There once was a fellow by the name of Joseph Kennedy.

As the stock market crashed, he started buying undervalued stocks.

He quickly became one of the richest men in America -- and created an American political dynasty.

This story put me in mind of him.

In a down real estate market, they came to buy. They came early, they came in numbers and they came with bank checks for $5,000.

By 10 a.m. Saturday, more than 700 people filled a hall in the convention center here for what real estate agents say is the largest auction of foreclosed properties ever in Minnesota, with more than 300 houses or apartments for sale in two days. Opening bids ranged from $1,000 — for a three-bedroom house — to $729,000, for a five-bedroom house on 11.9 acres. The crowd was standing-room only, with more waiting to enter. Some were looking for homes, others for investments.

“It’s a symptom of the foreclosure crisis,” said Jim Davnie, a Democratic state representative in Minnesota. Mr. Davnie said he had concern that areas already hit by the foreclosure crisis would now be hit by investors buying properties to rent them out, “which makes neighborhoods less stable than owner-occupied housing.”

But in the loud, overcrowded hall, the misery of subprime loans, exploding adjustable rate mortgages and slumping sales meant one thing: opportunity.

And that is the reality of a market-based economy. There are winners and losers, people who have acted unwisely and those who take advantage of the resulting misfortune. That is part of the visible working of Adam Smith's invisible hand.

Am I saddened by the loss of homes to foreclosure? Yes, I am, for each one represents a tragedy for an individual or a family. But at the same time I realize that the economic cycles will bring in those who win -- and become rich -- every time someone suffers such an economic misfortune.

Posted by: Greg at 09:43 PM | Comments (1) | Add Comment
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