The Big Apple mag takes a shot at purveyors of “balefully misguided progressive discourse,” i.e. me and a few others who cheered the GameStop rally. A note in reply
Matt- stay strong. Fuck the phony bullshit elitists and their cute little MFA essays. Stay close to the real people on the street. That’s where real life exists.
The sub prime meatloaf bundling great loans with redline crapola was made to solely to pass the reqs of Fanny Mae and Freddie Mac. If those quasi governmental entities were not legally required to accept that shitloaf none of that would have happened. Gov't pressure for "geenlining" is the direct cause.
File under "true but will absolutely be called 'racist'".
One of my son's black friends was mystified when a (Countrywide) mortgage agent tried to sell him a 400k house with a variable (on his $30k income) by showing him a chart of home prices over a decade and a half and telling him "Look, if you're not making more money in five years, just sell and pocket the equity from the price increase! Easy money!"
He'd made his peace with being relatively poor and carved out an enjoyable life. He smelled scam and noped out. But it was an interesting data point a year or two later when it all hit the fan.
As I read this something occurred to me. Maybe the Covid hysteria would have been less had the government NOT intervened. So many people have been hypnotized by stimulus and clickbait crack because that very stimulus allowed that to happen.
I’m still appalled by the fact my grandchildren’s tax dollars will be servicing debt we issued to prop up Carnival cruise lines, who basically uses serfs as their staff and registers there ships in far flung spots around the globe to avoid American labor laws. American Airlines is another one that should’ve been allowed to die. It all disgusts me. The truly poor haven’t been helped as is evidenced by the homelessness epidemic in many major cities.
This morning I walked around in a building on a lake in Southern Oklahoma that was built by the WPA and CCC back in the 30s. Almost 100 years old and these things are still standing - to me a testament to what true government “aid” should look like. These jack wagons in DC keep printing money to keep the oligarchy rich and the lobbyists keep feeding them more dough, and the cycle continues.
Instead our tax dollars go to help a few kids get wealthy, a few billionaires to have a few less billions, and will still leave us morally and spiritually bankrupt...and about the same as we were before economically. What a farce!
COVID hysteria began when Wuhan supply chain interruptions led to razor thin leveraged margins “eroding”. That meant bailout or ruin. This is the start of corporate media whores whipping up a panic. $$$
Then after Trump stumbles into a trap its seen as a way to undo him - it worked.
COVID restrictions are also a good way to prevent free assembly, and the hated religious worship.
COVID crushes small businessmen- who just might support the GOP.
COVID destroys your enemies politically, disenfranchises their voters, lets you take trillions, enriched connected Tech Lords individually by billions each, and a year later we’re living in Communist Eastern Europe 1980s in terms of political rights with the social safety net of Brazil’s Favelas.
COVID is Annus Mirables for the Elites, and Annus Horribles for the rest.
A few items here are straight bananas, but the fatal flaw in your thinking lies in the inference that the group you call “elites” doesn’t include both parties (it does). Republicans aren’t the good guys. There are no good guys. As long as people like you lack the imagination to see beyond the two-party paradigm, we’re fucked...covid or not.
Oh, really? You’re just totally flummoxed by my reading any of those remarks as right-wing/Trump apologia? Come on. It barely even qualifies as subtext.
Agreed, the 2 party system is currently a mirage. The party in control is the Uniparty where the labels D and R no longer have any meaning as they both draw from the top end of the enormous trough. Its One big club. Whatever R or D in "in power" no longer has any meaning, they all feast just as succulently. They are on the same side and work together because they suckle from the same teat of the entrenched bureaucracy. They know the FIB and MSM control the elections. Enjoy your Red White and Blue Banana republic with Dominion certainty of electoral results.
But what if Trump can claw to actual leadership of the R party? Push aside the obvious grifters, and joe public knows who they are. Only then will we have a real 2 party system again. From my POV this is the only salvation for a USA as founded. It is that serious.
Agreed! Lockdown (lots of studies of the damage) show an exponential growth of health stress due to job loss, family separation and isolation. Think of all the money Pharma will make treating all the depression and stress as a result. Then add all the experimental " vaccine" money and the drugs they will provide people who have experienced side effects (Bells Palsy, fertility issues, heart issues etc.)
He's not talking about lockdowns, he's talking about government bailouts of poorly managed businesses and unimportant industries (cruise lines....? It's inconceivable)
As far as I know cruise lines didn't get any money or loans from the stimulus packages thus far. Neither has Boeing although they came close and many people believe and claim they did . Airlines did get 15 bil
Look up "Strength Through Joy", a Nazi program (yes, I know, I just Godwinned this, but it is relevant). It shows how cruise ships might just have some importance to a totalitarian overlord.
Spot on! I recounted my own story on the other Game Stop post, so I'll just say here that the part about the shame was very, very real. I was 40+ years old when we defaulted on our mortgage. Prior to that, we had platinum credit. And our mortgage was not an ARM- didn't matter- the value of our home depreciated about 45%. It was beyond embarrassing not to be able to pay our bills, and even friends and family insinuated or said outright that we homeowners were to blame. And yes, unlike this past year where people have been able to dip into their retirement accounts without a tax penalty, we paid the hefty penalty as we drained our accounts to try to stay afloat. There was also no moratorium on evictions or foreclosures. I know there are many readers of this blog who (rightly) criticize Democrats for their many failures during the 2008 crisis. I remember also, though, a Mitt Romney statement that was roughly, "Don't fight the foreclosure on your home. Let the VCs come in and buy up the properties." Democrats are very weak on these matters, for sure, but Republicans will also leave you high and dry with not so much as a "by your leave."
Whoa Nellie! There are so many comments here, I'll just reply to the original post. I had posted elsewhere that my husband lost his job, which was 2/3 our income, and then was diagnosed with Parkinson's and could not get another job, which was what made it impossible to pay the mortgage. Had this unfortunate event happened without a drop in the housing prices, we would have just sold our property and moved and downsized to my income level. It was the trifecta of loss of job, health crisis and plummeting housing market- all of it continuing for years that made our situation impossible to sustain.
I'm not looking for anything here other than to say that sometimes, even responsible people can get their boat swamped. Not asking anyone to feel sorry for me. Just saying that my family, like a lot of other families, got hit hard by a macro economic downturn that was not entirely under our control.
Your loss of short term liquidity due to the drop in housing prices was unfortunate. By rights, you should have been able to sell the house for a value approximating the mortgage. It is not typical of the things that were going on in 2008. Most people were using the house as a piggybank, and refinancing to get more money out of it to live large. Alternatively, people were flipping houses and expecting that the game of musical chairs would never end. It always does, though.
«I was 40+ years old when we defaulted on our mortgage. Prior to that, we had platinum credit. And our mortgage was not an ARM- didn't matter- the value of our home depreciated about 45%. It was beyond embarrassing not to be able to pay our bills, and even friends and family insinuated or said outright that we homeowners were to blame.»
And indeed you were to blame: whoever signed up for a loan on 10-20 times leverage on an asset that can go down in price should be blamed if that asset goes down in price.
If you could not afford the risk of a 45% loss on a leveraged speculation you should have been a renter. Do you think that you are entitled to own real estate, and risk-free too? Your implication that you were not to blame can only be justified if someone had formally guaranteed that the price of your house would never fall that much. You may have been deluded that it was a one-way bet, but turns out nobody guaranteed that to you.
Sure you are bitter that most people who owned real estate before you did get away with the risks of highly leveraged borrowing over a volatile asset, but eventually someone eventually will be burned (not Wall Street of course) by that volatility.
Also: a 45% drop? Only highly speculative real estate close to the "beachfront lot in Arizona" type had a fall that huge.
How does one go from being able to afford a payment on a home when it is worth $500,000 (for example) to not being able to make the exact same payment on the same home now worth $300,000? The payment is based on the loan, not the value. The only real "cost" is being unable to sell at will.
* Many if not most of them though they would have to make the payment on the $500,000 mortgage only for a short period, and then flip the house for a big cash profit.
* Some lost their jobs in the recession and they had never expected to have at the same time the downside of a crash in house price and a loss of their salary, because they thought that cannot happen, must not happen, to middle class people, only to lower class "losers".
Loss of a job is entirely different. Neither poster referenced a job loss. I personally had friends and family despairing the loss of equity, as if financial ruin. They would say things like, "I'm upside-down on my house and don't know what I am going to do!" There were millions of people who thought they were badly harmed at the time, but they really weren't - everything, for them, remained the same other than the value of an asset. We see similar now due to the pandemic. For example, governments at all levels have stopped all evictions for all reasons. Many evictions are unrelated to Covid. Nobody mentions the DIFFERENCE in evictions numbers. There is an average baseline. Our government should focus on those who can demonstrate harm, not blanket solutions "helping" millions who don't really need it. Everyone I know received the Covid payments, while nobody I know was financially impacted by the pandemic (aside from now working from home more and not going out and about as much). Many people claim harm where there is none, diluting the population actually harmed. Same with the '08 financial crisis - many were actually harmed and some were merely inconvenienced, yet all demanded the government "do something." Legislators don't even write legislation, let alone read it. Lobbyist's lawyers write it for them, and guess who gets the biggest benefit? Certainly not those who really needed it.
«Jillian is not responsible for her house valuation halving in a year»
But was she responsible for exposing herself to that risk or not?
Was she forced to buy or did you and her have the option of renting? I know a number of people who starting in 2005 decided that the risk was too big and sold to people like you and Jill and switched to renting to minimize the risk.
How do you become risk adverse to corruption and fraud? how do you forecast for that? What a ridiculous suggestion. You know it was fraudulent criminal behaviour right?
«How do you become risk adverse to corruption and fraud? how do you forecast for that?»
That seems to me the fancyful claim that speculators who borrow at 10-20 times leverage because of the potential big profits of a volatile asset have the absolute human right to expect that there will no significant downside.
«You know it was fraudulent criminal behaviour right?»
Then sue the culprits and get damages. But the Wall Street criminals didn't defraud their borrowers (except in some cases during repossessions), they defrauded their shareholders.
Anyhow, in reality another category, those people who have to work for a living have no right to expect it will never have a significant downside, and that it will last them until they retire, and must always be ready to cope with losing their job, which is a 100% cut in their income, for whatever reason they lost it.
Actually, I have to hop on here. I stayed out of the housing market from 1999 to 2009. Partially, it was the result of luck/a bad divorce but every time I was tempted to get in and buy, I looked at the house prices and said "there has to be a correction soon, this can not continue" and avoided it a few more years. Damn glad I did. I also kept my money out of stocks by not having any money. :-)
My point is that everyone with half a brain could see things were not right in the mid-first decade of this century. Overheated building, prices multiplying - that's not a boom, it's an asset bubble. We'd seen this before with the dotcom stocks.
sorry about to hear about your experience but fluctuating value of the house is not correlated to one's ability to come up with a set monthly payment anymore than a 500 per month you pay in car payments is correlated to the fact that in 4 years the car going to be worth 40% less.
Most people who buy houses - and who were foreclosed on during the crash - bought those houses to LIVE in. Not as speculation, nor particularly as investment. Simply to have a place to live and raise their kids and maybe retire.
When you pay rent, at the end of the deal, you walk away with nothing - no principal at all. When you buy a house, you pay the mortgage for 20 years, or 25 or 30 - and then you own it. No more monthly payments.
And I'm not sure what part of the country you live in, but in California, in many markets it's actually more expensive to rent than to pay off a mortgage.
We bought our home to raise our kids in, and to spend the rest of our lives in. (Having written about music for the better part of 30 years, I've accumulated thousands of LPs - to the point that I told my wife that our last move was MY last move - my back has no more moves left in it. You move vinyl enough times, it wears on you. Next time I move out, it will be feet-first. And my kids can argue over the records.)
«Most people who buy houses - and who were foreclosed on during the crash - bought those houses to LIVE in.«
That's just handwaving...
«Not as speculation, nor particularly as investment. Simply to have a place to live and raise their kids and maybe retire.»
I have heard this ridiculous claim so many times and I always ask: so you would agree that there should be a law that homes should always be sold for the same amount they were bought for, if the goal of owning them is just to live in them without considering the speculative upside.
Somehow I think that many if not most people would not buy if they had to sell for the same price they had paid. The "certainty" of a big fat tax-free, work-free upside is pretty common as a motivation for buying vs. renting, and for buying as big as possible, with the highest leverage achievable, to get the maximum speculative profit possible.
«When you pay rent, at the end of the deal, you walk away with nothing - no principal at all.»
That is usually wrong: if you pay rent, you still got the money that would have gone into paying interest on the mortgage, which is usually over half the mortgage. Many have computed that if real estate prices were not ballooning it would be cheaper to rent and put the capital into securities. Putting the money into real estate rather than securities means that one expects real estate to balloon in price faster than securities.
«in many markets it's actually more expensive to rent than to pay off a mortgage»
That only happens if interest rates are low, that is if real estate prices are growing fast. And it does not take into account the risk that the price of the real estate could fall below the amount of the mortgage, while rents have neither upside nor downside.
In the end the only reason to buy vs. rent+stocks is the expectation that capital gains on real estate will be bigger than dividends or capital gains than on stock, that is that highly leveraged speculation will win.
Accordingly quite realistically BusinessWeek wrote recently:
“From the minute the average couple busy a home they're constantly calculating how much they'll make when they sell it, and most won't sell for much less once that day comes.n
“ if you pay rent, you still got the money that would have gone into paying interest on the mortgage” Just how fucking out of touch are you, actually? If you rent (like I have my entire adult life until a few years ago), it’s because you don’t make enough money or have a steady-enough job to feel comfortable buying. I wasn’t saving any money when I rented; I was spending that money on my rent!
«“if you pay rent, you still got the money that would have gone into paying interest on the mortgage” If you rent (like I have my entire adult life until a few years ago) [...] I wasn’t saving any money when I rented»
Usually I reject the idea that many adults are not mentally capable of understanding the simplest aspects of finance, but when I read deep imbecilic hallucinations like this I have my doubts.
Because you have simply hallucinated a claim that your were "saving any money when I rented", that exists only in your defective imagination:
* If you have the money to buy with a mortage, and rent instead, you are indeed not spending a cent on interest. That means that the money you would have spent on the interest of a mortage is still with you.
* If you don't have the money to buy, it is often because you can't afford to pay that interest, and that still means you are not spending a cent on interest, that "not spending" money you don't have does not mean you are saving it.
The fundamental point is that often 50% of a mortgage is interest payments, whether you can afford that or not.
If someone like you cannot afford to pay that much, that simply means that they are paid too little to save, for a house, or or a pension, or much anything else. Welcome to post-Reagan America!
“Most people who buy houses buy them to to LIVE in” is just “hand waving”? Why? Because it doesn’t help the lame-ass point you’re trying to make? Most people DO buy houses to live in, asshole. Is it also an investment? Sure. Especially in places like here in CA, where, like Jim said, it’s cheaper to buy than to rent. It just makes sense to buy, if you can (I can’t, but my girlfriend can). But we LIVE in these houses, dick.
«Most people who buy houses buy them to to LIVE in” is just “hand waving”? Why? Because it doesn’t help the lame-ass point you’re trying to make? Most people DO buy houses to live in, asshole.»
I apologize for not sharing your hallucination that people who rent houses dont't LIVE in the houses they rent, as in your fantasy it seems that the only way to LIVE in a house is to buy.
We are not discussing living in houses, but the potential financial upside and downside of owning vs. the lack of financial upside and downside of renting.
«<i>it’s cheaper to buy than to rent. It just makes sense to buy</i>»
It is cheaper also because buying unlike renting exposes the speculating owners to volatility, the downside in particular, so a number of potential buyers will rent to avoid exposure to that downside.
Every hand-waving argument by residential real estate speculators that I have discussed with soon became the argument that *both* buying should be cheaper than renting *and* that the downside should be paid for by renters (through bailouts when needed), while the upside should go entirely to the residential real estate speculators.
Head speculators and Wall Street win with booming prices and rents, tails and renters lose for making speculators and Wall Street whole.
