The resilience of the American People, Housing and Housing Finance.
September 11, 2023
“Never let a good crisis go to waste” - Winston Churchill
September 11th, 2001. I will never forget it. The events of that morning, afternoon, days, and months to follow will always be a testament of American Greatness. As I reflect on each year since this terrible day for America, I see resilience. In people, in community, in Faith and in American business.
Our country, the United States of America, truly became united. The events of this day created much uncertainty for everyone. Fear is probably the accurate word to describe it. Fear of the unknown ahead. Fear of further attacks. Fear of our loved ones and livelihoods. There is a saying, "fear is a liar". The American people proved that fear is indeed a lie. Faith is the truth!
This was the first major "market" event of my early mortgage banking career which would rattle the economy. This was my first cycle in many to come throughout my next 22 years of mortgage banking. Cycles have come and gone since but one thing that has continued to amaze me is the resilience of our macro- economy. The housing and housing finance climate returned to normal, better than normal really as the Federal Reserve, led by Chairman Alan Greenspan, began lowering interest rates. Similar to how the Fed has handled other crisis control through monetary policy. But this initial cycle, set this strategy as a norm.
It wasn't long before the NASDAQ and the Dotcom era would explode due to this low cost of borrowing. And in-turn, would lead to our next crisis, the early technology bubble burst. This affected housing again, but for only so long. It took the Tech sector years to recover. It would take the NASDAQ Composite and QQQ almost nine years to return investors' money to whole. Meanwhile, housing and housing finance continued to thrive and in realty was in the beginning stages of a Generational Bull Market. Again, resilience as the fear of a consumer recession lingered. It was not the reality.
Over the course of these years (2001-2009) the housing and housing finance business was overwhelmingly the catalyst of the "great recovery". Until.... our next cycle which would transition the economy yet into another crisis. This time, it was directly housing and banking induced. This would be my third economic challenge, that directly threatened the American Economy and again, the uncertainty of many livelihoods. We all remember the pain, policy changes and regulatory restrictions that the housing finance industry faced. It wasn't an easy one. It was a grind for a solid three years to follow, the longest grind yet!
Fast forward to 2012. The economy had recovered after much destruction was left in our banking sector. Bears Stearns, Lehman Brothers, Countrywide, Wachovia Bank all insolvent, acquired or dissolved by this point, and the New Economy had once again recovered. I could have sworn that the mortgage banking Bull Market had ended. Not necessarily because of fear, but logic. It was a mess. Yet, Faith in the American Economy and American people, prevailed.
It was business as usual, and markets thrived for the next nine years. It was stable. Predictable. Protected by policies. And then we get the next cycle surprise.
Covid-19. Again, fear shook not just the United States of America, but the entire globe. This would be a global crisis. And it was in the matter of healthcare and wellness of people. Fear of the unknown. This triggered the greatest and most robust housing and housing finance cycle yet! Again, fueled by low interest rates and Fed accommodation to keep our USD currency circulating.
Now - today, the housing and housing finance industry faces a new challenge. A different challenge than before. And the uncertainty of what this current cycle will bring, will once again, cause fear. Remember, "fear is a liar".
Keep the Faith that this cycle will again result in something much greater, much stronger and much needed.
Finally, looking back and reflecting today, I remember the heroes of 911, the victims and families. I am also reminded that we are a resilient Nation. America will always be the Best country to live, work and play in.
One Nation, Under God.
God Bless. Never Forget!