How quickly optimism turns to reality when we discover its time to pay the piper.  Watching the frantic coverage of CNBC, I noticed the high definition graphics that point to leaner times.  Seven straight days of  losses on the stock market.  The Dow closes below 9000 exactly one year after the all-time high of 14,164.  Just one week ago, people were telling me, “It’s Wall Street’s problem.”  Now the credit crisis has spread far from the domain of New York’s financial elite.   Many T.V. pundits, who pedal non-stop information on the world’s business health, see unemployment rising to as high as 9% in the coming year.  I take little comfort in knowing many of these “experts” usually get it wrong.  These are uncertain times, which are shifting discussions from spending to saving.   

         Money experts say everyone shares a bit of the blame for this huge sell-off.   The government sponsored enterprises of Fannie Mae and Freddie Mac provided mortgages to those who couldn’t pay them back.  Unscrupulous lenders who encouraged people to sign terms they didn’t understand.  Finally, the individual who lied about his or her income to buy a home they could not afford.  We live in a plastic generation.  “I want it all, and I want it now,” so the song goes.  Do you want that new kitchen with granite countertops?  Borrow money from your reliable residence, which for many, is an ATM.  The problem is we kept on borrowing with no plan to pay it back.   Washington plays by the same rules. 

       “Materialism!”  scoffs my wise mother, who is 90 years young.  Yes, she was around when Wall Street crumbled the first time, before it was paved with junk bonds and credit derivatives.   The land of my youth, Pittsburgh, Pennsylvania,  was decimated by the Great Depression.   Steel blast furnaces, that inspired one 19th century writer to dub the city “hell with the lid off,”  cooled off considerably until they were awakened by World War Two.  But in 1933, Pennsylvania had an unemployment rate of 40%.  Those were hard times. 

          Mom talked about my grandfather selling the house to a friend for a dollar to avoid foreclosure.  He was a carpenter, who designed and built quality houses.   But in the 1930’s,  he did yard work for 25 cents an hour.  Grandma canned tomatoes from the backyard garden.  Those stewed tomatoes graced the family table as the main course for many meals to, as my mother says, “keep body and soul together.”    

          My father’s side was a little different.  Grandfather Schaad built several homes in the South Hills of Pittsburgh.  He could have been a wealthy man, had it not been for that dark decade.  He lost everything, when people occupying those homes could not pay their mortgages, and he carried them as long as he could.  Grandfather Schaad was a generous man–maybe to a fault.

          We know not what lies ahead in our electronic world of instant gratification, and self importance.  But these 21st century gyrations that threaten global financial markets make me think of a simpler time explained through the experiences of a 90 year old woman.   Those stories give me strength,  and the way the markets are going, we may need more of it in the coming months.

          Tom Schaad