Dude.... You’re a dickhead. For real, you’re a moron. There’s really nothing left to say. YOU are talking about “real estate speculation”; the rest of us are talking about,”It’d be nice to own a house without worrying about the next economic recession, when we will inevitably lose our jobs and the bank will foreclose on our mortgage.” Which will happen again. And again. And again. And the point you’re trying to make, that poor people should continue renting and never have a shot at owning their own house (in essence, poor people don’t “deserve” to own anything) just illustrates the disconnect between dickheads like you and the rest of the world.
This sounds like it was a budget issue ..maybe from loss of a job or other income source? A drop in the value of a home doesn't effect the mortgage payment on a fixed rate loan. It sucks if you need to relocate and have to sell at a loss or if a better rate is available and you can't refinance because of LTV requirements. It sounds like terrible timing if you weren't able to take advantage of the short sale options many people used post crash
Some one got adjusted out of their house? Or adjusted THEMSELVES out of their house? A shark sold someone a mortgage loan they can’t afford? Who borrows tens of thousands of dollars without a lawyer to review things, especially when they know what they don’t know?
Now don’t get me wrong. There were plenty of crooks in the housing bubble on Wall Street and in the mortgage brokering business. They should all be in jail. On the other hand, there were loads of people who knowingly took out liar loans and they should be in jail too. You never hear that though. Every borrower was a victim. Not true. It took two to tango. Three in this case - greedy Wall Street bankers, deceptive and dishonest brokers and lying or stupid borrowers.
None should be let off the hook and none should be pitied.
Who borrows thousands of dollars without a lawyer? EVERYBODY. I have purchased a dozen homes in my life and never, not once, has a lawyer talked to me about the type of financial vehicle financing the property.
«Who borrows thousands of dollars without a lawyer? EVERYBODY.»
Only the people who expect that the price of the collateral will balloon, so any problems will be paid for by the next buyer. If they are sure that the price will double in 10-15 years, why worry about the terms and conditions...
No, but I could have gotten any of my lawyers to weigh in on how I was financing. Of course, I never did anything but a bog simple 30y fixed, so...not much to say.
The average house price in the US in May 2020 was 284,600. Nearly 50% of home loans "use" PMI (as of 8/19 - it fluctuates, that's the latest I've seen).
No matter how cheap a lawyer is (or how good of an idea it is to run a serious contract like a note by one) - you can't honestly believe someone borrowing $250k, and unable to scrape together 50k for a down payment, is willingly going to spend $500/$1000 extra?
This isn't a comment on whether they SHOULD or not - just on actual behavior.
A number of states, like NY, Mass, NC, De. and others literally require that a buyer be represented by an attorney. Quite a large number of mortgage lenders insist on it even in states where it is not required.
You would not buy property without an inspection by a professional. If you do you could get something with problems and issues that would cost thousands to correct. Same with complex mortgages and terms of sale. Unless you know the "system" inside and out you would be well advised to consult with a financial professional or an attorney with real estate experience. Just like insurance. If you don't use it okay. But if you need it it is great to have.
Do you talk to lawyers before buying insurance? No you talk to an insurance broker. How about investments? A Stock Broker. Same with Mortgages, you talk to a Mortgage broker, they explain it. But they arent lawyers.
Elizabeth Warren on credit card agreements: "I taught contract law at Harvard University and I can't figure out some of the stuff that's in these agreements - and you expect a mother with 2 kids and an Associate's Degree to understand what it's all about?"
This bullshit of blaming the victim with the "they knew what they were getting into," or my personal favorite, "Hey, nobody forced them to sign that contract!" is tiresome.
Doodybag? Finance got $29 Trillion from the Fed in 2009, add a few trillion in QE, and another $9.7 T this year.
Why can’t the commons get enough love to live indoors and eat regularly?
I’m so Right Wing I’m flossing with steel wire, and paid my way my whole life. I also understand these people are criminally insane, and need to answer for it. If you invited these Financial Wizards to Dinner you’d have to count the spoons after...some WILL be missing.
Adverse outcomes?
Adversity and outcomes “on the way”...as we say in my trade.
Tell me how much the government lost...or earned...on bailouts to financial companies. We know that they lost money bailing out decrepit car companies in favor of the unions whose unsecured c,aims were elevated above secured claims.
No, what's really tiresome is that hose that complain loudest about "everyone with adverse outcomes in life" are the ones that benefit the most when government steps in to hold the doodybag.
No really. I agree with everything Matt said. There were also plenty of folks flipping houses and building decks, etc with easy money. Until there weren’t.
This isn't fair. People understand the cost of credit. They just get in situations where they feel they need it or worse so many businesses require a credit card to do anything. It's "not a mother with two kids and an associate's degree" that can't figure it out. That is a disparagement.
This is true. If you do not have a credit card/functional credit you will truly get raked over the coals. I’ll defend the payday loan places-you have to pay for convenience, but Rent to Own places would make a Jersey loan shark blanch in shame with their rates.
And that was the selling point. "There's not really any risk. Look at how prices are rising/have risen!"
Of course, once that ended, the buyers were under water w/ no recourse and the lenders had protected themselves with the "toxic asset tranches" in securities packages.
At least that's my understanding of the (observed) events.
But they are stupid and/or foolish to trust strangers. It isn't hard to find out the kind of loan you're signing up for. Sorry if you don't like that, but it's obviously true.
Yes, some people knowingly took out "liar loans," probably as a result of lying to themselves, or being convinced that real estate would keep on going up. We were offered one and turned it down. But you're ignoring most of the stories, people who were lied to, getting an ARM when they thought it was a normal mortgage (who can afford a lawyer in such a deal? Bit of privilege showing through, there.) Or who had an affordable mortgage until the whole economy was ripped out from under them - by Wall St., who suffered very little.
In 2008, Wall St., collectively, and a bunch of idiotic economists drove the economy into the ditch. They should all have been left to wait tables for a living, or worse. Some should be inn prison - still. but no, they were bailed out, which was hugely, passionately unpopular at the time. That was one of the big sources of the Tea Parties, for one example. So the whole thing was an exercise in corruption - by Obama's government.
Why is it that so many people ignore the genesis of the housing bubble came from governmental requirements that loans be made to people who couldn’t afford them under penalty of law? The banks who were threatened thst they could open new branches or acquire other banks unless they paid off liberal community organizers? The requirement that Fannie and Freddie make bad loans? The Congressmen who got sweet deals on their own loans to protect predatory lenders?
And if you can’t afford to buy a house without basic advice from a lawyer you probably can’t afford the house anyway. But you WANT it. I want a lot of things - when I was young I wanted to be a MLB right fielder. No one gave it to me. Is it unfair that I couldn’t get my desired occupation? Was I discriminated against?
The most important transaction in your life any some of you demand that a person be justified in relying upon a person on the other side of a commercial deal? Have you lost your minds? Should they be accompanied by the store manager of a grocery to ensure they buy the best deals on offer? Shall we hold McDonalds liable when fools eat their crap twice a day and get diabetes and heart disease?
When are people supposed to stand on their own feet and realize hat they are in over their heads in in such a fundamentally critical financial and life decision??
Here it is people, the most shopworn trope in the post 2008 conservative playbook: the poor widdle wenders were forced -- forced I tell you -- to throw away their underwriting standards and approve those loans, and even resort to fraud. They HAD to lend to the unworthy, or face jail! Because we all know that it's Congress who tells the financial services industry what to do and not the other way around...
I do not understand why you think the bankers tell the regulators what to do.
I work in the DoD and I know about regulatory capture, and the impact of bought congresspeople, but that isn't the same as a regulated industry telling the regulators to shove it and do what they want.
Let's say it were, though. Why are you so insistent on letting the politicians off here? They are certainly culpable.
I'm only insistent on calling bullshit on the charge that the Great Bubble and resulting financial crisis was due to lenders being forced to loan to people who otherwise wouldn't qualify.
As for letting politicians off the hook...no, they were the ones who dismantled the regulatory structure put in place by FDR to prevent chaos and occasional collapse in the financial services industry. Reagan to Clinton, so bipartisan scumbaggery. The question, though, is who is the dog and who is the tail? I think the evidence is clear that the industry is the big dog here. They called the shots on deregulation, as well as the bailout.
Well the CRA related loans - which is what you are talking about - were only 6% of the total, so even if they were higher risk (which some data supports), it only caused a small portion of the problem, which leaves a huge amount to be explained by other means.
With that straw man out of the way, the industry people didn't call the shots, the government people did. They thought it useful to kiss Wall Street's ass, but what is new about that? What would change in the future to make that NOT happen?
My answer is "nothing". Even if you overthrew the government, you'd have the same wealthy shitbags peddling the same crap in this putative new government. With everyone just as susceptible to the filthy lucre as last time.
Why is it that people think everything is an apples to apples comparison-- all neat and linear? Nothing about human behaviour is--ever. As a medical professional it is mind blowing that you think that there is a direct correlation between eating McDonalds and heart disease/diabetes. I have patients that eat similar diets and have none of those illnesses-- must be something else could cause those illnesses right?
You can't compare that to the fraud and corruption done by unregulated practices by banks and their "salespeople" who promise you will get "more cash flow", better rates etc. to unsophisticated buyers aided by levels of govt who ignore (or remove it - Glass Stegal) and look the other way not to jeopardize funding during election time. It is not even remotely comparative.
Thank god I live in a country where there are rules (and recourse for the home owner) about this kind of predatory "salesmanship". And yes we have real bank regulations as well. Banks are not total crap tables here. FYI-- Canadian real estate didn't implode, no bank failures and no bank bailouts-- all due to very basic regulations (Canadian banks do very well--$ billions well all around the world)
Funny my husband the fraud lawyer is dealing with a case where a big company is suing an insurance company for not providing Ponzi scheme insurance thought -- seriously -- and they are "sophisticated buyers" but lost millions of dollars so they get opportunity to get it back. Not the unsophisticated home owners who were lied to, not provided basic information about what they were buying and yet the "company" gets recourse. Nice system!
Your " boot strap" comparison is eye-rolling. The world and especially human behaviour is not that linear and direct --ever.
Well then, let’s get everyone assigned a government monitor to make sure that everything they thing they bargained for or are entitled to is delivered. But query, do the monitors get monitors?
I see both sides of this story, Rick. I am ok with losing my house, my business, almost everything I owned. I learned from it. It is a complex story, as Carol has pointed out. I wasn't over-leveraged. I had attorneys. At one point I just let it go, I'd been fighting collapse for over 2 years and realized, I'm not going to survive this because I'm focused on property, lifestyle and $ instead of my mental/physical health. I shrunk my lifestyle to nothing and started over. Here's the problem:
What have we taught major banks / Fintech when they don't get called on their bad bets? I've recovered, took 10 years and am in a better place. But nobody bailed me out. We have, essentially, two classes. One has a get out jail free card, the other does not.
The banking system needed to be bailed out because our entire financial and economic system depends on it. Many didn’t get bailouts. Wachovia, Merrill Lynch, Bear Stearns and Lehman. Those that survived had serious limitations placed upon them. And at the end of the day, the government and hence the people profited from it.
I’m interested to know the circumstances thst caused you to lose your house. Did you buy too much house? Take on too much debt? Use adjustable rate products?
I believe almost all mortgages made in Canada are "recourse" yes? That is the fundamental reason there wasn't a housing meltdown in Canada. Simply doing the same here in the states would end the threat of a repeat and take bad actors in the mortgage origination process and ignorant consumers off the table.
We do power of sale here- very few foreclosures. Our banking system is very very different than yours. Sorry-- former banking economist-- that's not why there wasn't a meltdown. We have very different holding percentage requirements for bank lending. Both OSFI and the federal Bank Act (banks are regulated by the federal government) have clear basic minimums. So the crap table lending and gambling you get in the US is not part of our system.
Remember your system is heavily private (including regulation)--ours is not-- if private banks want to operate in Canada they have very clear regulations they have to meet- then they get a piece of the pie . We used to have 5 big banks until 1980 when we let some international banks in HSBC, some American ones etc.
Canadian real estate values are being propped up by super cheap interest rates that are only good for 5 years and not locked in for 30 years like many of our American friends. The Bank of Canada has no plan to get back to "normal" market place derived interest rates and a market place mortgage rate is not 1.6%. So like a lot of things, Canada follows the USA about 10 or 15 years later. Most new mortgages are insured by CMHC which is our mighty Canadian government doing what the private sector doesn't want to do. So Canadian taxpayers will take it on the chin when this mess finally has to adjust to the realities of the market just as the US had to do post 2008. Good luck to all Canadians.
«almost all mortgages made in Canada are "recourse" yes? That is the fundamental reason there wasn't a housing meltdown in Canada. Simply doing the same here in the states would end the threat of a repeat»
All mortgages in the UK or Ireland (or Spain etc.) are "recourse" and there was a meltdown. What happened in the UK: the government ordered the mortgage lenders to avoid "recourse" because it was politically unacceptable, the speculative middle class would not accept mass repossesions. Some years after the 2008-2009 crash the BoE published a survey showing that 14% of all mortgages were still in "forbearance", and this caused quite a storm, so they stopped publishing such data.
“The Bank of England estimates that as much as 14% of all UK home loans are either delinquent or in some sort of forbearance process. Nobody really talks about this because nobody wants property prices to fall out of bed. Can we handle the truth?”
As in many other cases "recourse" is something that can only happen to a few middle class people, and then their neighbours think "losers", but it cannot happen to many middle class people because then they vote against it at election time. Individually the middle classes are powerless, but collectively they can swing elections, so they are powerful.
Cal, Tx and AZ are the biggest obviously and comprise a significant percentage of underlying loans in most MBS products. You might look up the HARP program that was created in 09 but expired in 18. That program I believe was the one that allowed short sales of properties with no further recourse to borrowers but not positive
In the past, and theoretically still, bankers and other corporate lenders were required, under penalty of law, to deal honestly, precisely because otherwise they had a license to steal. Which they now have, because they've bought off the cops.
Otherwise, ordinary people couldn't buy houses, or even cars, at all.
«Why is it that so many people ignore the genesis of the housing bubble came from governmental requirements that loans be made to people who couldn’t afford them under penalty of law? The banks who were threatened thst they could open new branches or acquire other banks unless they paid off liberal community organizers?»
Can you quote the word of any federal law as to that? The CRA as the name says requires nothing like that:
* examines state member banks to evaluate and rate their performance under the CRA;
* considers banks' CRA performance in context with other supervisory information when analyzing applications for mergers, acquisitions, and branch openings;»
I cannot see any requirement or threat there, never mind related to pay off "liberal community organizers". Is the Federal Reserve a far-left propaganda organization?
«The requirement that Fannie and Freddie make bad loans?»
Can you quote the text of any law that allows Fannie and Freddie to make loans to people, never mind bad ones? AFAIK Fannie and Freddie can only *buy* loans already made by banks and other mortgage lenders. It is up to the banks to make good or bad loans. The banks have however paid Congress to ensure that Fannie and Freddie and the Fed bail them out by buying the bad loans they made, and indeed the Fed has bought trillions of dollars of bad loans ("toxic assets") at "special friends of Congress" prices from the banks.
A 2010 WSJ article which speaks to HUD secretary requiring the two GSEs to hike Their purchase of subprime loans to 50% of the total. And forcing them to degrade lending standards.
Also REGULATORS, whose approval for mergers and branch openings were withheld unless they followed preferred lending guidelines, controlled that process. You want a law - look at other enabling statutes giving them broad authority to regulate mergers and branch openings.
You see, to love the regulatory state. Why demand specific statutes when broad grants of authority work like a charm?
If John Doe or Juan Perez or Laqueesha Brown or Hmong Tet etc can lose their house, then the Hedge funds, CITI and AIG can lose theirs. Paul Krugman can take his Nobel to the pawn shop, and the ratings agencies can go to jail. So can whoever blew it at the SEC.
The problem wasn't adverse outcomes, the problem is the adverse outcomes were 'unequal'. The criminal masterminds can go to jail, certainly mr. mozillo at Countrywide.
Now in truth history suggests that having avoided Jail, they'll now ride the Trumbrels.
Which explains the panic, stealing the election and all the rest.
You are not looking at a government of genuine thugs taking power, no.
We'd be better off under genuine thugs, they understand consequences.
You are looking at spoiled and usually old, privileged all their life over-promoted bourgeois criminals who are terrified, and every response and action, word demonstrates their terror.
They were of course never afraid of Trump, they were afraid of his voters, of a nation that would go against the elites.
