Analysis: markets are funny things.  They’d be much more predictable if they weren’t being operated by humans, who tend to overreact to everything.  When economic data is less negative than expected, they buy things really fast, which leads to selling them equally fast when data is less positive than expected.  Right now, it appears the economy is starting to bottom out, or at least the rate of descent is slowing.  But it never slows in a gentle curve; there are bumps and bruises along the way.  Those bumps are what we’re seeing now.  It’s keeping rates generally down, and allowing us to lock on the dips.

Apropos of this, let me remind everyone that being able to lock your rate is a function of having a great deal of information about your loan already in the system when the opportunity presents itself.  Don’t be cavalier about this.  Especially in the current regulatory climate, I need far more data about what we’re doing with the loan than I once did.  If I have it, I can lock very fast.  If I don’t, I can’t lock at all.  The best defense against losing your sought-for interest rate is to work with me to get you into a lock-ready position, then we can pull the trigger at the best time for you.

Cj

Analysis: Economic news has been less bad than expected for most of the week.  The gummint is auctioning off $75 billion in treasuries next week. Traders are still vacationing coming into the fall session, and Congress is about to go on recess.  Combine all this, and the markets are less jittery than they were, which pulls money from bonds and puts it into stocks, making interest rates rise.  That’s the explanation.

The real question is: is the recession over?  Newsweek says so, for what that’s worth, and there are some signs that we may have reached the bottom of the trough.  Personally, I’m not so sure.  If by “the end” you mean that things are not going to go on getting worse forever, and that we are seeing a slowdown – even a stop – in the decline, then perhaps this could be the end.  If by “the end” you mean that the economy is going back on the offensive and a recovery has begun, then no, I think you’re out to lunch.  Most people think of the end of something as the point where that something stops and something new starts up.  By that definition, not only is the recession not over, it hasn’t really gotten started yet.

Lessons should be learned from the Great Depression, which this recession mimics in many ways.  The decline was steep and sudden, but that’s what we usually call a “crash”.  The thing that put the “Great” in “Depression” was the length of time before things came back to where normal would have been.  That’s what makes me more cautious here.  I think it likely that we could be in this trough a very long time.  It takes some years to undo the calamity we spent 30 years getting into.

Keep saving, keep paying off your debts, keep working even if you don’t have anyone paying you.  That’s the way out, no matter what the broader economy is doing.

Cj

P.S. Apropos of this, I’ve finally posted something that’s been percolating for a few months.  It’s called The Most Important Post of My Life, and I’d be grateful if you’ll take a second to read it.

What’s to be done?  Look, your resume is really not all that important in this kind of economy.  What has happened, effectively, is that we’ve been playing musical chairs, and the music has stopped.  Instead of there being 10 people and 9 chairs, there are 10 people and 8 chairs, or 7, or even 5 in some industries.  So people sit.  Now the music starts again, but the people in those chairs are not getting up.  No way.  Then the music stops again, and a fellow comes in and takes away another chair, even though someone is still sitting in it.

Arranged around these chairs are all the people that didn’t have a place to sit before, and still don’t have a place to sit.  True, once in a while, one of the chairs empties, because people do die or have to move to St. Louis to tend their ailing mother.  When that happens, a thousand people try to sit in the chair at once.  The problem then is not that your skills aren’t up to the task, it is that there simply aren’t enough chairs for people to sit in.  It’s not your fault you’re standing.  It’s not your fault there aren’t any chairs.  It is your fault if you don’t realize this, and start to think differently about what to do about it.

Mr. Cocky, you’re saying, it’s easy for you to say, being self-employed.  Nobody fired you.  Right, well, let’s talk about that.  First, I’m in the mortgage business. Raise your hand if you think that’s a boom industry.  Second, although it’s true that I still have work, it’s also true that most of what I do every day ANYONE can do without a lot of special training or finding someone to hire them to do it.  It can pay well or crappy, depending on how good you are at it, but no matter how good you are, nobody gives you a paycheck for showing up.  If I don’t produce funded and recorded loans, I make nothing, no matter how hard I work.

This is a good thing, at least for me.  I have never been confused about the source of my check.  In boom times, when everyone has a job, it’s easy to feel like the checks are just out there for you to pick up, and it’s simply a matter of figuring out what company name you want to be on the top of it.  In a recession, you realize that this isn’t so, that somewhere someone has to sell something or nobody gets paid, even the middle managers.  When that doesn’t happen, there are a whole lot of people that lose their jobs, most of whom didn’t really process their connection to the production-and-results people that brought the money in.

So yes, I’m fortunate.  I’ve been in a position where my health insurance lapses because I can’t pay it this month, and my office rent comes out of the same check my groceries do.  I’m well positioned to understand how to fight a recession because my job treats all economic conditions the same.  I’m always looking for work.  Always.  I don’t get laid off because I never get laid ON.  I’m especially well-positioned because the close relationship between business and personal income is obvious, and the tradeoff between doing the right thing and doing what looks like the profitable thing (often, not the same thing at all) stares me in the face every single day.

