In the frantic pace of everyday life, it’s easy to miss business events on a national or even global scale. Even a huge bankruptcy or plunge in the Dow can’t compete with unpacking moving boxes, rushing for the 43 bus or touring elementary schools.
Ron and I moved to San Francisco in July 2007, and even two business journalists like us failed to notice that this financial, professional and personal leap of faith was executed against a backdrop of economic collapse. Looking back, our sense of optimism was stunning, and surely had no basis in fact. We did notice the mortgage crisis – um, our house wasn’t selling – but there was still plenty of work in San Francisco, retail stores were packed with shoppers and San Francisco office space was reaching $100 per square foot (seems incredible now). We fretted about friends and family in Michigan —a state which never did get the full benefits of the most recent boom and was visibly sagging – but considered ourselves well out of it.
Like everyone else, we were simply too busy. Daily life requires some tunnel vision: you can’t remember to pack lunches and pay bills if you’re fretting over hedge funds at Bear Stearns or executive bonuses at AIG. I was too busy dealing with our own red ink to worry about Chrysler’s. I was tracking kindergarten tours in October 2008, not the Dow, which plunged below 10,000 that month.
Were we really that clueless? I didn’t want to believe that, so I gathered a timeline of major financial events in 2007-2009 and added what my family was doing at the same time. My conclusion: yes, we really were that clueless.
Bloomberg News reports on the linkage between increased foreclosures and localized housing price declines.
-- Benny’s wooden Thomas the Tank Engine trains go on recall. Ron leaves for San Francisco.
Bear Sterns spends $3.2 billion to bail out two ailing hedge funds that invested heavily in subprime assets.
-- Two weeks of single motherhood in Michigan — filled with packing, potty training and house showing — and Christine’s ready for a padded cell.
The Boston hedge fund that manages money for Harvard University’s endowment and the Massachusetts state pension fund loses half its value.
-- Ron, Christine and Benny arrive in San Francisco to start a new life there.
U.S. Treasury Secretary Paulson calls the bursting housing bubble "the most significant risk to our economy."
-- Christine moans about her long to-do list. “I don't have a California driver's license. I can’t remember my new phone number. Benny's preschool needed a form filled out by a pediatrician, which required finding a pediatrician, making an appointment, finding the office, etc. Now I've finally got the damn form, but I keep forgetting to bring it to the school.”
The recession begins, although we don’t know it yet.
TO BE CONTINUED