How many years is Trump going to be the whipping boy of the unprincipled left? Let me remind you that some moron named Obama was President for 8 years and his “wingman” didn’t prosecute anyone. Bang on him for that. As to Wall Street, they heavily backed both Hillary and Biden over Trump. Hmmm. Wonder why Obama and a holder didn’t go after them?
Rick I was talking about 2008 in the first two paragraphs.
After that I talk about the present govt, Biden's.
The link between 2008 and 2021 being;
"Now in truth history suggests that having avoided Jail, they'll now ride the Trumbrels. Which explains the panic, stealing the election and all the rest."
I'm not leftist, as explained earlier I'm so right wing I floss with steel wire.
Trump was not blamed above by me.
He's gone, he tried, he failed. This govt can't be reformed.
These elites are quite beyond saving.
My only mention of Trump being they're afraid of the voters, and the nation.
I'm not principled at all about politics now, the Constitution is destroyed by counter-party treachery - I hold my Oath...abrogated by counterparty.
Now we can live in a country with oh..a few million, and a few million more like me...noticing the Capitol only stands because of Troops! Whee.
Actually...my Oath nullified... I'm FREE!! NIHLISM HERE WE COME !!
If you don't like government by train wreck neurotic criminals, lets try government by Condottieri ! WHEE !!
1. You need to know you should have a lawyer and then you need to be able to afford one.
2. Mortgages should NOT be so complex you need a lawyer.
3. Part of the problem here is that at the same time this crap was going on the same Wall Street firms were pushing for whole industries to be pushed overseas to China wiping out jobs.
4. The 30 yr mortgage as it is built today is a disaster waiting to happen. The days of working steadily for one or two firms for 30 yrs are gone. People today are going to have ups and downs in income and stretches of months without work as automation takes over. Even lawyers and doctors are soon going to be finding themselves at risk. Already seen a large loss of autonomy and drops in relative income for those professions and it is just going to get worse.
5. It took 2 to tango but the only ones left to suffer were the borrowers. The finance guys were too big to fail or jail as Holder told us. SO, half the dance pair got screwed while the other got richer. We could have just as easily given the money to the borrowers so they could then pay the banks. Oh....THAT would be a moral hazard.
Bottom line, with what is coming, the old way of thinking about the economy is gonna have to change. The reliance on stable incomes and economic growth to solve the issues of sheltering, feeding, educating and providing healthcare to a national population is just going to have to be rethought and that is going to have to include how we view the possession and application of capital. Aging populations. Gig work. Offshoring. Large scale automation whether in the form of robotic process automation or production automation, the decimation of brick and mortar for the internet, expert systems to replace lawyers and doctors, all these are going to massively disrupt the old order and make it much much harder to point to people and say that their circumstances are their own fault when in fact the environment they are coming out into has made their very existence unnecessary.
In our system, people are "human capital stock" or "consumers" or "taxpayers" but never citizens anymore. They are inputs to the economy, not valued simply for being human.
The point of all of our systems, government, law, capitalism etc. is to provide for the most number of people possible the best possible life. BUT..the system is broken and antiquated and it is failing to provide what it did in a different, less technologically advanced, time.
BUT..ultimately the PEOPLE are the WHOLE point. Capitalism for its own sake is a waste. Democracy for its own sake is useless. Democratic Capitalism that fails to provide for the needs of the nation is a failure.
If you can’t afford a lawyer, you can’t afford a house.
Mortgages need to be complex for lots of reasons. There are legal consequences to borrowing so much money on a recourse basis secured by your hime. This isn’t a simple process like most other purchases and moreover it represents the largest investment most people will make in life. Most people aren’t financially sophisticated. And loan products have gone from conforming loans to all sorts of options that are highly complex. You can’t simply outlaw all but confirming loans,
Outsourcing is not just a product of evil corporations outsourcing manufacture. It is also a product of government policy. China, the biggest beneficiary uses the equivalent of slave labor salaries to reduce costs. India too. And both countries pollute up the yang yang, but Obama and Biden foolishly allowed them to continue to,do,so,in the Paris accords. That’s just stupid and it reduces loads of costs.
On the other hand American companies are subject to huge and costly regulation, much of which are politically driven rather than otherwise. The left’s alliance with labor unions prevented them from aligning labor costs with competition, to a large degree. Here’s an interesting story - Pittsburgh Plate Glass (PPG) sought to keep their labor costs for legacy employees whole while creating a new tier for new hires. That resulted in a bitter 5 month strike thst still didn’t resolve the issue. Ultimately, the company thst invented modern plate glass and safety glass for cars exited the glass business, selling it to a Mexican company that was free of this kind of nonsense and hyper regulation. Now PLG Imdistriesmsells paints and costings instead.
The US under Clinton responded by granting China MFN status instead of hitting them with equalizing tariffs that would have kept the jobs here. Oh, and they also welcomed them into the WTO. Primarily fo dirty campaign contributions.
And they did that knowing that China was an economic bandit. Clinton had to know what the natural consequences of doing all this was, but he wanted the dirty money. And presidents come and go, but guys like Xi stay for decades. The first guy to call China out and impose realistic policies were banged by domestic political opponents because they want power - regardless of the effect upon the citizens.
And you wonder why any company would not export jobs to the lowest cost provider??
Heel we all do it ourselves. Why do you think that Walmart and then Amazon succeeded? Selling low cost Chinese goods for less, putting small business out of business. Walmart has 265 million people shop in their stores for a reason - Americans want lower costs, just like manufacturers. Amazon has 150 million shoppers and 100 million prime customers for a reason.
The result is while outsourcing labor hurts jobs, shoppers don’t give a shit because they shop on price just like manufacturers.
And how many people say, I’m buying American cars? I walked my dog today for two miles and counted the cars. 184 foreign cars, 71 US cars. Not so long ago, foreign cars were novel in the US. You’d see the VW bug a lot and a few other cars. Repair shops advertised “foreign cars” as a specialty. The first Honda in the early 70s was a shitty little tiny car a bit larger than the crazy Smart car. They and others grew massively. Why? Because they were cheaper at first. Quality came later. But you don’t hear about how the people buying these cars were hollowing out the US manufacturing base and causing massive job exporting.
Because the little guy is always a victim, he can’t be part of the problem,.....
The highs and lows that individuals may experience is a product of many things. But what would you do with mortgages to accommodate that? As a lender, I’d look at a person’s likelihood of job stability and decline offering mortgages to people most likely to have variable and unstable income. Thst is only business sense 101. But if they did thst, something tells me there’d be demonstrations in the streets.
And why is it the government’s job to provide food, healthcare, shelter, etc.? Why isn’t it a person’s individual responsibility to confirm their consumption to their reliable means? The central government was intended to be one of limited powers. And before the middle of last century, none of these things you see, to think are national responsibilities were performed by the Federal government. The growth of these federal programs created more need than they satisfied by telling people that they didn’t have to be primarily responsible for themselves. Now you have people who do the math and determine whether they get more pocket money from handout programs then by working. We have less needy people and more wanty people. And let’s not even get into the resulting devastation to the nuclear family unit thst these programs produced.
The people have become what they want to be. They want equity enforced regardless of effort. You are absolutely correct that the system is broken, but at the end of the day the citizens broke it. DeToquville said that America would lose its character when the citizens realized that they can be bribed by the government.
Now you have inter generational dependency. Not an accident - the left realized that if they are perceived as providing people with their needs and wants, they’ll get their votes. So they’ve kept millions captive in a soft form of slavery, dependent upon them for life’s essentials, trapping them in broken communities filled with violence, drugs and a low interest in education which would allow them to keep up with our changing technological economy and society. Funny how these technological ply challenged people all know how to use their smartphones and organized for more more more that they don’t earn.
Capitalism works when people don’t have socialist infrastructure to cripple them into dependents.
rick.. were you born retarded, or was it all that rotgut whisky and prozac? or are you just a psyop professional, gracing us all with your broken propaganda and anxious, buns up and kneeling, neoliberal boot licking?
Its it so sad-- you see it everywhere-- usually with virtue signalling and self righteous commentary. " I am doing well so I can kick those that didn't do what I did" " I am in the group I don't want this person in, because I won't be special (ie house owner)anymore" Cringe worthy. Standard insecurity and what fuels xenophobia.
It is the worst human trait. I want everyone to do well. I believe everyone deserves opportunity and equal access. What I don't believe in is predatory "salesman" taking advantage of people -- that is where some minimal regulations can come in-- like a cool off period etc . So that 79 yr olds don't get burned, so that undereducated dont get burned.
Rick does have a point, though. The 2008 crisis was exasperated in the legislature where regulations were modified or amended. Many of the loan agents were performing clerical duties, ignorant of the dire consequences. Yes, there were also those that knew it would end up badly for some, but the real culprits were on Wall Street where the risky loans were packaged in derivatives and CDSs and sold to the nearest sucker. The Tarp agreement ensured that the taxpayers bailed them out while the financial executives issued themselves obscene bonuses to add insult to injury. The Obama administration effectively endorsed the agreement by failing to go after the culprits even though Senator Carl Levin's subcommittee on investigations had uncovered considerable evidence toward indictments. https://www.hsgac.senate.gov/imo/media/doc/Financial_Crisis/FinancialCrisisReport.pdf
Actually, as I've read more of Rick's posts, I can see he does NOT hold the lenders, and their governmental non-regulators blameless. He just points out that a LOT of the people who got "hurt" could have seen this was bullshit and avoided their exposure to greater risk than they could afford.
I have posted one anecdotal case where a young black guy called bullshit on a Countrywide offer ON GENERAL PRINCIPLES. And lo, he was not harmed by the crash.
That said, I also see your compassion for those victimized. You guys are both saying "It's not a binary situation!" and then kind of pretending the other is saying that it is. It IS possible for people to be partially blameless and partially responsible for their own bad outcomes. It IS possible that financial institutions were presented with bad incentives by government. It IS possible that politicians looked at positive (for them) outcomes of actions that were going to cause disaster.
I can see both of your rhetorical 'houses', and I'm looking for some pox.
Just look at it pragmatically, though. From the point of view of the new home buyer, even fully assuming that the bank is totally greedy and self serving, why would they approve a loan that they expect to default? They want to make money, so giving a loan to someone who can't afford it would make no sense.
What these home buyers were missing, is that the people making the loans were handing them off as quickly as possible, so they wouldn't be left holding the bag. They repackaged all of these loans into CDOs and sold them off to other suckers. They got their profits and got out before the loans blew up. I suspect that if the people who made the loans had been forced to hold onto them, this whole thing would have looked very different.
It doesn’t take a lot of losses in a financial crisis to sink a lender. Look at JP Morgan Chase. Their tier 1 capital is 11%. That’s much higher than typical capital ratios were in 2008. This, it doesn’t take a very high percentage of loan losses to sink a bank.
That’s why I get a kick out of only 6% of loans were CRA loans. That’s more than enough to sink a bank. Private label mortgage CDOs didn’t start out as subprime generators. They were just competition for Fannie and Freddie. They used the Fannie Freddie lending standards - hence the term “conforming loans”. That made them marketable and fairly highly rated by credit agencies.
The politicians led the race to the bottom by mandating Fannie and Freddie take huge amounts of crappy loans.
Between 2005 and 2007, they acquired few conventional, fixed-interest loans with 20% down. They loaded up on subprime, interest-only, or negative amortization mortgages—loans more typical of banks and unregulated mortgage brokers.
Fannie and Freddie made things worse by their use of derivatives to hedge the interest-rate risk of their portfolios. But as private-sector companies with shareholders to please, they were doing this to remain competitive with other banks. They were all doing the same thing.
Fannie Mae's loan acquisitions were:
62% negative amortization
84% interest-only
58% subprime
62% required less than 10% downpayment
Freddie Mac's loans were even more risky, consisting of:
72% negative amortization
97% interest-only
67% subprime
68% required less than 10% downpayment
These exotic and subprime mortgages made Fannie and Freddie's loan acquisitions toxic.
All this can be placed at the door of politicians like Chris Dodd, Barney Frank and George Bush. Bush mindlessly pushed home ownership. Dodd and Frank - who lost their seats due their complicity in sinking the two GSEs - fought any kind of oversight about the obvious risks that had even become apparent to Bush who asked for tighter oversight of them 17,times only to be rebuffed by a Democrat congress and senate. 17 times.
It is not an oversimplification to state that this financial crisis began, both in time frame and economic ripple effect with the Freddie Mac/Fannie Mae collapse and subsequent bailouts. In fact, AIG, a former blue-chip giant that became 89% publicly-owned after its bailout, still had many highly profitable divisions. Unfortunately, AIG was heavily involved in the insuring of sub-prime mortgage packages- mortgages that were underwritten in large part by Fannie and Freddie.
The left - the media and the Obama administration conveniently forgot that these Government Sponsored Enterprises were run by Democrats- among them Franklin Raines, Jim Johnson, and Jamie Gorelick- all high-ranking members of the Clinton administration. Gorelick had zero banking or housing experience. It was a rich sinecure. People forget that Killer Cuomo, of nursing home virus fame - was the hammer who forced Fannie and Freddie to ramp up making crappy loans.
Even after investigations brought to light bad accounting practices and manipulations of the books of Fannie Mae, prominent Democrats such as Barney Frank, Chris Dodd, Maxine Waters, current Majority Leader Chuck Schumer, and Clay Lacy claimed loudly that there was nothing to worry about- that Fannie and Freddie would be just fine!
This was the context in which the banks jumped in the same way. They started out competing on conforming loans with private label CDOs and traveled down the quality chain in sync with the government.
Sure, there were brokers who knew they were making shit loans and many Wall Streeters off,laced them quickly.
Yes, I completely agree that's what you said. I'm just saying that none of your follow up comment appears to back that claim up. Maybe you didn't mean it to, but then I'm not quite sure why you replied to my comment with something unrelated to it.
I guess I was also replying to the yippers and yappers who treat borrowers as per se victims and the government and business as per se victimizers.
And also how many banks who actually held loans - many performing well, but were under water on a LTV basis because of the economic disruption (most of which have recovered) were forced by the government to sell these performing loans into an artificially depressed market. I know of several banks thst were healthy and performing as such which were forced into TARP as a result of government forced sales.
And as to borrowers being uneducated, it’s really a product of a decayed educational system, where people graduate with great egalitarian values, are greenwise and socially conscious, but actually know very little because the subjects of the oppressors - math, science, a good vocabulary and an appreciation of the arts and sciences are pushed into the background. So they are far less capable of dealing with the increasingly complicated and advanced society of those who came before them.
I bet maybe 10% or so do it old school and those are the people we have advancing the ball now. I promise you they understand mortgages. The problem for the world is that the other 90% believe they know far more than they do about how the world works if it is to succeed, but they are absolutely and militantly willing to question what they do know. Unfortunately for the rest of us, we have to run into these 90% and they vote as well, based upon their defective leftist university experience.
Just two additional points: a) 95% of homebuyers are not aware of how the mortgage lending 'system' works; and, b) we the Taxpayers are the ones who have repeatedly, bailed out the Gennie May and Freddie Mac because our 'representatives' claim they are too large to fail. The American Middle Class gets it from both sides thanks t Congress and its cronies. By the way, have you seen the 12 foot, razor wire topped, gun toting military protected fence/wall Nancy Pelosi has had built around the entirety of our Capitol Hill? There is a reason for this.
«have you seen the 12 foot, razor wire topped, gun toting military protected fence/wall Nancy Pelosi has had built around the entirety of our Capitol Hill? There is a reason for this.»
“At the vote confirming Brett Kavanaugh to the U.S. Supreme Court on Oct. 6, woman after woman screamed out in protest from the Senate gallery and was carried away by guards. [...] People were pounding in outrage on the closed entrance to the Senate floor. [...] U.S. Capitol Police said a total of 164 people were arrested that day for “crowding, obstructing, or incommoding.” [...] The depth of opposition to Kavanaugh was revealed when on Oct. 4 over a thousand people from throughout the country, mostly women, demonstrated on Capitol Hill. [...] At the Senate Hart Office Building, crowds saying “NO” to sexual assault and to the reactionary agenda that Kavanaugh represents flooded the atrium and every floor. Over 300 chanting, militant protesters were arrested that day. [...] There were too many acts of indignation and outrage at Kavanaugh’s nomination to list them all. [...] Outrage against Kavanaugh broke out initially on July 9 at the Supreme Court on Capitol Hill [...] During Senate Judiciary Committee hearings the first week in September, over 227 demonstrators were arrested.”
