- especially since it's our money --- yours and
mine. I didn't even know we had that much to loan. Oh, that's
right, we don't. We're borrowing it from China --- or are we
just putting on another shift at the mints? Either way, it's
not a sign of happy days ahead.
And I almost hate to mention
this, but if you've looked closely at that bailout bill ---
it's a 451 page thriller --- Section 115 says that $700 billion
is all that Paulson can request at one time. Is it
just me, or does that remind you of Iraq?
If the bailout goes as
promised, it will ease the credit freeze and keep more banks
from going under. But it's unlikely that it will prevent middle
Americans from continuing to lose their jobs and homes. 159,000
jobs were lost in September, the biggest monthly drop in five
years. Of the 9.5 million Americans now out of work, two
million have been jobless for more than six months and millions
more are able to only find part-time work.
Not Even Stephen
King Could Write This Stuff!
Add to all of that, the fact
that retirement savings are worth far less than before, and it
brings us full circle to Stephen King scary.
So, what do we do?
Not make a neat pile of our
insurance policies and mortgage papers and shoot ourselves like
that 90-year-old woman in Akron did last week while the sheriff
was knocking on the door to evict her.
No, it's not that hopeless.
But it is time to pay attention. If something sounds too good
to be true, you know what? It is. If you believe in things like
job security or fool-proof investments or the government taking
care of you, then you might need a reality check. A
for the Next Step
I believe our community is at
an advantage here. We've always known that we had to take care
of ourselves and we learned during the early years of AIDS what
we could accomplish when we worked together.
Opening a dialog about how we
can build a safety net for GLBT seniors is something I would
like to explore in the near future. I would love to hear from
anyone with thoughts on this subject. Please email me at
[Ed. Note: If you are
interested in a way to look out for your own financial
well-being and to supplement your current income or to continue
earning after you retire, check out The
Internet Marketing Retirement Plan]
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Palin Reminded Me
Co-Publisher, On the Gay
The Palin debate performance
reminded me that we need to respect our limitations.
If we are trying to do something new --- a new exercise, a
new yoga position, a new diet --- a new job --- we need to
remember to respect our bodies' and our minds' limits.
Just as Sarah Palin has stuffed her head full of party-lines
and consequently cannot really think about anything for
herself, so may we have stuffed ourselves with our latest,
greatest plan to get healthy, to return to some vision we once
had of ourselves.
For example, if we decide to go running and begin with a
three-mile run, our bodies will not be able to digest that
challenge. Or if we tried to hold a yoga pose much longer
or deeper than ever before, we may strain a muscle. We
would be disrespecting our current limitations. We would
But if we gradually, little by little, increase our distance
or our stretch every day, we would be able to run three miles
or stay in plank longer in just a few short weeks --- and we
would not be injured by it and have to stop.
Palin's injury came from her glut of undigested
information. Rather than be thoughtful last week, she was
just full. Her entire performance consisted of spilling
her party's message, not actually answering questions.
Our injury, too, would come from not being aligned with our
abilities. This is something we cannot afford.
When we align ourselves with our task, when we are clear
about our limitations, when we see where to make gradual
improvements, our success happens.
Thanks, Sarah, for the reminder.
[Editor's Note: Ann-Marie Giglio, besides being
a professional writer and the co-publisher of
On the Gay Horizon, is the
owner of a fitness studio focused on improving quality of
life through the mind/body connection. She is a certified
ChiRunning and ChiWalking instructor, AFAA certified
Personal Trainer and Group Fitness instructor and SCW
certified Pilates reformer instructor. She is currently
working on a new book for GLBT baby boomers ---
Lighten Up! How to Exercise Safely and
Effectively After 50 ]
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You've been listening to us for several weeks
now --- and, we're just getting started. There's a lot we want
to talk about, but, mostly, we want to discuss what
matters to you. So, come on over
to the On the Gay
Tell us what you think --- tell us what you worry about ---
tell us what information you're looking
And, if you hurry, you'll get a sneak peak of
what's in store for my neighbors, bright and early tomorrow
On the Gay Horizon