And now it’s there in front of you, too.  Even if you have a job, unless you’re one of a vanishing few, you know the feeling in the pit of your stomach when you wonder what’s going to happen next, and how you’ll feed your family if the next step takes you off a cliff.  And if you’re out of work, you’re falling already.  So now what?

I have a couple suggestions.  First, separate who you are from what you do for money.  The former is important and durable, the latter is not important and subject to change without notice.  This is especially hard to believe if you’ve been doing the same work for 20+ years, but it remains true.  You are not a computer guy, or a farmer, or the President of Spain.  You are much more than that.  That needs to be remembered.  You’re a son, a daughter, a brother, a mother, a father, a wife, a Cubs fan, a fisherman, a gardener, what have you.  What you do for a living is only one of the things you are, and not even the most important one.  When you lose your job, you’ve lost nothing – your job is what you do, not who you are.

Second, once you have #1 down, you’ll realize that you don’t have to go looking for a new job doing the same thing you were doing before.  In fact, the odds are overwhelming that you won’t be able to find a job doing that same thing.  You can put your resume out there in the usual places, and you should, but you ought to put it in other places, too.  Use who you are, not what you do (or did) to find work. This requires a bit of explanation, and a rejiggering of our usual thinking on the subject of employment.

We have to stop thinking about ourselves as consumers, with employers as producers of jobs that we will consume.  This sound silly?  It’s exactly how most people think about the job market (even I do it – the “job market”, like the supermarket).  Employers put jobs out there, and we select them like cold cuts.  When there are no jobs out in the display case, we get really annoyed.  But should we?  Whose jobs are they?  Do we have some natural right to have someone employ us?

I don’t think we do.

Macroeconomic Tangent: It is precisely this kind of thinking that leads to very silly “American jobs” rhetoric, as if the job belongs to America, and not to Intel.  Intel’s purpose as a company is to create the maximum value it can for the smallest possible cost.  That’s what businesses do.  There’s no good cursing them for finding that they can get good enough work somewhere else, where it costs a lot less.  Either we need to do better work, or we need to do it cheaper (or US tax policy needs fixing, so that US workers are not priced out of the market by Washington’s incomprehensible greed, but that’s another post).  END Macroeconomic Tangent.

You, yourself, are a producer.  You produce work.  You have wares to sell.  It is YOU that are the supermarket – or are you?  Perhaps you’re just a corner store.  Whatever.  Doesn’t matter.   Flip the concept on its head, and start thinking about what you can provide in terms of value. What work can you do that needs doing?

If you want, perhaps not the shortest, but the most satisfying, and ultimately the best course to employment, make yourself indispensable to someone. Go find a place to do some work.  Despite the downsizing going on, there’s a greater need for work to be done now than ever before.  Everywhere there are businesses struggling to stay afloat.  Why?  What do they need done?  Why couldn’t you do some of that?

I do very definitely realize that this is a different way to look at things.  I realize that I’m advocating doing work for people that have not agreed to pay you and perhaps cannot do so.  Yep.  You should.  I do it all the time, people.  When you come to me and we start working on a mortgage, you haven’t agreed to pay me, and you only will do so if the loan closes and funds.  I CONSTANTLY do work for people that haven’t agreed to pay me, just because the work needs to be done.  You can do this, too, without a mortgage license.  Offer something else besides mortgages.  Do you have management or accounting experience? Marketing skills?  A broom? EVERY business you can find needs your help, especially smaller businesses.

If you are successful, that business will likely survive, and that will reduce the competition out there for the jobs that are available, because those people will still have work.  If you are very successful, the business will grow, and will need more employees.  Who do you suppose they’ll be most likely to hire when that happens?

I currently employ an accountant.  She is my accountant because she followed this very course.  I was bellyaching about not having filed my taxes this year, and she said “Fine.  Give them to me.”  She worked on them a couple weeks, filed them, and now she comes to me and says “could I ask you to start paying me something?” and what can I say?  “Yeah, I guess I could, since you saved me $10k on my taxes without charging me a dime.”  And that is why Iron Pen Bookkeeping does my accounting.

I strongly believe that if you get a small group of people together that have time and skills and initiative, you will fairly shortly have viable business ideas, and more than you can possibly tackle.  I believe this because my office is a place where those people come, and shoot the bull, and businesses rise from the ashes of the discussion and take wing.

To return to the original analogy, what you’re going to have to do to find gainful employment in this economy is not hone your resume or find the right online job listings.  What you’re going to have to do is make chairs.  If you want to be sitting in a chair, you’re going to have to make one.  The era of free-range chairs is over.