““Trump is one of two people - Bin Laden is the other - to have orchestrated a violent attack on the US Capitol Building in the last twenty years. (The Capitol Building is believed to have been Flight 93's target.) Both were acts of war against the United States, although Bin Laden's was a foreign attack and Trump's a domestic one. Trump's attack not only came closer to success - they actually breached the building - but aimed to do far more to destroy our institutions and way of life. Bin Laden's was a raid, meant to terrorize and provoke a response that would feed further escalation of ongoing global conflicts. Trump's was meant to decapitate the legislative branch, with accompanying mass murder and hostage-taking, and to put a permanent end to democratic (small-d) governance in the United States.”
There is something wrong with your software that this stupid comment gets put on top just because a lot of people comment about how stupid it is. Can this be fixed as it seems to me it just foments stupidity and controversy.
Or, you could note the content of the top post, realize what the many replies are likely to be, and move on. A touch of entitlement in demanding that it "be fixed" because you are very slightly inconvenienced.
It was a frenzy of flipping houses too. Everyone wasn’t mortgaging the family home. At one point, a house would go on the market, sell immediately and within weeks be back on the market with no improvements but ten thousands of dollars higher.
It was that and more. People would use their homes to cash out on bubble equity to pay off credit cards (only to run them up again), to put in desperately needed swimming pools and other additions, and more. People were attracted by initials teaser rates and were too stupid to see the cliff they were headed towards a year or two down the road. Others just always wanted a home and were blinded by that want to not look to close. We got the house!!!! There were clearly people who HAD to know better - thousands and thousands of people who were paying no income tax and were getting refunds of the earned income tax credit bought houses with these loans. How in the world did they ever think that they could manage a mortgage?
I really think, despite some formidable posting, you have missed some basics - let me give you the view of a 10+ year corporate collections experience - including GC Services (owned by a family tight with the bushies - and as such a principle industry consultant in drafting the Fair Debt Collections Practices Act in the waining days of Jimmers Carter)
It wasn't a 'housing crises' or bubble - it was a CREDIT CRISES - AND - further - despite my limited experience on the 'goon squad' - I have been mentored by an Uncle who was a second generation Cleveland Banker - who BELIEVED in the kind of investment banking that you seem to believe still exists - when it no longer does.
Credit and credit availability - a recipe concocted via the worship of the libertarian right - from resurrected Ayn Randers to the Milton Friedman post 'free to be/sell me this pencil' influential crowd - to the globalization of central banking - so much so that between the rough parameters of the FDCPA ('78) - and the Reagan years when financial deregulation promoted the reinvigoration of American Capitalism ( and the initial rise of Trump the entrepreneur) - an entire generation grew up with loose - widely available and cheap - credit.
This loose credit built the current edifice REX - a second gilded age in America - extreme wealth - and - the (seemingly) ending of the once great majority striving because of wide opportunities [you Rick imply still widely exists - while MT and his readers here - myself included -disagree emphatically ] ...MIDDLE CLASS - of which -as anyone in collections can tell you - whether they have encountered American Express's BLUE BOX VALUES or not - there is an easily recognized and likewise understood pattern when debtors default - IE - by the choices they make.
1st - low hanging dying fruit - like the sears card or the gas card.
2nd - cell phone or land line...
Orchard credit - then Discover - THEN MASTERCARD/VISA MBNA ECT
LAST - AMERICAN EXPRESS (ALAS)
THEN THE AUTO...
AND LAST BUT NOT LEAST - WHAT USED TO BE THE BEADROCK - ESPECIALLY SINCE FANNIE AND FREDDIE AND A FELLOW BY THE NAME OF Petie Lynch MERGED THE OBSESSION FROM BUSH THE FATHER ON DOWN TO THE CLINTON GLOBAL CRIME FAMILY TO LITTLE SHRUB THE KING OF TEXAS TO OBUMMER TO THE GREAT DISRUPTER AND NOW THE BIDEN CRIME FAMILY ALA OBUMMERS 3RD TERM.
Namely - that home ownership was the key to middle class wealth creation and financial and hence family stability - and clearly Rick you still believe it.
I don't. I don't in part because what Lynch sold was the Mutual fund - and - that owning a home was crucial to the new means of pensioning for middle class America - the 401K - which was supposed to be the win win in American Investment banking - except - ooopsi - that was a crock.
It was sure good for Pettie and his crowd, now wasn't it? Isn't kinda neat the way those two just fit like frick and fartie frack?
The 401K was great for the EDUCATED MANAGERIAL CLASS - and a disaster in comparison with the former defined pension - that was widespread in the whispy by gone days prior to the Savings and Loan crisis in the 80's (and some of the postings on that here - pinning for Glass/Stegall & a Volker rule that never really existed in the first place)- that later bled into the Stock Market crazied Tech era and eventually - once the Techie thing landed and dust settled - the real estate fiasco.
[and is still available in the Government Unions and the Teachers to Boot - who barely teach a thing about actual capitalism - but get the DEFINED PENSION TO DO THE KNOW-NADA]
Loose credit masked declining incomes - and the beauty of it was exponential (and you still SEEM to buy the 'morality argument') - which in turn led to the debt bondage that - like 19th century WASPS viewed as self-induced drunken and libertine self-destructive behavior of the Irish - was now in the 21st 'living beyond their means' - and monetized the screw job after screw job while the hoopleheads just 'keep digging.'
Go back and look at the crushing commodities market (before price supports - a 'New Deal' anachronism the Kochs and Austrian School cool kids have been trying to shutter for decades now - just as they have Social Security via privitization) - and the Gold Vs 'free Silver' political fights - and the toxic views on immigration - and so much more and Today it is Big Tech the global Party of Davos not the Monopolies of Standard Oil or the Railroads.
And I know this is simplistic but bear with me. I believe in capitalism - but with rules Rick.
We are not living through some minor bumps in the road - or some metaphorical 'hair on the wall' hiccups - Taibbi's been on this a long time and it's part of why I'm hooked as a fan boy- he is so much more right than wrong.
MT as a writer sides with those I once viewed as harshly and as cynically as it seems you do - but that was over fifteen years ago - when it was still a literal gold rush in the collections field - and why was it a gold rush - because the credit was still flowing - and now it cant.
American Investment Banking didn't 'blow itself up' in 2008 and we haven't just been screwed by Dodd & Frank and ect - that is really simplistic Rick - and wrong.
American Investment Banking sold us out BECAUSE IT WAS JUST TO *&^(iNG tasty to play Jack Sparrow and go 'a Pirating' the world over {especially with all that money the statist 'hybrid' Chinese were throwing at them - in the loose money world the west created }- making the de-industrialization of America - the ending of widespread opportunity for the next generation - all of it -a deliberate orgy of greed and nothing new - except in scope.
Both parties - until Trump ripped the scab off the great fantasia. Leaving both sides desperate to off him and the populism he recognized and road.
Global financialization is in most respects globally designed and led BY AMERICA - BUT NOT MY AMERICA - it is only now that - since 2008 - an awakened American populism - from the right and the left - just as it did in the late 19th century - has awakened to the threat it poses to both financial and personal freedom.
It's awakened for the same reasons it did before - even if this time its not about child labor and choking on coal dust or brain rot from mercury or lead. Americans do not decline gracefully or willingly - despite such erudite directions from the Kennedy School over Gov or even the Hoover Institute clowns in the Journalism department.
Americans fight back. But first they had to figure out WHO was SCREWING THEM, and how.
The middle class has seriously shrink, betrayed by the left, its so-called protector. The left uses its protectees very much like the coward who puts a woman or child in front of them as a shield from his opposing gunman. They really never cared about the middle class, women, blacks, browns etc. these groups were simply useful tools to a political end.
Globalism is the biggest reason why so many middle class jobs have gone overseas. One is a quirk of fate - only our industrial base wasn’t flattened in WWII. Most of the others had to rebuild from the ground up and did so with modern processes and equipment. More importantly was that Clinton sold out industrial America for dirty campaign money and in exchange, gave a corrupt China MFN status and admitted them to the WTO. He knew they used poverty and slave labor as a trade weapon, that they polluted massively and that they manipulated their currency. He betrayed the middle class. Just as he did in repealing Glass Steagel, making the financial sector a ticking time bomb.
Jobs were exported as a result of lower cost opportunities in China and India. It didn’t have to happen - equalizing tariffs could have legitimately been put in place to take into account their slave labor pay rates and heavy pollution. We didn’t HAVE to over regulate like Big Brother making it unappetizing to do business here. We didn’t HAVE to maintain business income tax rates that were so uncompetitive. The whole tax industry of transfer pricing - shifting revenue overseas - exists only because we have been uncompetitive here.
That is what killed the middle class - a purposeful decision to become incompetitive.
Pensions? I don’t blame business a whit in shifting the investment decisions and risk by shifting to a defined contribution plan from a defined benefit plan. It makes sense to insulate a business from the vagaries of the stock market. That’s not their business. Fort hose who haven’t, they tend to suffer under the unfounded liabilities - government plans being exhibit A.
The family unit? Sure having a HOME helps. But not necessarily a house. It’s about a mom and dad, with at least one of them working and setting an example to children as well as providing discipline in its many aspects. That was destroyed by the left with LBJ and his great society where people were encouraged to become dependent rather then remain independent, to break family units apart because they get paid more with more babies and no man in the house, and by inviting more dependent people from our southern border to cross freely, importing more dependents who will vote for them.
I just got this a you sent it in my inbox because I'm on Am Great - adore VDH - a national treasure (been hooked since 1st reading Mexifornia in '04 or abouts - and I live in AZ). Also - CONRAD BLACK is my boy.
The bank has a fiduciary duty to loan insured deposits to good credit risks. Part of performing this duty is to bring some skepticism when evaluating loan applications. It's the market's job to make people want things we can't afford. It's the bank's job to say f**k no.
When we bought our home in 2003, we chose to buy a home on the less expensive side, even though we “could have qualified for a home worth double that with YOUR incomes” said our bank loan officer at our credit union... We chose a 15 year note, paid it off in 12 years, and are happily retired, early. But people aren’t taught basic financial information in school and often, not at home while growing up either.
I always know that the person opposing my views has acknowledged loss when the wheel out the leftist lingo such as “trope”. I’m just surprised Yu didn’t use “dog whistle” or “gaslight”. Soon you will begin to repeat “equity” ad nauseam
As my mother said to me one time after making an unwise investment, “The nice lady at the bank...”. This is a question of trust, not “stupid borrowers.”
On point with this article, the financial and political elites have no clue how much average Americans of all backgrounds were affected by the 2008 crash, and now it's happening again and worse for millions of people during the pandemic. Your line about bailing out banks, but letting restaurants fail, captures perfectly the orientation elites have: top-down, and themselves first.
Once again, you are "dead on" Matt. I am a small town lawyer in Central Florida. The grief, mayhem, disaster and insults I have seen heaped on the hapless (former) Middle Class by the banksters, mortgage brokers, mortgage companies, crooked appraisers, and many others over the past ten years makes me want to cry. All this was aided and abetted by our so-called "representatives" in Congress. I could go on for hours, with stories such as you have related, and worse. But to what end? Nobody is punished, nobody goes to jail, a few laughable fines are handed out and no wrongdoing admitted. May I remind all that, while the Mortgage Bankers Association in Washington, DC was scolding and whining about immoral homeowners who just walked away from mortgages they could no longer afford to pay in the 2007-2009 subprime mortgage meltdown, the Mortgage bankers Association proceeded to do just that with respect to the financing on its newly completed taj mahal headquarters in DC. Such hypocrites. Oh, and by the way, all the same things are happening all over again, even as I write this.
It's like sending people credit cards in the mail, telling them they are so easy to use, only have to make minimum payments, then telling Congress it needs to make credit card debt non-dischargeable in bankruptcy because those who sent them out are being hurt by delinquencies. Same with signing up folks for credit card when they shop--give a one time 10% discount if they'll take one. Same w/college loans.
INCREDIBLY astute UGA Olditimer, but you missed one part in the scam set up by the banksters and their buddies in Congress, and it is this: make the interest on Home Equity ["HELOC"] loans tax deductible and then go out and market these to the folks drowning in the debt you promoted as a way to "tap the equity in your home and consolidate/pay off all of credit card debt". Voila unsecured debt, formerly dischargeable in Bankruptcy, now becomes debt secured by the roof over the Debtors' heads. When the economy went south, then the poor shmucks (and their their children) lost their homes to the banks in foreclosure. Post foreclosure, these homes were then sold to 'special investment vehicles' set up by the banksters and their Congressmen buddies who promoted reckless credit card spending, promoted the HELOCS, and then foreclosed on these HELOCS, as (wait for it) rental income investments. A "three bagger" as they call it in the sports world. All this is "God's Work" according the the Hedge Fund owners. I would love to have had these these folks doing "God's Work" (self proclaimed) in my car as my wife and I drove through Kissimmee, Florida past derelict motels stuffed with dispossessed families with their children lined up outside waiting for the school bus. Financial crimes have consequences and I saw them, in spades, with my 'own lying eyes' as the saying goes.
New York magazine is a rag for yuppies, and yes they still exist. The only thing they are good at is gauging the sentiment of a small set east of 9th Ave.
Putting on progressive clothing is one of the silliest gambits I've ever seen establishmentarians pull. And if you needed any more evidence that the Democrats are now the party of the establishment and Wall Street, it was the portrayal of WSB as a Trumpist movement.
Levitz is usually pretty excellent. This is a serious miss for him. I think reporters never leaving their house due to pandemic and being in the Twitter bubble is seriously distorting their perspective of reality (I think Matt was falling victim to this for awhile).
LOL!!! so true-- even their what's on section SUCKS and I used to read it before visiting friends in NYC few times a year. Used to read James Chait (?) but nothing in the last 5 plus years has been any good. Kind of a People magazine for the very superficial
NY Mag's long reads, although aligned with the concerns of anxious yuppies, are often pretty excellent. I'm in the middle of this horrifying report, which speaks to the dreadful consequences of lockdowns on children. Seems an issue that is important to you - take a look if you can stomach it (I say all of this with sincerity)
Thanks for the suggestion. 💗 I am a bit boring about medical things-- I go with my professional sources and my patients experiences here in Canada. Even lockdowns aren't comparable-- people are too different in their reactions to it and the supports provided are different in different countries and even within each country. On top of that I am crazy busy these days dealing with the mental health issues and keeping up on reading JAMA etc. pieces coming out about the uselessness of masks etc. There is too much MSM reporting on things they haven't a clue about and are too lazy to go beyond official narrative sources.
Thank you for this. I would be interested in checking out some of the articles you mention about uselessness of masks. A friend's husband got Covid very bad; they live in a small 1BR apartment and were unable to quarantine; and my friend never got Covid nor does he have antibodies. For some reason that deeply disturbs me. (BTW I think Covid is real)
What a terrific pair of articles. I know now about the situation from 30 minutes of testing this Substack then a week of looking at financial pubs and sites. There's a reckoning underway. Americans are a savvy and brave and reckless bunch, and even if you don't believe in the deep state, the actions of the entrenched are really pissing people off. The sandwich shop analogy was spot on, and we all eat sandwiches.
Great reply, Matt. The mainstream media is just plain terrified. They have children in private schools, mortgages on their houses in Montclair and Pelham Manor - and perhaps are even more terrified for their egos. What if they don't get invited to the correct parties? They all know (even if the don't admit it to themselves) they could be the next one cancelled for wrong-think. So their defense is to scramble around and try to be on the winning side. Welcome to totalitarianism.
Excellent points Polly! I would expand that group of MSM to include the large institutional administrators-- they are 24/7 fund raisers for their behemoths and get paid 7 figures (with bonuses) to do so-- their educational or health admin functions are a distant second concern. They become institutionalized apparatchiks to whatever governing bodies/govts regulate/control them.
