Option None

I was, up until August, totally bomb proofed during this mild recession. August brought cuts to my Elk Grovian e-Tran bus service, reducing my options to get to work without the use of my private automobile. The recession hit home for the first time.

The second recessionary hit occurred yesterday, when news that Russ has abandoned my old house that I sold him in 2006. He will foreclose. I am still carrying paper on it.

When I moved to Elk Grove in 1997, Russ wanted to rent my old Sacramento house, and while I wanted to sell it, he started renting the day I moved out and he rented it until 2006 when I sold it to him. Back in 1997 he couldn't afford to buy it, so renting was a good option for him until he was ready to buy. He was finally ready to buy in 2006. He made a colossal mistake by buying at the peak of the market.

Russ had no business entering into a mortgage he could barely afford; his broker had no business charging him such fees to arrange the sale; the bank, Option One, had no business offering such a loan. I tried, in all sincerity, to convince him not to do it. I tried, in all sincerity, to tell him to use another broker because I saw what he was going to get charged...but he did it anyway...along with one million, nine hundred thousand other Americans who also thought that if they didn't buy then they'd never be able to afford later, because everyone thought the good times were going to last forever...

I made out like a fucking bandit. I sold at the exact peak; I sold the same year I started at SMUD during the only year I've ever had a depressed salary -- so I paid zero AMT. Instead of buying his and hers SUVs like most other sellers, or a 1031 like-exchange that everyone suggested I do, I instead plowed the proceeds into reducing my own mortgage. Everyone, from my investment advisor, to Russ's broker, to the title insurance lady, to the escrow officer -- everyone told me I was an idiot for paying the capital gains and not buying a like property to continue the 20% ad infinitum returns...because the good times were going to go on forever, they said.

Option One paid me a shitload of money and later lost out. They have ceased to exist; they are no longer...they are Option None. As for my second -- Russ will continue to pay me, although truthfully, it's like paying on a car with four flat tires. To me this second has always been funny money, and some of us are still laughing, because the good times are going to go on forever...