Ripples from Butterfly Wings

Posted in Events, Life in general at 10:28 am by Marion

Today I’m going way out on a limb, but even writers are taking an interest in the economy these days.

Yesterday I spent more than one hour on the phone with a senior loan officer at Bank of America, which owns our mortgage … along with most other U.S. mortgages these days … BOA is one of the last soluble banks around, having managed somehow to navigate last year’s housing and stock-market crash. We have managed to take nearly 10 years off our 30-year mortgage. Of course it’s still a long time before we actually own our home.

So why is a writer like myself suddenly refinancing the house? While the housing market has taken a nose dive, loan interest rates have sunk to historic loans.

Today, I read this article in the New York Times and I start to see the big picture:

Bank of America Raises $2.8 Billion

HONG KONG — The Bank of America raised $2.83 billion from selling part of its holding in China Construction Bank and Hong Kong’s richest tycoon followed by selling a $500 million stake in rival Bank of China.

Shares in China’s big banks skidded on Wednesday after Bank of America’s early-morning sale, with investors expecting further sell-downs in the face of slowing earnings growth at mainland lenders and the lapse of lock-up provisions on stake holdings. (MORE)

Suddenly I see how my mortgage is related to a company in China … which is reeling from lowered demand for consumer goods … the threat of unemployment … and possible protests related to the upcoming 20th anniversary of the Tiananmen Square uprising and massacre.

One of the world’s most superhot economies, China affects the purse strings of the world. So if it’s market starts to go south, then the U.S. economy could suffer in response.

I wonder how refinancing my mortgage relates to the BOA stock selling … and how it will affect my Chinese brothers and sisters … and it’s humbling to see how fragile our world has become, despite all of our technology and prosperity.

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