In 2007 I got out of the stock market. I told my brokers, "Only triple A rated treasuries ands munis for me." One day my New York bankers put me into their AAA rate MBS at face value and then devalued them to basically 0. I was broke. The Gov't stepped in and settle the legal battles at less that 1c on the dollar. Multiple my case by millions of investors, pension funds and savers. Under Reagan 1200 bankers went to jail for the S&L crises. 0 under Obama.
So I did another startup, built it up, sold out, and went into rental housing for a retirement business. Then Covid, and the eviction moratorium. All my tenants lost their jobs but we worked it out after a few months. We worked together. Only two simply refused to pay rent any more -- the two who didn't lose their jobs, they eventually moved out, moved in friends, in one case to use the house as a dog kennel, completely trashing it. I was helpless to do anything. The rent moratoriums started in April. They won't end until next September... In NYC a third of tenants are behind. 20 million households in America. There is a piper yet to be paid.
All of this because of lockdowns that even the WHO now says were ineffective.
There is a lot of anger out there from conservatives like me, from small business people, and from people like my tenants. We don't give a fuck what pronoun you want to be called by but we do care about fairness. We are tired of playing by the rules, working hard, being successful and having it all stolen.
Yes the piper has yet to be paid. Agreed-- call it the Fairness Coalition. Ironically this COVID BS is exposing the fallacy between right and left issues-- there are none-- here are only HUMAN issues, values and principles. I am starting to see these coalitions here in Canada. They are growing. BTW-- thanks I forgot the Reagan put the S&L people in jail.
Of course, a huge role in this crime against population has St. Obama and his equally disgusting Wall Streeter Eric Holder. The general population is still not aware about the extent of Obama's "Hope and Change" fraud
-- from "Banks are too big to fail",
-- to the scam of the century -- Russia-gate hoax that still continues with the lying team back in power
-- to Venezuela as an existential threat to the US “Venezuela is fundamental threat to USA” -- declared Obama formally initiating regime change.
What despicable Obama and DNC+GOP oligarchs meant is -- “Socialism is a threat to capitalism”… hence imperial War-party endless wars -- against “godless” Bolivia, Nicaragua, Venezuela, Syria, Cuba, Libya, China…..
Wars are immensely profitable for leaders and donors of both wings of the US War Party.
US "99%" population is to milked, controlled, keep silent by censorship and distracted by "gay and abortion wars"...
The most dangerous group in the country is marxists. The second most dangerous group is libertarians.
The first group is dangerous because its constituents somehow fancy that a large public bureaucracy will somehow facilitate public financing for the benefit of the many or outright control industry for the benefit of the many, even as all evidence points that politicians are selfish scumbags that almost never do the right thing, in any country and in any environment. The Marxist will screech BS, that this time it will be different, somehow the centralized bureaucracy will be kept in check and will somehow act for the greater good. You can point to the current state of affairs and show that every bureaucrat is paid off, and almost every regulatory body, including the ones governing higher education (the pinnacle of left wing thought), exercises it’s power for the benefit of the regulated or those facilitating the regulations. Magically, somehow, if we get rid of capitalism, the sociopaths who are drawn to these positions of power will vanish, and benevolent Christ like figures will run the government.
On the other side of the spectrum, is an almost as odious group of cretins: libertarians. For these cartoon characters, the United States doesn’t have a history before WWII. A naive population was manipulated by foolish or evil politicians to accept big government as a substitute for the benefits of regulation. Any argument that points out that if a society permits stratospheric wealth concentration will inevitably lead to extreme corruption is met with with the tired, tried and trite response that “oh you see, if the government wasn’t big, capitalists wouldn’t have to pay off the regulators to gain unfair advantage.” On this point, I’ll give the devil his due: the Marxist will accurately point out that this is ludicrous, flying in the face of history, and that government doesn’t grow or get captured as a result of misguided public perception, but with careful construction by the capitalist (really, fascist) oligarchy. The libertarian forgets that every single US state, including the slave holding south, prohibited formation of corporate entities UNLESS the state legislature approved it and the corporate charter EXPRESSLY stated how, in exchange for limited liability, the entity would act in the public good. This rule was in place because if you grant limited liability without a countervailing balance, there is no free market because there is no market without consequence for every negative action. The libertarian forgets that when the robber barons paid off almost all of the states to get rid of this regulation, the problems first emerged: enormous crimes, huge environmental consequences (see Montana and the copper king), etc. The libertarian ignores that pre-Marxist scholars indicated that the modern corporation marks the end of capitalism because there is no limited liability in capitalism. The libertarian forgets that once the corporation ends the free market by enabling the privatization of gains and socialization of losses, even a bare bones government is going to be compromised. The Copper King bribed his way to the US senate by paying off the entire Montana legislature, which in turn ended the election of US Senators by state legislature (I single this guy out, but he isn’t close to other evil bastards of the first fascist oligarchy that took over the country). The libertarian forgets that it was the super rich bankers that paid off Congress to enact the Federal Reserve, which in turn spawned undo credit, which in turn lead to two world wars and a Great Depression. For the libertarian, history begins in the 1930s and 40s, when Americans, not quite sure how they were getting screwed beyond belief, demanded a check to this madness and the era of big government began.
Of course, neither the Marxist or the Libertarians want to get to the heart of the matter. Marxists don’t want to get to the heart of the matter because their real motive is replacing the fascist capitalist oligarchy with a “benign,” “caring,” and “socially conscious” Ivy League educated bureaucracy, you know, like tenured boomer professors that constantly advocate for self sacrifice and what not, as they pillage the public treasury with guaranteed student loans, etc. Most libertarians don’t want to get to the heart of the matter either because to them the only thing that matters is not taxing capital because the only thing that matters is capital; for instance, a pornographer (nothing wrong with porn, just laughing at the right wing association) making a million dollars a year from a website should absolutely be taxed at a far lower rate than a pediatric neurosurgeon making the same because the former is a job creator who takes risk and the latter is just a unit of labor (market value be damned at the end of the day).
And with this long winded rant I arrive at what is the heart of the matter: any collectivist entity that has the capacity to externalize its costs must be heavily, heavily constrained by another force. This country’s sin is the distinction between private and public. The distinction is between individual and collective. A government can externalize its cost and tyrannize. A corporation can do the same. In both instances, the social science is clear: sociopaths are attracted to these entities because it allows them to get wealth, power and prestige without accountability to laws or markets.
The US constitution did a great job constraining government (for a while). A second document similarly constraining private legal entities should be drafted and executed. Oh, you don’t want constraints because, gasp, free market? Fine, set up shop as a sole proprietorship, like businesses did between 1776 and the mid nineteenth century. What’s that you say? That’s not practical? My reply to that is something that starts with “F” and ends with “U.”
And, may I ask, who facilitated the increased size of the state? The first radical expansion in federal authority happened at the behest of and was subsidized by John Rockefeller (ICC). The Federal Reserve was financed and facilitated by bankers.
It’s the same thing with you fellows, living an idealized world where the vices of the wealthy extend no further than rational greed, provided we leave them alone, when a plain look at history reveals the contrary: the super wealthy want total control and power, no different than politicians. When the wealth aggregates as it has done today, they usually achieve their end and society crashes.
But yeah, the state is growing not because of billionaire cretins financing its expansion, but because stupid proles that vote the wrong way... sarcasm off.
I don’t understand Marx in the way I don’t understand libertarianism, and the associated smugness of both groups ignoring how something looks in practice , rather than theory. Everywhere it’s been tried, it’s failed. The reason is that to accomplish the goals of Marxism requires a large collectivist entity, eg a huge government, to redistribute resources. The people attracted to such entities are always and without exception the worst humanity has to offer. You can rant on some theoretical diatribe on how it will be different, but it’s going to be the same thing: those who seize the power to redistribute will redistribute for their own benefit.
When I say you don't know the first thing about Marx, it means you don't know the first thing. The end goal of Marx is to abolish the State. As for the administration, it can fluctuate according to the circumstances. China has a huge economic success, lifting millions of people out of poverty, something ignorants like you scoffed at being even possible. They took means that didn't come out of Stalin's book so you got caught by surprise.
As for the notion of « those who seize power », it depends on how much the people are implicated in that. But it's clear it's too complicated for you. And it's no wonder. You don't have enough sense to learn about things before commenting on them
When you say I don't understand Marxism, you pull the statement right out of your rear end, like other Marxists.
"The end goal of Marx is to abolish the State."
Really? Wow. Milton Friedman also advocated abolition of the state or its minimization to such an extent so as to be completely ineffectual. In reality, IN PRACTICE, what happens is that those that accumulate the wealth, purchase or resurrect the state and subsequently expand it for their own benefit. Oh of course, if you point this undeniable fact to them, supported by the last 150 years of history, they will also argue that "you really dont understand capitalism, we didnt go far enough, we didnt gut enough." Its stunning to me how so alike the two groups are, despite professing vehement disagreement.
"You don't have enough sense to learn about things before commenting on them."
I could point to the litany of historical examples, including but not limited to North Korea, the USSR, and yes, even China (more on this later). You aren't going to care. You are going to tell me that isn't Marxism, we didn't go far enough, we didn't do enough, etc. Or, alternatively, in more brazen situations, you'll identify one singular thing those societies accomplished that was better than post WWII America, ignoring the other parade of horribles, and just state its better than what we have or had. It doesn't matter to you what the doctrine looks like in practice, like a teenage girl enamored with a handsome serial rapist, you just look at the beautiful exterior, namely, the fact that the words of marxism and the idealism on paper just feels so good. By the time you are in the hotel room and the door is locked its too late, but hey, lets go one more time, it will be different this time.
" China has a huge economic success, lifting millions of people out of poverty, something ignorants like you scoffed at being even possible. They took means that didn't come out of Stalin's book so you got caught by surprise."
Indeed, they didn't use Stalin's playbook, well except in the beginning, when the Maoist regime successfully killed more people than both him and Hitler combined. No, I give you that, they've adopted the strategy of a more effective champion:
“The Capitalists will sell us the rope with which we will hang them.”
― Vladimir Ilich Lenin
Of course, I have to disagree with our deceased glabrous friend on the term "capitalist," there's no such thing, just like there's no such thing as "marxist," at least as the two doctrines exist in practice. There's just different flavors of fascism, and they absolutely did figure out to use our private fascism to benefit their public fascism. I'm curious though, if the result is lifting people out of poverty, without consideration of the means of doing so, what's the problem with the present state of affairs? I mean, without Western Capital and know-how, there is absolutely no chance that the Chinese would have been able to achieve what they achieved. The proof is in the pudding, until they opened up to the West, they were one of the poorest countries in the world. So, in reality, our libertarian friends our correct!!! "Capitalism" is the greatest system ever! Globalization is amazing. We just have to go as far as the Chinese did. For instance, a few million Uyghurs making Iphones for less than a dollar a day is what we have to do over here. Why don't you like Trump? He said wages have to go down? We can be like China if we drop our wages and increase the use of slave labor. We can even have the factories in a nice location! Don't take it from me, just listen straight from the horse's mouth:
I think though, your comment below regarding the intermediary step involved to facilitate your utopia really gets to the heart of the matter both as to what really happens when your murderous doctrine is applied and what is really the hidden driver for people that advocate for it.
You've established that you'll resort to anything except the obvious, that is, reading Marx. Since you don't care to know what you talk about, this conversation is pointless
Fantastic and substantive response, thank you for the edification. I will go and read Marx and ignore how his doctrine has been applied (numerously and diversely) throughout history. We will figure out how to apply the doctrine next time (or twenty times) in the future.
Say what? Marxism's goal is the abolishment of the state, and the current government of China is your example? You're right, that must be pretty complicated.
If you're surprised, it's because you don't know what you're talking about. Yes, you have to establish a socialist state which will pave the way for the abolition of the state. First, it has to restructure society in favor of the working class, then abolish all classes
"Yes, you have to establish a socialist state which will pave the way for the abolition of the state."
I LOVE IT! Sounds like a spectacular idea. And I'm sure you will agree, that the people in charge of that intermediary situation are one hundred percent going to exercise that power for the working class, and not for their own benefit and without ever ending that intermediary state. Because, lets be honest, the trend of human history is that folks saying they are going to do great things for the mass of people almost exclusively do so, they don't rob, pillage, and steal. Incidentally, can you explain to me why the key members of the Chinese communist party and their children own prime real estate in New York, Los Angeles, London, etc., and engage in the associated bourgeoise debauchery usually inherent with such living spaces instead of spreading the wealth around to the Chinese working classes? I mean, I don't get it, If they sold those apartments, maybe those Uyghurs can get an extra meal a day. I am asking for a friend of mine who is as ignorant as I am because when we engage in these transactions (namely selling prime real estate), we are perplexed that the individuals purchasing these palatial estates aren't just Chinese entrepreneurs, but for some reason, in the majority of circumstances, they are key government officials, and when complaints are proffered to the management company regarding the drug infused orgies attendant to the same, when someone goes to look inside, I have never seen a member of the Chinese working class in those glorious adobes, no for some reason, its either a communist official or his prodigious scions. I mean, Beria was also an anomaly in this respect I suppose, but you understand these issues better than I do, and can probably explain them to me. I suspect though, that you are just going to tell me you don't have the time to deal with me, even though you have the time to respond to everyone's counterpoints in minutes, but hey, you never know.
But in truth, both I and the other individual understand "marxism" quite well. REVENGE. Revenge on the competent. Revenge on the hard working. Revenge on those that tried harder, worked harder, were better looking, got lucky, etc. When the revolution happens, in your mind, those that managed to get a better deal than you will get the shaft, and you'll look down at their corpses laughing. You are going to show them. Hey, who knows, maybe you'll even be part of the group in that intermediate step... you know, the one that is going to do all those things for the "greater good."
The only force that rivals your thirst for revenge is the thirst of the "libertarians" for domination. Oh, they'll point out to me its not domination they are after, I just dont understand capitalism and libertarianism. And yet, when I look at the champions of capitalism, on this blog or others, they'll always tell you they disagree with banker bailouts, fraud, etc. But, that never seems to bother them as much as some poor son of a bitch that trades time for money not understanding his mortgage document, his credit card interest rate, or some other usurious perversion of our present economic system. They'll throw a sentence or two condemning the banker bailouts, agree someone should have went to jail in light of a couple of hundred criminal convictions attached to corporate entities (but not any individuals of course), and all the legion of other bullshit going on right now, but after the brief flotilla of words directed to the real criminals, an armada of prose follows explaining that the real problem underlying society is the poor son of a bitch who borrowed (fake) money and didn't comprehend the underlying terms.
The only reason I don't bother responding to these cretins is that they are presently in charge of the system, and the results, contrary to their screams that this isnt a "free market" is plain for everyone to see, and they have been completely discredited. What you are selling though, most people in this country haven't experienced (although some members of my family have), and that's what makes you dangerous. A very real problem exists here, and you guys are selling a more visceral poison as a solution.
Ah, the light bulb goes on! When you say "You don't knows what you're talking about.", that translates to normal human language as "You are not adequately indoctrinated into the self-proving nature of Marxism". Got it.
You know what else lifted millions, actually, BILLIONS out of poverty?? Fucking capitalism, you ignorant tool.
Was it corrupt? Sure. Are you saying the CCP doesn't involve corruption?
Was the created wealth unevenly distributed? Sure. Are you saying the wealth generated by the Chinese economy is evenly distributed??
In point of fact, the Chinese "success" is piggybacked on improvements to human life that have been initially generated by...you guessed it: capitalism.
I mean, this is such a glaring flaw in your contention...I guess it must be too complicated for you.
I see no one briefed you about the state of poverty in the US. I suppose the tens of thousands who die each year of not being able to afford medical treatment and all those homeless veterans are a sign of great success
It's a closed loop, Lord Acton's "All power corrupts, absolute power corrupts absolutely" takes over in seemingly every case. You have a great idea. But then when some asshole goes off the rails with the power he's given to enforce that second document it's groundhog day. We have to find a practical solution. I think Plato was right, need a Philosopher King, someone altruistic, and about 6'-6" and 500 pounds.
I agree. Every hierarchy and system degrades. The correct frameworks provide a longer time frame and better framework. The problem with this country is the focus on private vs. public. It should be collectivist versus individualist. Collectivist entities should not have the same rights as real people and heavy counterbalances have to be in place to avoid this mess. Governments are just one kind of collectivist institution.
