Greek Mortgages and Dot-Com Deja Vu

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“It’s a scheme they have in America where the bank buys the house and you rent it from the bank.”

That was my father-in-law at a cocktail party in Athens, Greece, explaining the concept of a mortgage to group of older European guests. Until very recently, American-style mortgages were virtually unknown in Greece and many other countries.


The explanation seemed quaint to me. That is until the sub-prime mortgage crisis. Traditionally, in places like Greece, you might borrow 20% of the purchase price of a house, but certainly never the 80-90% we do here. In much of Europe, property passes down inside of families. And the rest of the world, generally speaking, does not love debt the way we do. Though in some places they’re catching up fast. Along with Big Macs and cigarettes, our credit-card habit is another unhealthy export.


The crisis in the mortgage industry has made me sensitive to another phenomenon: a new dot-com-ishness in the air. Money is flowing again from VCs. The M&A engine is torqued up. Tech consultants’ rates are up at $175 an hour. These consultants are turning down good gigs, or requiring two- and three-month commitments, telling their clients they can get more across the street. People in stable jobs are saying they can make more on the free market as consultants. Does anyone remember 2001 anymore? Or are we all packing our camping rolls, off again to pan for gold?


I believe in startups. I think many good companies went out of business in 2001 simply because they had the financing rug ripped out from under them. I have not heard my father-in-law explain dot-com investing. But if he did, I imagine it would go something like this: “It’s a scheme they have in America where they invest in small companies so that some people can get rich. But then they close them because they don’t really like running companies in America. Just starting them.”