Is the American Dream Dead? I hope so!

If you had asked any random American in the spring of 2008 how they defined the “American Dream,” you would probably hear something to the effect of owning a house with a white picket fence, a few children running around the yard with a dog, and a BMW for him and a Honda Odyssey for her parked in the driveway. Fast forward a few years to the summer of 2011 and that same person may have a slightly different answer. It’s not that people don’t want the same types of things as they did prior to the recent downturn in the economy, it’s just that the thick veil of unreality that had clouded the eyes of millions of Americans for years suddenly became a little bit thinner.

For tens of thousands, the American Dream was achieved not by years of conservative spending habits and prudent investing, but rather a no-limits bared consumption lifestyle fueled by easy credit and people’s unwillingness to use the word “no” to stuff. “Should I buy a 3rd pair of shoes this month even though I have 5 like them at home?” Yes! “Should I buy a new Ford F-250 truck even though I’m not a contractor and I commute 35-minutes to downtown each day?” Sure! “Should I take out a HELOC to fund that $50,000 gourmet kitchen I’ve always dreamed of despite the fact that 99% of my cooking involves the microwave?” Of course I should! “Should I buy this home that’s 3 times larger than I need, with no money down and an adjustable mortgage due to adjust in 36 months?” Absolutely!

These examples may be comical to a degree but a quick step back a few years and that was reality for many people. “Let the good times roll” was the prevailing attitude for the masses and the result was the inevitable crash we all had the privilege to walk through. As our glass-house perceptions of reality came crashing down all around us, we adamantly cried “never again, I’ll do it differently next time.” Fiscal responsibility chatter started flooding in from the white houses of Main Street to the slightly larger White House on 1600 Pennsylvania Avenue. At last, everyone seemed to be reading the Tortoise and the Hare again and desiring to morph their lives to resemble that of the Tortoise.

Though the mess isn’t over for everyone yet, there are enough positive changes from the job and stock markets alike to see that a recovery is in progress. Life is returning to what many people would call normality;  in doing so, I wonder if all those people who begged to become the Tortoise, if given the 2nd chance, are doing so? I’m curious what lessons have really been learned during the down times? Have behaviors really changed? Do we really intend to be more watchful of our spending habits? Have our investment strategies sincerely become more conservative? Have the methods for obtaining the American Dream, at least the pre-recession versions, really died? I hope so for all of our sake. Otherwise, we’ll be right back in this position within a decade if not sooner.

A Real News Update

In case you haven’t heard, the market is actually up! Surprised? You shouldn’t be, unless your only source of information is found between the hours of 5:00-7:00pm on one of the three doom and destruction….I mean….quality news networks. Seriously, when is the last time you watched the local or national news and heard more positive stories about the economy, people, and cultures than you did about the bad things taking place? More than likely the answer is never. I’ve heard that “if it bleeds, it leads.” Unfortunately that phrase is all too true from the majority of today’s media outlets.

So if you’ve only been listening to all the garbage (IE. ABC, NBC, CBS, and CNN’s “news cast”) coming out of the tube, here’s a quick reality check of what is actually taking place in the local and national scene:

1. The Dow Jones Industrial Average (DJIA) is up to 8,500.00 and climbing. This is an increase of 29% from the market low just 3 months ago, and it’s up 6% in past 30-days!!! Where’s the news on that story? Even if the market didn’t move an inch up or down until March 2010, the annual return would 29%, and yet we still have another 7 months in the year to take advantage of the low market prices!
2. There 304,059,082 people out of 304,059,724 in America that are not infected with the Swine Flu (there are only 642 confirmed cases in the USA as of today, and only two people have actually died according to the CDC). In case you’re still concerned that you may become infected with the “world-wide pandemic of the decade” and you’d like to know your chances of catching this new flu bug, here you go….you have a .00000211% of a chance. If you happen to catch this little bugger you should buy a lottery ticket the same day because you must be one of the luckiest people alive according to the numbers!
3. Mortgage interest rates are near 50-year lows, meaning you can get a 15-year fixed rate mortgage at 4.5%, or a 30-year fixed rate mortgage under 5.0%. If you avoided the stupidity of interest only, “arm” loans, and other terrible mortgage products that we’re being offered everywhere during the past few years, then you’re in a great position to go buy that first home. (PS – There’s plenty of inventory to pick from, especially if you’re fond of Phoenix, Detroit, or anywhere in Florida!)
4. The Seattle Mariners are actually leading the American West by half a game and it’s May (Hey, it’s my blog so I can be proud of my hometown teams if I want to be).