But no less than the Supreme Court reinterprets the Sherman Act to make it harmless, recognizes corporations as individuals (Rockefeller on his stone pillar "supreme worth of the individual" above all else), uses the 14th amendment as protection for corporations instead of people. Richard Olney, Grover Cleveland's AG, comes up in every book as having an epiphany. Using the Interstate Commerce Act (Government regulation) against people, instead of as protection for them against the railroads. Thomas Frank tells me the great cynicism of the GOP is that they don't believe themselves, that it can be changed. So they bark at their own tails. I'm telling you, on the brink of nihilism here.
Matt- stay strong. Fuck the phony bullshit elitists and their cute little MFA essays. Stay close to the real people on the street. That’s where real life exists.
The sub prime meatloaf bundling great loans with redline crapola was made to solely to pass the reqs of Fanny Mae and Freddie Mac. If those quasi governmental entities were not legally required to accept that shitloaf none of that would have happened. Gov't pressure for "geenlining" is the direct cause.
File under "true but will absolutely be called 'racist'".
One of my son's black friends was mystified when a (Countrywide) mortgage agent tried to sell him a 400k house with a variable (on his $30k income) by showing him a chart of home prices over a decade and a half and telling him "Look, if you're not making more money in five years, just sell and pocket the equity from the price increase! Easy money!"
He'd made his peace with being relatively poor and carved out an enjoyable life. He smelled scam and noped out. But it was an interesting data point a year or two later when it all hit the fan.
As I read this something occurred to me. Maybe the Covid hysteria would have been less had the government NOT intervened. So many people have been hypnotized by stimulus and clickbait crack because that very stimulus allowed that to happen.
I’m still appalled by the fact my grandchildren’s tax dollars will be servicing debt we issued to prop up Carnival cruise lines, who basically uses serfs as their staff and registers there ships in far flung spots around the globe to avoid American labor laws. American Airlines is another one that should’ve been allowed to die. It all disgusts me. The truly poor haven’t been helped as is evidenced by the homelessness epidemic in many major cities.
This morning I walked around in a building on a lake in Southern Oklahoma that was built by the WPA and CCC back in the 30s. Almost 100 years old and these things are still standing - to me a testament to what true government “aid” should look like. These jack wagons in DC keep printing money to keep the oligarchy rich and the lobbyists keep feeding them more dough, and the cycle continues.
Instead our tax dollars go to help a few kids get wealthy, a few billionaires to have a few less billions, and will still leave us morally and spiritually bankrupt...and about the same as we were before economically. What a farce!
COVID hysteria began when Wuhan supply chain interruptions led to razor thin leveraged margins “eroding”. That meant bailout or ruin. This is the start of corporate media whores whipping up a panic. $$$
Then after Trump stumbles into a trap its seen as a way to undo him - it worked.
COVID restrictions are also a good way to prevent free assembly, and the hated religious worship.
COVID crushes small businessmen- who just might support the GOP.
COVID emergency measures allow innovative election practices.
COVID does allow Rioting - if approved.
COVID destroys your enemies politically, disenfranchises their voters, lets you take trillions, enriched connected Tech Lords individually by billions each, and a year later we’re living in Communist Eastern Europe 1980s in terms of political rights with the social safety net of Brazil’s Favelas.
COVID is Annus Mirables for the Elites, and Annus Horribles for the rest.
A few items here are straight bananas, but the fatal flaw in your thinking lies in the inference that the group you call “elites” doesn’t include both parties (it does). Republicans aren’t the good guys. There are no good guys. As long as people like you lack the imagination to see beyond the two-party paradigm, we’re fucked...covid or not.
I don’t see two party being referenced in my remarks.
We’re a one party govt, BTW
Oh, really? You’re just totally flummoxed by my reading any of those remarks as right-wing/Trump apologia? Come on. It barely even qualifies as subtext.
Agreed, the 2 party system is currently a mirage. The party in control is the Uniparty where the labels D and R no longer have any meaning as they both draw from the top end of the enormous trough. Its One big club. Whatever R or D in "in power" no longer has any meaning, they all feast just as succulently. They are on the same side and work together because they suckle from the same teat of the entrenched bureaucracy. They know the FIB and MSM control the elections. Enjoy your Red White and Blue Banana republic with Dominion certainty of electoral results.
But what if Trump can claw to actual leadership of the R party? Push aside the obvious grifters, and joe public knows who they are. Only then will we have a real 2 party system again. From my POV this is the only salvation for a USA as founded. It is that serious.
Agreed! Lockdown (lots of studies of the damage) show an exponential growth of health stress due to job loss, family separation and isolation. Think of all the money Pharma will make treating all the depression and stress as a result. Then add all the experimental " vaccine" money and the drugs they will provide people who have experienced side effects (Bells Palsy, fertility issues, heart issues etc.)
He's not talking about lockdowns, he's talking about government bailouts of poorly managed businesses and unimportant industries (cruise lines....? It's inconceivable)
As far as I know cruise lines didn't get any money or loans from the stimulus packages thus far. Neither has Boeing although they came close and many people believe and claim they did . Airlines did get 15 bil
Look up "Strength Through Joy", a Nazi program (yes, I know, I just Godwinned this, but it is relevant). It shows how cruise ships might just have some importance to a totalitarian overlord.
Matt, keep up the great work. You are a true journalist. I hope you make a fortune while the rest of the media propagandists go broke. Best wishes.
“There’s a lot of anger out there, and it will jump at chances to express itself.”
Brother- you don’t know how much of an understatement this is!
Spot on! I recounted my own story on the other Game Stop post, so I'll just say here that the part about the shame was very, very real. I was 40+ years old when we defaulted on our mortgage. Prior to that, we had platinum credit. And our mortgage was not an ARM- didn't matter- the value of our home depreciated about 45%. It was beyond embarrassing not to be able to pay our bills, and even friends and family insinuated or said outright that we homeowners were to blame. And yes, unlike this past year where people have been able to dip into their retirement accounts without a tax penalty, we paid the hefty penalty as we drained our accounts to try to stay afloat. There was also no moratorium on evictions or foreclosures. I know there are many readers of this blog who (rightly) criticize Democrats for their many failures during the 2008 crisis. I remember also, though, a Mitt Romney statement that was roughly, "Don't fight the foreclosure on your home. Let the VCs come in and buy up the properties." Democrats are very weak on these matters, for sure, but Republicans will also leave you high and dry with not so much as a "by your leave."
Whoa Nellie! There are so many comments here, I'll just reply to the original post. I had posted elsewhere that my husband lost his job, which was 2/3 our income, and then was diagnosed with Parkinson's and could not get another job, which was what made it impossible to pay the mortgage. Had this unfortunate event happened without a drop in the housing prices, we would have just sold our property and moved and downsized to my income level. It was the trifecta of loss of job, health crisis and plummeting housing market- all of it continuing for years that made our situation impossible to sustain.
I'm not looking for anything here other than to say that sometimes, even responsible people can get their boat swamped. Not asking anyone to feel sorry for me. Just saying that my family, like a lot of other families, got hit hard by a macro economic downturn that was not entirely under our control.
Your loss of short term liquidity due to the drop in housing prices was unfortunate. By rights, you should have been able to sell the house for a value approximating the mortgage. It is not typical of the things that were going on in 2008. Most people were using the house as a piggybank, and refinancing to get more money out of it to live large. Alternatively, people were flipping houses and expecting that the game of musical chairs would never end. It always does, though.
«I was 40+ years old when we defaulted on our mortgage. Prior to that, we had platinum credit. And our mortgage was not an ARM- didn't matter- the value of our home depreciated about 45%. It was beyond embarrassing not to be able to pay our bills, and even friends and family insinuated or said outright that we homeowners were to blame.»
And indeed you were to blame: whoever signed up for a loan on 10-20 times leverage on an asset that can go down in price should be blamed if that asset goes down in price.
If you could not afford the risk of a 45% loss on a leveraged speculation you should have been a renter. Do you think that you are entitled to own real estate, and risk-free too? Your implication that you were not to blame can only be justified if someone had formally guaranteed that the price of your house would never fall that much. You may have been deluded that it was a one-way bet, but turns out nobody guaranteed that to you.
Sure you are bitter that most people who owned real estate before you did get away with the risks of highly leveraged borrowing over a volatile asset, but eventually someone eventually will be burned (not Wall Street of course) by that volatility.
Also: a 45% drop? Only highly speculative real estate close to the "beachfront lot in Arizona" type had a fall that huge.
False.
I also had a ~50% drop in my home valuation at that time. Could've easily been more had I bought 3 months later than I did (the peak).
Jillian is not responsible for her house valuation halving in a year. Go troll/shill somewhere else bub.
How does one go from being able to afford a payment on a home when it is worth $500,000 (for example) to not being able to make the exact same payment on the same home now worth $300,000? The payment is based on the loan, not the value. The only real "cost" is being unable to sell at will.
I guess that you know well the answers:
* Many if not most of them though they would have to make the payment on the $500,000 mortgage only for a short period, and then flip the house for a big cash profit.
* Some lost their jobs in the recession and they had never expected to have at the same time the downside of a crash in house price and a loss of their salary, because they thought that cannot happen, must not happen, to middle class people, only to lower class "losers".
Loss of a job is entirely different. Neither poster referenced a job loss. I personally had friends and family despairing the loss of equity, as if financial ruin. They would say things like, "I'm upside-down on my house and don't know what I am going to do!" There were millions of people who thought they were badly harmed at the time, but they really weren't - everything, for them, remained the same other than the value of an asset. We see similar now due to the pandemic. For example, governments at all levels have stopped all evictions for all reasons. Many evictions are unrelated to Covid. Nobody mentions the DIFFERENCE in evictions numbers. There is an average baseline. Our government should focus on those who can demonstrate harm, not blanket solutions "helping" millions who don't really need it. Everyone I know received the Covid payments, while nobody I know was financially impacted by the pandemic (aside from now working from home more and not going out and about as much). Many people claim harm where there is none, diluting the population actually harmed. Same with the '08 financial crisis - many were actually harmed and some were merely inconvenienced, yet all demanded the government "do something." Legislators don't even write legislation, let alone read it. Lobbyist's lawyers write it for them, and guess who gets the biggest benefit? Certainly not those who really needed it.
«Jillian is not responsible for her house valuation halving in a year»
But was she responsible for exposing herself to that risk or not?
Was she forced to buy or did you and her have the option of renting? I know a number of people who starting in 2005 decided that the risk was too big and sold to people like you and Jill and switched to renting to minimize the risk.
How do you become risk adverse to corruption and fraud? how do you forecast for that? What a ridiculous suggestion. You know it was fraudulent criminal behaviour right?
«How do you become risk adverse to corruption and fraud? how do you forecast for that?»
That seems to me the fancyful claim that speculators who borrow at 10-20 times leverage because of the potential big profits of a volatile asset have the absolute human right to expect that there will no significant downside.
«You know it was fraudulent criminal behaviour right?»
Then sue the culprits and get damages. But the Wall Street criminals didn't defraud their borrowers (except in some cases during repossessions), they defrauded their shareholders.
Anyhow, in reality another category, those people who have to work for a living have no right to expect it will never have a significant downside, and that it will last them until they retire, and must always be ready to cope with losing their job, which is a 100% cut in their income, for whatever reason they lost it.
Actually, I have to hop on here. I stayed out of the housing market from 1999 to 2009. Partially, it was the result of luck/a bad divorce but every time I was tempted to get in and buy, I looked at the house prices and said "there has to be a correction soon, this can not continue" and avoided it a few more years. Damn glad I did. I also kept my money out of stocks by not having any money. :-)
My point is that everyone with half a brain could see things were not right in the mid-first decade of this century. Overheated building, prices multiplying - that's not a boom, it's an asset bubble. We'd seen this before with the dotcom stocks.
They defrauded their *clients*. Who were, generally, banks and funds with deep pockets buying CDOs with false risk ratings.
exactly 💗
I couldn't have said it better! 💗
sorry about to hear about your experience but fluctuating value of the house is not correlated to one's ability to come up with a set monthly payment anymore than a 500 per month you pay in car payments is correlated to the fact that in 4 years the car going to be worth 40% less.
Most people who buy houses - and who were foreclosed on during the crash - bought those houses to LIVE in. Not as speculation, nor particularly as investment. Simply to have a place to live and raise their kids and maybe retire.
When you pay rent, at the end of the deal, you walk away with nothing - no principal at all. When you buy a house, you pay the mortgage for 20 years, or 25 or 30 - and then you own it. No more monthly payments.
And I'm not sure what part of the country you live in, but in California, in many markets it's actually more expensive to rent than to pay off a mortgage.
We bought our home to raise our kids in, and to spend the rest of our lives in. (Having written about music for the better part of 30 years, I've accumulated thousands of LPs - to the point that I told my wife that our last move was MY last move - my back has no more moves left in it. You move vinyl enough times, it wears on you. Next time I move out, it will be feet-first. And my kids can argue over the records.)
«Most people who buy houses - and who were foreclosed on during the crash - bought those houses to LIVE in.«
That's just handwaving...
«Not as speculation, nor particularly as investment. Simply to have a place to live and raise their kids and maybe retire.»
I have heard this ridiculous claim so many times and I always ask: so you would agree that there should be a law that homes should always be sold for the same amount they were bought for, if the goal of owning them is just to live in them without considering the speculative upside.
Somehow I think that many if not most people would not buy if they had to sell for the same price they had paid. The "certainty" of a big fat tax-free, work-free upside is pretty common as a motivation for buying vs. renting, and for buying as big as possible, with the highest leverage achievable, to get the maximum speculative profit possible.
«When you pay rent, at the end of the deal, you walk away with nothing - no principal at all.»
That is usually wrong: if you pay rent, you still got the money that would have gone into paying interest on the mortgage, which is usually over half the mortgage. Many have computed that if real estate prices were not ballooning it would be cheaper to rent and put the capital into securities. Putting the money into real estate rather than securities means that one expects real estate to balloon in price faster than securities.
«in many markets it's actually more expensive to rent than to pay off a mortgage»
That only happens if interest rates are low, that is if real estate prices are growing fast. And it does not take into account the risk that the price of the real estate could fall below the amount of the mortgage, while rents have neither upside nor downside.
In the end the only reason to buy vs. rent+stocks is the expectation that capital gains on real estate will be bigger than dividends or capital gains than on stock, that is that highly leveraged speculation will win.
Accordingly quite realistically BusinessWeek wrote recently:
https://www.bloomberg.com/news/articles/2020-12-22/opendoor-open-faces-an-expensive-path-to-profitability-in-real-estate
“From the minute the average couple busy a home they're constantly calculating how much they'll make when they sell it, and most won't sell for much less once that day comes.n
“ if you pay rent, you still got the money that would have gone into paying interest on the mortgage” Just how fucking out of touch are you, actually? If you rent (like I have my entire adult life until a few years ago), it’s because you don’t make enough money or have a steady-enough job to feel comfortable buying. I wasn’t saving any money when I rented; I was spending that money on my rent!
«“if you pay rent, you still got the money that would have gone into paying interest on the mortgage” If you rent (like I have my entire adult life until a few years ago) [...] I wasn’t saving any money when I rented»
Usually I reject the idea that many adults are not mentally capable of understanding the simplest aspects of finance, but when I read deep imbecilic hallucinations like this I have my doubts.
Because you have simply hallucinated a claim that your were "saving any money when I rented", that exists only in your defective imagination:
* If you have the money to buy with a mortage, and rent instead, you are indeed not spending a cent on interest. That means that the money you would have spent on the interest of a mortage is still with you.
* If you don't have the money to buy, it is often because you can't afford to pay that interest, and that still means you are not spending a cent on interest, that "not spending" money you don't have does not mean you are saving it.
The fundamental point is that often 50% of a mortgage is interest payments, whether you can afford that or not.
If someone like you cannot afford to pay that much, that simply means that they are paid too little to save, for a house, or or a pension, or much anything else. Welcome to post-Reagan America!
“Most people who buy houses buy them to to LIVE in” is just “hand waving”? Why? Because it doesn’t help the lame-ass point you’re trying to make? Most people DO buy houses to live in, asshole. Is it also an investment? Sure. Especially in places like here in CA, where, like Jim said, it’s cheaper to buy than to rent. It just makes sense to buy, if you can (I can’t, but my girlfriend can). But we LIVE in these houses, dick.
