Despite crisis, we will survive
Ray Allegrezza, Editor in Chief -- Furniture Today, October 6, 2008
Considering how quickly things are changing on the economic front, it wouldn't surprise me if an amended version of the bailout bill is passed by the time you read this.
After all, in a matter of days we went from hearing about how sound the economy was, to listening to the crash of the Dow Jones Industrial Average as it plunged a whopping 777 points after the House failed to pass the initial bailout package.
But since we're all friends here, let me ask: Was anybody really surprised by this latest meltdown?
For the past few years, I've heard more than one economist warn that with our loose-as-a-goose lending practices we were not only playing with fire, but were also running a real risk of having that house of cards go up in flames. But there was money to be made — lots of it. Financiers only cared about flames when they lit $50 bills to light their expensive cigars.
I knew our collective goose was cooked the day I heard a large mortgage lender brag about freely giving out Ninja loans. In case you missed that one, a Ninja loan is given to a prospective home buyer with virtually no income, no job and no assets.
I guess the Ninja loan was the icing on the creative financing cake. Well, a slice of cake can be a good thing. Eating too much of it can make you sick. We ate too much, it made us sick and maybe that's just what we needed to convince us we were out of control.
I'm not perceptive enough to know if the bailout bill will be adopted, whether $700 billion is enough to fix what's broken, or if there is a better solution.
What I do know is that even in good times, home furnishings purchases often end up at the bottom of the consumer's list. I also know that the economy is not likely to turn around anytime soon.
But I also know something else: Over the past few years, we've headed to furniture markets directly on the heels of anemic retail sales, wars, terrorist attacks, hurricanes, bankruptcies, gas shortages and massive price hikes of raw materials.
And despite those obstacles, we survived. We took many of the good tools that markets provide: great designs, good values, best practices and innovative merchandising, then brought them back to Main Street.
And we'll do it this time, and next time and the time after that. Because that's what we do and that's who we are.
