The Market (not the building)

Today, news hit that Citigroup will buy the banking operations of Wachovia, which has a large local presence among the many banks that operate in the Roanoke Valley and western Virginia generally. This follows several weeks of tumult that have rocked the fundamentals of the U.S. economy.

For several years, mortgages as investments seemed like a good deal, where easy money was made and it appeared that there was little risk involved. We now know this to be entirely untrue, and many economists had previously predicted the situation we now find ourselves in. In hindsight, it makes perfect sense that buying securities backed by mortgages were only good investments if 1) home values continued to increase at high rates, 2) the economy generally continued to grow as rapidly as it had been, and 3) there was not a significant increase in defaults on home mortgages. It appears that all three of these factors have gone against investors -- the perfect storm.

The good news to be found amongst all the bad news is that home values in the Roanoke Valley as well as the New River Valley continue to remain stable if not continuing to increase at a sound rate. We should remain confident that this trend will continue and that we experience an isolated market due to the presences of Virginia Tech, the CRC and within our own valley, the coming of the new VTC Medical College.

The main area of concern for me lays primarily with seniors and the disabled, most of whom live on fixed incomes. This is not to say that the rest of us will not face hardships, but a great deal of these folks receive Social Security, though this income alone does not fully subsidize the many expenses, including healthcare, utilities, home payments etc faced on a monthly basis. Often seniors and the disabled must dip into pension plans to make up for monthly shortfalls in income to pay for the entirety of expenses.

My concern is that, not today or tomorrow, but in six months to a year, many of these folks will wake up and see that their 401(k) or other pension plans have suffered from what used to be safe investments, namely, financial institutions. I believe that it is worthwhile for us to look at ways to help seniors and the disabled who may begin to see this happening and to work to try to find ways to help them should this scenario occur.

We should try to think outside the box and find any ways that we might be able to accomplish this within the budgetary constraints that we face nationally, statewide and locally.

This is a moral and fundamental need faced by those most financially fragile, and it will take all of us working together to help alleviate the difficulties that might soon become reality.