«Most people who buy houses buy them to to LIVE in” is just “hand waving”? Why? Because it doesn’t help the lame-ass point you’re trying to make? Most people DO buy houses to live in, asshole.»
I apologize for not sharing your hallucination that people who rent houses dont't LIVE in the houses they rent, as in your fantasy it seems that the only way to LIVE in a house is to buy.
We are not discussing living in houses, but the potential financial upside and downside of owning vs. the lack of financial upside and downside of renting.
«<i>it’s cheaper to buy than to rent. It just makes sense to buy</i>»
It is cheaper also because buying unlike renting exposes the speculating owners to volatility, the downside in particular, so a number of potential buyers will rent to avoid exposure to that downside.
Every hand-waving argument by residential real estate speculators that I have discussed with soon became the argument that *both* buying should be cheaper than renting *and* that the downside should be paid for by renters (through bailouts when needed), while the upside should go entirely to the residential real estate speculators.
Head speculators and Wall Street win with booming prices and rents, tails and renters lose for making speculators and Wall Street whole.
Dude.... You’re a dickhead. For real, you’re a moron. There’s really nothing left to say. YOU are talking about “real estate speculation”; the rest of us are talking about,”It’d be nice to own a house without worrying about the next economic recession, when we will inevitably lose our jobs and the bank will foreclose on our mortgage.” Which will happen again. And again. And again. And the point you’re trying to make, that poor people should continue renting and never have a shot at owning their own house (in essence, poor people don’t “deserve” to own anything) just illustrates the disconnect between dickheads like you and the rest of the world.
Don't be a dick.
Wow-- your self-righteous is ridiculous! LOL! Heh who died and made you god?
You are rather fond of this criticism...yet oblivious to the underlying self-indictment.
This sounds like it was a budget issue ..maybe from loss of a job or other income source? A drop in the value of a home doesn't effect the mortgage payment on a fixed rate loan. It sucks if you need to relocate and have to sell at a loss or if a better rate is available and you can't refinance because of LTV requirements. It sounds like terrible timing if you weren't able to take advantage of the short sale options many people used post crash
Yes not clear here why you lost the house if it wasn't an ARM. Did you also lose your job?
Some one got adjusted out of their house? Or adjusted THEMSELVES out of their house? A shark sold someone a mortgage loan they can’t afford? Who borrows tens of thousands of dollars without a lawyer to review things, especially when they know what they don’t know?
Now don’t get me wrong. There were plenty of crooks in the housing bubble on Wall Street and in the mortgage brokering business. They should all be in jail. On the other hand, there were loads of people who knowingly took out liar loans and they should be in jail too. You never hear that though. Every borrower was a victim. Not true. It took two to tango. Three in this case - greedy Wall Street bankers, deceptive and dishonest brokers and lying or stupid borrowers.
None should be let off the hook and none should be pitied.
Who borrows thousands of dollars without a lawyer? EVERYBODY. I have purchased a dozen homes in my life and never, not once, has a lawyer talked to me about the type of financial vehicle financing the property.
Because that's what this situation needs!
More lawyers!
*gags self to death*
«Who borrows thousands of dollars without a lawyer? EVERYBODY.»
Only the people who expect that the price of the collateral will balloon, so any problems will be paid for by the next buyer. If they are sure that the price will double in 10-15 years, why worry about the terms and conditions...
If wishes were horses, beggars would ride.
I hope you know finance then. Otherwise you are a fool
Man, you must be on the spectrum, I feel so sorry that you lack even basic social skills.
Extreme privilege. HE can afford a contract lawyer, so everybody can.
I think your ideas on how much lawyers cost might be a little out of whack.
My niece is a lawyer, and I can't afford her.
Exactly or he wants us to believe he can
Its called " a self-righteous prig" here where I live. Easy to virtue signal when youre anonymous. Can't you feel the smug smile?
thanks Dad
The vast majority of borrowers are represented by a lawyer at the closing.
Not in many States. I've bought a few properties in Florida without a lawyer within miles of transaction.
The real estate attorney concerns himself with the validity of the title and the transaction, not the financing. He is not a mortgage broker.
No, but I could have gotten any of my lawyers to weigh in on how I was financing. Of course, I never did anything but a bog simple 30y fixed, so...not much to say.
I think that's demonstrably false.
The average house price in the US in May 2020 was 284,600. Nearly 50% of home loans "use" PMI (as of 8/19 - it fluctuates, that's the latest I've seen).
No matter how cheap a lawyer is (or how good of an idea it is to run a serious contract like a note by one) - you can't honestly believe someone borrowing $250k, and unable to scrape together 50k for a down payment, is willingly going to spend $500/$1000 extra?
This isn't a comment on whether they SHOULD or not - just on actual behavior.
A number of states, like NY, Mass, NC, De. and others literally require that a buyer be represented by an attorney. Quite a large number of mortgage lenders insist on it even in states where it is not required.
You would not buy property without an inspection by a professional. If you do you could get something with problems and issues that would cost thousands to correct. Same with complex mortgages and terms of sale. Unless you know the "system" inside and out you would be well advised to consult with a financial professional or an attorney with real estate experience. Just like insurance. If you don't use it okay. But if you need it it is great to have.
Do you talk to lawyers before buying insurance? No you talk to an insurance broker. How about investments? A Stock Broker. Same with Mortgages, you talk to a Mortgage broker, they explain it. But they arent lawyers.
"... lying or stupid borrowers."
Elizabeth Warren on credit card agreements: "I taught contract law at Harvard University and I can't figure out some of the stuff that's in these agreements - and you expect a mother with 2 kids and an Associate's Degree to understand what it's all about?"
This bullshit of blaming the victim with the "they knew what they were getting into," or my personal favorite, "Hey, nobody forced them to sign that contract!" is tiresome.
What’s really tiresome is that everyone with adverse outcomes in life looks for someone else to hold the doodybag for them
Doodybag? Finance got $29 Trillion from the Fed in 2009, add a few trillion in QE, and another $9.7 T this year.
Why can’t the commons get enough love to live indoors and eat regularly?
I’m so Right Wing I’m flossing with steel wire, and paid my way my whole life. I also understand these people are criminally insane, and need to answer for it. If you invited these Financial Wizards to Dinner you’d have to count the spoons after...some WILL be missing.
Adverse outcomes?
Adversity and outcomes “on the way”...as we say in my trade.
Tell me how much the government lost...or earned...on bailouts to financial companies. We know that they lost money bailing out decrepit car companies in favor of the unions whose unsecured c,aims were elevated above secured claims.
Gracious! The government never loses a cent!
It just creates how ever many Trillions or Tens of Trillions it needs!
I guess you never heard of MMT!
Modern Monetary Theory, which is of course actual practice.
I can also guess we may have a different idea of what 'government' means... really, it's 2021.
And I am guessing someone believed in 'secure claims'.
In political economy and all economics are political the only Security is POWER.
Sir.
Ok everyone (including me!) lets not feed the troll anymore
yes, wilco
'I recall you on the telephone/I recall when you get mad
I will still love you to death/And I won't ever forget how
And I know that it won't be/The easiest to set free
And I know that I won't be the last/Cold captain tied to the mast...'
Ah...the old resort....ad hominem. You go girl
No, what's really tiresome is that hose that complain loudest about "everyone with adverse outcomes in life" are the ones that benefit the most when government steps in to hold the doodybag.
No really. I agree with everything Matt said. There were also plenty of folks flipping houses and building decks, etc with easy money. Until there weren’t.
Low to no down payments and interest only loans.
^brain worms
As someone with part Cherokee lineage, I find this admission by Warren humiliating.
This isn't fair. People understand the cost of credit. They just get in situations where they feel they need it or worse so many businesses require a credit card to do anything. It's "not a mother with two kids and an associate's degree" that can't figure it out. That is a disparagement.
This is true. If you do not have a credit card/functional credit you will truly get raked over the coals. I’ll defend the payday loan places-you have to pay for convenience, but Rent to Own places would make a Jersey loan shark blanch in shame with their rates.
Average people were flipping houses and living large.
Credit was flowing. Valuations were insane.
And that was the selling point. "There's not really any risk. Look at how prices are rising/have risen!"
Of course, once that ended, the buyers were under water w/ no recourse and the lenders had protected themselves with the "toxic asset tranches" in securities packages.
At least that's my understanding of the (observed) events.
But they are stupid and/or foolish to trust strangers. It isn't hard to find out the kind of loan you're signing up for. Sorry if you don't like that, but it's obviously true.
For sure, I mean I fully choose to "sign" the T&C for every online account I am ceaselessly begged to create by corporations.
hear hear-- just ignore self-righteous Rick-- he doesn't realize that he isn't a better person just because he says he is.
I believe Elizabeth Warren as,far,as,I can throw the building I’m in.
Yes, some people knowingly took out "liar loans," probably as a result of lying to themselves, or being convinced that real estate would keep on going up. We were offered one and turned it down. But you're ignoring most of the stories, people who were lied to, getting an ARM when they thought it was a normal mortgage (who can afford a lawyer in such a deal? Bit of privilege showing through, there.) Or who had an affordable mortgage until the whole economy was ripped out from under them - by Wall St., who suffered very little.
In 2008, Wall St., collectively, and a bunch of idiotic economists drove the economy into the ditch. They should all have been left to wait tables for a living, or worse. Some should be inn prison - still. but no, they were bailed out, which was hugely, passionately unpopular at the time. That was one of the big sources of the Tea Parties, for one example. So the whole thing was an exercise in corruption - by Obama's government.
Why is it that so many people ignore the genesis of the housing bubble came from governmental requirements that loans be made to people who couldn’t afford them under penalty of law? The banks who were threatened thst they could open new branches or acquire other banks unless they paid off liberal community organizers? The requirement that Fannie and Freddie make bad loans? The Congressmen who got sweet deals on their own loans to protect predatory lenders?
And if you can’t afford to buy a house without basic advice from a lawyer you probably can’t afford the house anyway. But you WANT it. I want a lot of things - when I was young I wanted to be a MLB right fielder. No one gave it to me. Is it unfair that I couldn’t get my desired occupation? Was I discriminated against?
The most important transaction in your life any some of you demand that a person be justified in relying upon a person on the other side of a commercial deal? Have you lost your minds? Should they be accompanied by the store manager of a grocery to ensure they buy the best deals on offer? Shall we hold McDonalds liable when fools eat their crap twice a day and get diabetes and heart disease?
When are people supposed to stand on their own feet and realize hat they are in over their heads in in such a fundamentally critical financial and life decision??
Here it is people, the most shopworn trope in the post 2008 conservative playbook: the poor widdle wenders were forced -- forced I tell you -- to throw away their underwriting standards and approve those loans, and even resort to fraud. They HAD to lend to the unworthy, or face jail! Because we all know that it's Congress who tells the financial services industry what to do and not the other way around...
I do not understand why you think the bankers tell the regulators what to do.
I work in the DoD and I know about regulatory capture, and the impact of bought congresspeople, but that isn't the same as a regulated industry telling the regulators to shove it and do what they want.
Let's say it were, though. Why are you so insistent on letting the politicians off here? They are certainly culpable.
I'm only insistent on calling bullshit on the charge that the Great Bubble and resulting financial crisis was due to lenders being forced to loan to people who otherwise wouldn't qualify.
As for letting politicians off the hook...no, they were the ones who dismantled the regulatory structure put in place by FDR to prevent chaos and occasional collapse in the financial services industry. Reagan to Clinton, so bipartisan scumbaggery. The question, though, is who is the dog and who is the tail? I think the evidence is clear that the industry is the big dog here. They called the shots on deregulation, as well as the bailout.
Well the CRA related loans - which is what you are talking about - were only 6% of the total, so even if they were higher risk (which some data supports), it only caused a small portion of the problem, which leaves a huge amount to be explained by other means.
With that straw man out of the way, the industry people didn't call the shots, the government people did. They thought it useful to kiss Wall Street's ass, but what is new about that? What would change in the future to make that NOT happen?
My answer is "nothing". Even if you overthrew the government, you'd have the same wealthy shitbags peddling the same crap in this putative new government. With everyone just as susceptible to the filthy lucre as last time.
Why is it that people think everything is an apples to apples comparison-- all neat and linear? Nothing about human behaviour is--ever. As a medical professional it is mind blowing that you think that there is a direct correlation between eating McDonalds and heart disease/diabetes. I have patients that eat similar diets and have none of those illnesses-- must be something else could cause those illnesses right?
You can't compare that to the fraud and corruption done by unregulated practices by banks and their "salespeople" who promise you will get "more cash flow", better rates etc. to unsophisticated buyers aided by levels of govt who ignore (or remove it - Glass Stegal) and look the other way not to jeopardize funding during election time. It is not even remotely comparative.
Thank god I live in a country where there are rules (and recourse for the home owner) about this kind of predatory "salesmanship". And yes we have real bank regulations as well. Banks are not total crap tables here. FYI-- Canadian real estate didn't implode, no bank failures and no bank bailouts-- all due to very basic regulations (Canadian banks do very well--$ billions well all around the world)
Funny my husband the fraud lawyer is dealing with a case where a big company is suing an insurance company for not providing Ponzi scheme insurance thought -- seriously -- and they are "sophisticated buyers" but lost millions of dollars so they get opportunity to get it back. Not the unsophisticated home owners who were lied to, not provided basic information about what they were buying and yet the "company" gets recourse. Nice system!
Your " boot strap" comparison is eye-rolling. The world and especially human behaviour is not that linear and direct --ever.
Well then, let’s get everyone assigned a government monitor to make sure that everything they thing they bargained for or are entitled to is delivered. But query, do the monitors get monitors?
I see both sides of this story, Rick. I am ok with losing my house, my business, almost everything I owned. I learned from it. It is a complex story, as Carol has pointed out. I wasn't over-leveraged. I had attorneys. At one point I just let it go, I'd been fighting collapse for over 2 years and realized, I'm not going to survive this because I'm focused on property, lifestyle and $ instead of my mental/physical health. I shrunk my lifestyle to nothing and started over. Here's the problem:
What have we taught major banks / Fintech when they don't get called on their bad bets? I've recovered, took 10 years and am in a better place. But nobody bailed me out. We have, essentially, two classes. One has a get out jail free card, the other does not.
Exactly-bailing out the Wall St types is like giving a problem gambler an unlimited line of credit at the casino.
The banking system needed to be bailed out because our entire financial and economic system depends on it. Many didn’t get bailouts. Wachovia, Merrill Lynch, Bear Stearns and Lehman. Those that survived had serious limitations placed upon them. And at the end of the day, the government and hence the people profited from it.
I’m interested to know the circumstances thst caused you to lose your house. Did you buy too much house? Take on too much debt? Use adjustable rate products?
yup its called govt here-- less influenced by big corporate money then the US
I believe almost all mortgages made in Canada are "recourse" yes? That is the fundamental reason there wasn't a housing meltdown in Canada. Simply doing the same here in the states would end the threat of a repeat and take bad actors in the mortgage origination process and ignorant consumers off the table.
We do power of sale here- very few foreclosures. Our banking system is very very different than yours. Sorry-- former banking economist-- that's not why there wasn't a meltdown. We have very different holding percentage requirements for bank lending. Both OSFI and the federal Bank Act (banks are regulated by the federal government) have clear basic minimums. So the crap table lending and gambling you get in the US is not part of our system.
Remember your system is heavily private (including regulation)--ours is not-- if private banks want to operate in Canada they have very clear regulations they have to meet- then they get a piece of the pie . We used to have 5 big banks until 1980 when we let some international banks in HSBC, some American ones etc.
Hey Carol. I'm Canadian and I suggest you don't brag about Canadian banks or regulations just yet. Look at the Bank of Canada balance sheet https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/
Canadian real estate values are being propped up by super cheap interest rates that are only good for 5 years and not locked in for 30 years like many of our American friends. The Bank of Canada has no plan to get back to "normal" market place derived interest rates and a market place mortgage rate is not 1.6%. So like a lot of things, Canada follows the USA about 10 or 15 years later. Most new mortgages are insured by CMHC which is our mighty Canadian government doing what the private sector doesn't want to do. So Canadian taxpayers will take it on the chin when this mess finally has to adjust to the realities of the market just as the US had to do post 2008. Good luck to all Canadians.