In short, if you want to fight recession, start where you are.  You don’t need the GNP to rise.  You need the GLP (Gross Local Product) to rise.  More to the point, you need your GPP to rise.  Start improving your Gross Personal Product.  Make a chair.  Repeat as often as necessary.

If you want help, come see me.  I’ll make time.

On the other hand, since according to Mortgage Strategy only 19% of the real-estate industry is even kind of using social media (this from a tweet this morning), and from experience I can testify that 90% of that 19% is using it badly and doing harm to itself, I thought I might at least give my opinions about how social media might be used well in a real-estate context.  I am certainly using these tools better than most in my industry, and that has translated into gigs at Zillow and the Daily Herald Newspaper, so apparently my ideas do not entirely suck.  Take them for what they are worth.

Here’s how I got to writing this:

From Seth Jenson, a really good Realtor in Colorado: “Chris, what do you think about Twitter vs. Facebook? Do you think I need to be on both?”

Seth-

Whoo.  What a question.

Facebook is a terrific way for people to connect.  I’m no huge FB-er; I have about 400 friends, which is not a big number by any stretch of the imagination.  I don’t spend a lot of time trying to find friends on FB, or I likely could have a couple hundred more.  And maybe I ought to do that.  Probably I ought to do that.  But it depends on what I’m using Facebook for.

If I’m using Facebook to keep tabs on people I know – my family, my close friends here in town, a few of the guys I went to HS with – then I’m doing it the right way.  You can’t possibly keep track of the doings of 1000 people every day.  Impossible.  However, if one of the reasons for you to be on Facebook is that you want people to remember YOU, well, then you might want a few more friends.  You’d want to update your status at least once a day, and probably more than once.  These wouldn’t all be real-estate updates.  In fact, most of them would be about anything except real estate, and would be only for the purpose of strengthening relationships.  It is those relationships that bring the referrals that make you successful, and coincidentally, it is those relationships that make your life richer and more rewarding, so that’s a happy thing.  Facebook makes strengthening those relationships easier than ever, so I would definitely be on Facebook.

Twitter is very different.  I love Twitter, myself.  I like Twitter better than Facebook.  Where I post or comment about 5x a day on Facebook, I do that twice as much – or more – on Twitter.  Twitter is a research tool as much as it is a communications network.  I get a lot of my news from Twitter, most of my reading material, and have most of my online conversations there, even more than email.  Now, again, it depends on what you’re using the tool for.  Twitter can be a huge and pointless waste of your time.  It can also do you harm, I think.  But if you use it with respect, I think it has the potential to be incredibly valuable.

Here are some examples.  I am not a big noise on Twitter.  I have fewer than 200 followers.  I’m following only about 100 people.  I determined when I got involved that I wouldn’t try to amass a gigantic following until I had some idea what I was doing it for.  I didn’t know enough about Twitter to know what I was doing, so I figured I’d start by following some people that DID know, namely, those that have good blogs about social media.  So I followed Amber Naslund, Olivier Blanchard, Beth Harte, and some others, and learned about what Twitter could do, and more importantly, what I should NOT do on Twitter.

Then I started using the search functions of TweetDeck – TweetDeck is an indispensable tool for using Twitter – to follow mortgage news.  There were some interesting conversations that came out of that, which resulted in my following Tyler Osby, Dan Green, and Agentopolis and a few others.  They are doing most of the blogging and commenting about what’s going on in the mortgage industry.  There were two or three other topics that I thought would be good (hobbies, etc.) so I started running searches on those as well.  I’ve acquired my 160 or so followers through conversations, not spam.  In fact, most of those that are following me would unfollow if I used Twitter to promote myself ad-style.  But because I blog, many of them are reading what I write, and following them allows me to read what they write, get smarter, and engage them in conversation.  Again, for me it is about the relationships.  It’s made me better at mortgages, even though I haven’t spent a great deal of time on Twitter talking about mortgages per se.

Bottom line?  Yes, you should be on Facebook and on Twitter.  Figure out what you want these tools to do for you, and design a strategy to get them to do that.  Expect it to take time.  If you do it right, it will take a lot of it, and a fair amount of work as well.  Farming does.

Good luck.  Follow me at @chrisjoneslehi, and I’ll follow back.  You can friend me at www.facebook.com/chrisjoneslehi.

Cj

P.S. I’m thinking of changing my legal name to “Chris Jones Lehi”.  It’s just so dang much easier for people to find me that way.

Just kidding, Dad.

P.P.S. I’ll have Volume 2 of this post next week, with examples of what to do and what not to do on Facebook and Twitter, and how I think Realtors and mortgage agents can use those tools most successfully.  Stay tuned.  And for Heaven’s sake, get the opinions of some of those above that really know what they’re talking about.