About a year ago I was going through some old family photos and slides picking out a few to scan for a digital collection. This one caught my eye because of its colorful depiction of a nice spring day in Lake Jackson when the local S&L flew a hot air balloon over town. When I saw that they were using the Shy Pond as a take off and landing area, I headed that way with my 35mm camera that was already loaded with Kodachrome, one of the best films ever made.
The photo also caught my eye because it is symbolic of the fate of S&Ls in America that was due to befall them over the next five years. Do you remember the savings and loan bubble and how quickly they fell from their high-flying, money-making ways and deflated for all the world to see? This S&L held the original mortgage on the home we bought in Lake Jackson in 1982. Rates were sky high but due to plunge like the pretty balloon in the picture.
Ours was one of American S&L’s good mortgages at 13%. So, of course, we refinanced it at our first opportunity as did most of their other borrowers. By spring of 1989, just five years later, American Savings and Loan was insolvent and its chairman was being charged with financial misdeeds which earned him a little time in jail.
I remember standing in line to withdraw a CD they were holding for our United Way. The ten per cent yield was a good deal, of course, but I have never trusted high interest rate offers since then. Outliers are sometimes outlying (or maybe out lying?) for a reason that ought to be easy enough to understand: they need your cash more than you need the security and return they are offering. Sometimes the return exceeds the security. It took something called the FSLIC to make that CD good. I’m glad I got there before the FSLIC went under, too.
I wonder who got the hot air balloon in their insolvency settlements?
South of Town: Notes and Scenes from Texas' Upper Gulf Coast 