Did the Housing Crisis Teach Us Anything?

Bank sign

I saw this large poster at the entry of a retail bank on Park Avenue today as I was walking to a meeting. I can’t think of a more ridiculous synopsis of what is wrong in the world that caused the financial crisis. Of course, your home is not “where the equity is”; your home is “where your family is”, and this simple lesson is what was so easily misunderstood in the 2000-2006 bubble. A home is not a material asset to be “flipped” to a bigger sucker as a page out of the greater fool theory playbook.

But not only is the tag line itself disturbing, the context is even more offensive. What exactly is the bank marketing? Their willingness to LEND one money from the equity of their home, obviously. So, they are advertising their ability to reduce your equity by glorifying the beauty of equity!! It is really quite bizarre. If people want to or need to borrow money from the equity of their home, fine. But the message of this ad is incoherent and inconsistent and misguided. It is false on its face, and the message behind it is even worse.

But other than this sign, I love every single part of Park Avenue.