#02 - Personal - What makes you believe you can’t lose?

Do the “words” of a person prevent you from loss?
If a stranger says “you can’t lose on this deal”, do you accept his say-so?
If a stranger says “this house will increase in value 10% to 15% per year, do you take this as a fact?

What makes you believe you can’t lose?

You must have signed a “loan document” that says you will pay back the loan amount you borrowed for the house or car or furniture, or etc. along with the interest on the money you borrowed. This “loan document” also describes the collateral for the loan (i.e. the house, address etc., the type of car, its year, its VIN number, etc.) and the fact that you are willing to give up the ownership of the collateral if you don’t pay back the loan plus interest. Some document that you already signed is significant that a loan was granted.

Seeing this as a growing business, some groups of entrepreneurs joined the “business” of “loaning money”. They took these loans and made them into securities and resold them to another financial institution . (the so-called Mortgage Backed Securities) They were sold and re-sold. After all, you could buy a “collateralized loan”, at an interest rate, without the expense of grouping these loans.

You could do this until after you figured it out, that a portion of these loans would go bad, and , depending on your judgment; all you need to do was have enough money in reserve for those few loans. Since the market was supposedly “going up” what was there to lose?

But the market didn’t keep “going up” and more than a few loans became abandoned. Soon, there wasn’t enough money in reserve to pay for the “abandon loans”. So, some banks were unable to pay back. They went broke. Then some people couldn’t pay back their loans. They went broke. So, the people next store didn’t want to live in a neighborhood filled with boarded up houses, unkempt lawns, etc. so they put their house up for sale. But, nobody else wanted to live in such a run down neighborhood so they couldn’t sell at any price. So, they went broke. The restaurants and bars and stores, who had all these regular customers, no longer could depend on these customers coming in; so they closed up shop and went broke. Employment went down in these neighborhoods. So. With less consumers, they went broke.

What makes you believe you can’t lose?

That is the situation we’re in now. What is the way a lawyer, a bank teller, a butcher, a baker, etc. can be made to work on a bridge? Suppose the existing laws are such that the highest wages in the section of the country, the prevailing union wages, must be paid on all government projects; who is going to afford $40.00 per hour for a signal men to say “stop and go” for a highway construction. Who can afford this?

Will a bank teller take this kind of work?
What or how will money create 3 million jobs…. Is this possible?
But we were promised!.... Did we listen to just the words?

What else do we do?.... “But my team” will find the way! …. Have we created a monster?

Can America survive? …..We can and we must!