«almost all mortgages made in Canada are "recourse" yes? That is the fundamental reason there wasn't a housing meltdown in Canada. Simply doing the same here in the states would end the threat of a repeat»
All mortgages in the UK or Ireland (or Spain etc.) are "recourse" and there was a meltdown. What happened in the UK: the government ordered the mortgage lenders to avoid "recourse" because it was politically unacceptable, the speculative middle class would not accept mass repossesions. Some years after the 2008-2009 crash the BoE published a survey showing that 14% of all mortgages were still in "forbearance", and this caused quite a storm, so they stopped publishing such data.
http://pragcap.com/you-cant-handle-the-truth-2
“The Bank of England estimates that as much as 14% of all UK home loans are either delinquent or in some sort of forbearance process. Nobody really talks about this because nobody wants property prices to fall out of bed. Can we handle the truth?”
As in many other cases "recourse" is something that can only happen to a few middle class people, and then their neighbours think "losers", but it cannot happen to many middle class people because then they vote against it at election time. Individually the middle classes are powerless, but collectively they can swing elections, so they are powerful.
All Home mortgages in the US are personal recourse, secured by the home, but liable for any shortfall upon sale
Here are the 12 states where mortgages are non recourse: https://www.forbes.com/advisor/loans/recourse-loans-vs-non-recourse-loans/#:~:text=Home%20mortgages%E2%80%94though%20generally%20recourse%E2%80%94are%20non-recourse%20in%2012%20states%3A,Carolina%2C%20North%20Dakota%2C%20Oregon%2C%20Texas%2C%20Utah%20and%20Washington. Home mortgages—though generally recourse—are non-recourse in 12 states: Alaska, Arizona, California, Connecticut, Idaho, Minnesota, North Carolina, North Dakota, Oregon, Texas, Utah and Washington. If a homeowner defaults in one of these states, the lender can foreclose on the collateralized home but cannot go after the borrower’s other assets.
Cal, Tx and AZ are the biggest obviously and comprise a significant percentage of underlying loans in most MBS products. You might look up the HARP program that was created in 09 but expired in 18. That program I believe was the one that allowed short sales of properties with no further recourse to borrowers but not positive
The people who sold them, like the people who sold opioids should take some responsibility.
No doubt. Couldn’t agree more. But the borrowers weren’t angels and stupid is as stupid does.
One of the worst vices is self-righteousness-- sigh. You must be perfect!
According to whom? Are you familiar with the other vices and their effects?
In the past, and theoretically still, bankers and other corporate lenders were required, under penalty of law, to deal honestly, precisely because otherwise they had a license to steal. Which they now have, because they've bought off the cops.
Otherwise, ordinary people couldn't buy houses, or even cars, at all.
«Why is it that so many people ignore the genesis of the housing bubble came from governmental requirements that loans be made to people who couldn’t afford them under penalty of law? The banks who were threatened thst they could open new branches or acquire other banks unless they paid off liberal community organizers?»
Can you quote the word of any federal law as to that? The CRA as the name says requires nothing like that:
https://www.federalreserve.gov/consumerscommunities/cra_about.htm
«the Federal Reserve
* examines state member banks to evaluate and rate their performance under the CRA;
* considers banks' CRA performance in context with other supervisory information when analyzing applications for mergers, acquisitions, and branch openings;»
I cannot see any requirement or threat there, never mind related to pay off "liberal community organizers". Is the Federal Reserve a far-left propaganda organization?
«The requirement that Fannie and Freddie make bad loans?»
Can you quote the text of any law that allows Fannie and Freddie to make loans to people, never mind bad ones? AFAIK Fannie and Freddie can only *buy* loans already made by banks and other mortgage lenders. It is up to the banks to make good or bad loans. The banks have however paid Congress to ensure that Fannie and Freddie and the Fed bail them out by buying the bad loans they made, and indeed the Fed has bought trillions of dollars of bad loans ("toxic assets") at "special friends of Congress" prices from the banks.
Prosecutor, Charge Thyself
A 2010 WSJ article which speaks to HUD secretary requiring the two GSEs to hike Their purchase of subprime loans to 50% of the total. And forcing them to degrade lending standards.
Also REGULATORS, whose approval for mergers and branch openings were withheld unless they followed preferred lending guidelines, controlled that process. You want a law - look at other enabling statutes giving them broad authority to regulate mergers and branch openings.
You see, to love the regulatory state. Why demand specific statutes when broad grants of authority work like a charm?
It doesn’t fit in to talk reality. It makes what I assume are otherwise reasonable people nutso cuckoo. To wit, I will read the replies.
What a strong man does then is quit trying and drink.
If John Doe or Juan Perez or Laqueesha Brown or Hmong Tet etc can lose their house, then the Hedge funds, CITI and AIG can lose theirs. Paul Krugman can take his Nobel to the pawn shop, and the ratings agencies can go to jail. So can whoever blew it at the SEC.
The problem wasn't adverse outcomes, the problem is the adverse outcomes were 'unequal'. The criminal masterminds can go to jail, certainly mr. mozillo at Countrywide.
Now in truth history suggests that having avoided Jail, they'll now ride the Trumbrels.
Which explains the panic, stealing the election and all the rest.
You are not looking at a government of genuine thugs taking power, no.
We'd be better off under genuine thugs, they understand consequences.
You are looking at spoiled and usually old, privileged all their life over-promoted bourgeois criminals who are terrified, and every response and action, word demonstrates their terror.
They were of course never afraid of Trump, they were afraid of his voters, of a nation that would go against the elites.
How many years is Trump going to be the whipping boy of the unprincipled left? Let me remind you that some moron named Obama was President for 8 years and his “wingman” didn’t prosecute anyone. Bang on him for that. As to Wall Street, they heavily backed both Hillary and Biden over Trump. Hmmm. Wonder why Obama and a holder didn’t go after them?
Rick I was talking about 2008 in the first two paragraphs.
After that I talk about the present govt, Biden's.
The link between 2008 and 2021 being;
"Now in truth history suggests that having avoided Jail, they'll now ride the Trumbrels. Which explains the panic, stealing the election and all the rest."
I'm not leftist, as explained earlier I'm so right wing I floss with steel wire.
Trump was not blamed above by me.
He's gone, he tried, he failed. This govt can't be reformed.
These elites are quite beyond saving.
My only mention of Trump being they're afraid of the voters, and the nation.
I'm not principled at all about politics now, the Constitution is destroyed by counter-party treachery - I hold my Oath...abrogated by counterparty.
Now we can live in a country with oh..a few million, and a few million more like me...noticing the Capitol only stands because of Troops! Whee.
Actually...my Oath nullified... I'm FREE!! NIHLISM HERE WE COME !!
If you don't like government by train wreck neurotic criminals, lets try government by Condottieri ! WHEE !!
I agree with you to a point.
1. You need to know you should have a lawyer and then you need to be able to afford one.
2. Mortgages should NOT be so complex you need a lawyer.
3. Part of the problem here is that at the same time this crap was going on the same Wall Street firms were pushing for whole industries to be pushed overseas to China wiping out jobs.
4. The 30 yr mortgage as it is built today is a disaster waiting to happen. The days of working steadily for one or two firms for 30 yrs are gone. People today are going to have ups and downs in income and stretches of months without work as automation takes over. Even lawyers and doctors are soon going to be finding themselves at risk. Already seen a large loss of autonomy and drops in relative income for those professions and it is just going to get worse.
5. It took 2 to tango but the only ones left to suffer were the borrowers. The finance guys were too big to fail or jail as Holder told us. SO, half the dance pair got screwed while the other got richer. We could have just as easily given the money to the borrowers so they could then pay the banks. Oh....THAT would be a moral hazard.
Bottom line, with what is coming, the old way of thinking about the economy is gonna have to change. The reliance on stable incomes and economic growth to solve the issues of sheltering, feeding, educating and providing healthcare to a national population is just going to have to be rethought and that is going to have to include how we view the possession and application of capital. Aging populations. Gig work. Offshoring. Large scale automation whether in the form of robotic process automation or production automation, the decimation of brick and mortar for the internet, expert systems to replace lawyers and doctors, all these are going to massively disrupt the old order and make it much much harder to point to people and say that their circumstances are their own fault when in fact the environment they are coming out into has made their very existence unnecessary.
In our system, people are "human capital stock" or "consumers" or "taxpayers" but never citizens anymore. They are inputs to the economy, not valued simply for being human.
The point of all of our systems, government, law, capitalism etc. is to provide for the most number of people possible the best possible life. BUT..the system is broken and antiquated and it is failing to provide what it did in a different, less technologically advanced, time.
BUT..ultimately the PEOPLE are the WHOLE point. Capitalism for its own sake is a waste. Democracy for its own sake is useless. Democratic Capitalism that fails to provide for the needs of the nation is a failure.
If you can’t afford a lawyer, you can’t afford a house.
Mortgages need to be complex for lots of reasons. There are legal consequences to borrowing so much money on a recourse basis secured by your hime. This isn’t a simple process like most other purchases and moreover it represents the largest investment most people will make in life. Most people aren’t financially sophisticated. And loan products have gone from conforming loans to all sorts of options that are highly complex. You can’t simply outlaw all but confirming loans,
Outsourcing is not just a product of evil corporations outsourcing manufacture. It is also a product of government policy. China, the biggest beneficiary uses the equivalent of slave labor salaries to reduce costs. India too. And both countries pollute up the yang yang, but Obama and Biden foolishly allowed them to continue to,do,so,in the Paris accords. That’s just stupid and it reduces loads of costs.
On the other hand American companies are subject to huge and costly regulation, much of which are politically driven rather than otherwise. The left’s alliance with labor unions prevented them from aligning labor costs with competition, to a large degree. Here’s an interesting story - Pittsburgh Plate Glass (PPG) sought to keep their labor costs for legacy employees whole while creating a new tier for new hires. That resulted in a bitter 5 month strike thst still didn’t resolve the issue. Ultimately, the company thst invented modern plate glass and safety glass for cars exited the glass business, selling it to a Mexican company that was free of this kind of nonsense and hyper regulation. Now PLG Imdistriesmsells paints and costings instead.
The US under Clinton responded by granting China MFN status instead of hitting them with equalizing tariffs that would have kept the jobs here. Oh, and they also welcomed them into the WTO. Primarily fo dirty campaign contributions.
And they did that knowing that China was an economic bandit. Clinton had to know what the natural consequences of doing all this was, but he wanted the dirty money. And presidents come and go, but guys like Xi stay for decades. The first guy to call China out and impose realistic policies were banged by domestic political opponents because they want power - regardless of the effect upon the citizens.
And you wonder why any company would not export jobs to the lowest cost provider??
Heel we all do it ourselves. Why do you think that Walmart and then Amazon succeeded? Selling low cost Chinese goods for less, putting small business out of business. Walmart has 265 million people shop in their stores for a reason - Americans want lower costs, just like manufacturers. Amazon has 150 million shoppers and 100 million prime customers for a reason.
The result is while outsourcing labor hurts jobs, shoppers don’t give a shit because they shop on price just like manufacturers.
And how many people say, I’m buying American cars? I walked my dog today for two miles and counted the cars. 184 foreign cars, 71 US cars. Not so long ago, foreign cars were novel in the US. You’d see the VW bug a lot and a few other cars. Repair shops advertised “foreign cars” as a specialty. The first Honda in the early 70s was a shitty little tiny car a bit larger than the crazy Smart car. They and others grew massively. Why? Because they were cheaper at first. Quality came later. But you don’t hear about how the people buying these cars were hollowing out the US manufacturing base and causing massive job exporting.
Because the little guy is always a victim, he can’t be part of the problem,.....
The highs and lows that individuals may experience is a product of many things. But what would you do with mortgages to accommodate that? As a lender, I’d look at a person’s likelihood of job stability and decline offering mortgages to people most likely to have variable and unstable income. Thst is only business sense 101. But if they did thst, something tells me there’d be demonstrations in the streets.
And why is it the government’s job to provide food, healthcare, shelter, etc.? Why isn’t it a person’s individual responsibility to confirm their consumption to their reliable means? The central government was intended to be one of limited powers. And before the middle of last century, none of these things you see, to think are national responsibilities were performed by the Federal government. The growth of these federal programs created more need than they satisfied by telling people that they didn’t have to be primarily responsible for themselves. Now you have people who do the math and determine whether they get more pocket money from handout programs then by working. We have less needy people and more wanty people. And let’s not even get into the resulting devastation to the nuclear family unit thst these programs produced.
The people have become what they want to be. They want equity enforced regardless of effort. You are absolutely correct that the system is broken, but at the end of the day the citizens broke it. DeToquville said that America would lose its character when the citizens realized that they can be bribed by the government.
Now you have inter generational dependency. Not an accident - the left realized that if they are perceived as providing people with their needs and wants, they’ll get their votes. So they’ve kept millions captive in a soft form of slavery, dependent upon them for life’s essentials, trapping them in broken communities filled with violence, drugs and a low interest in education which would allow them to keep up with our changing technological economy and society. Funny how these technological ply challenged people all know how to use their smartphones and organized for more more more that they don’t earn.
Capitalism works when people don’t have socialist infrastructure to cripple them into dependents.
rick.. were you born retarded, or was it all that rotgut whisky and prozac? or are you just a psyop professional, gracing us all with your broken propaganda and anxious, buns up and kneeling, neoliberal boot licking?
Its it so sad-- you see it everywhere-- usually with virtue signalling and self righteous commentary. " I am doing well so I can kick those that didn't do what I did" " I am in the group I don't want this person in, because I won't be special (ie house owner)anymore" Cringe worthy. Standard insecurity and what fuels xenophobia.
It is the worst human trait. I want everyone to do well. I believe everyone deserves opportunity and equal access. What I don't believe in is predatory "salesman" taking advantage of people -- that is where some minimal regulations can come in-- like a cool off period etc . So that 79 yr olds don't get burned, so that undereducated dont get burned.
Rick does have a point, though. The 2008 crisis was exasperated in the legislature where regulations were modified or amended. Many of the loan agents were performing clerical duties, ignorant of the dire consequences. Yes, there were also those that knew it would end up badly for some, but the real culprits were on Wall Street where the risky loans were packaged in derivatives and CDSs and sold to the nearest sucker. The Tarp agreement ensured that the taxpayers bailed them out while the financial executives issued themselves obscene bonuses to add insult to injury. The Obama administration effectively endorsed the agreement by failing to go after the culprits even though Senator Carl Levin's subcommittee on investigations had uncovered considerable evidence toward indictments. https://www.hsgac.senate.gov/imo/media/doc/Financial_Crisis/FinancialCrisisReport.pdf
Yes. Virtue signaling is a pain. Please stop doing it.
Actually, as I've read more of Rick's posts, I can see he does NOT hold the lenders, and their governmental non-regulators blameless. He just points out that a LOT of the people who got "hurt" could have seen this was bullshit and avoided their exposure to greater risk than they could afford.
I have posted one anecdotal case where a young black guy called bullshit on a Countrywide offer ON GENERAL PRINCIPLES. And lo, he was not harmed by the crash.
That said, I also see your compassion for those victimized. You guys are both saying "It's not a binary situation!" and then kind of pretending the other is saying that it is. It IS possible for people to be partially blameless and partially responsible for their own bad outcomes. It IS possible that financial institutions were presented with bad incentives by government. It IS possible that politicians looked at positive (for them) outcomes of actions that were going to cause disaster.
I can see both of your rhetorical 'houses', and I'm looking for some pox.
Just look at it pragmatically, though. From the point of view of the new home buyer, even fully assuming that the bank is totally greedy and self serving, why would they approve a loan that they expect to default? They want to make money, so giving a loan to someone who can't afford it would make no sense.
What these home buyers were missing, is that the people making the loans were handing them off as quickly as possible, so they wouldn't be left holding the bag. They repackaged all of these loans into CDOs and sold them off to other suckers. They got their profits and got out before the loans blew up. I suspect that if the people who made the loans had been forced to hold onto them, this whole thing would have looked very different.
It doesn’t take a lot of losses in a financial crisis to sink a lender. Look at JP Morgan Chase. Their tier 1 capital is 11%. That’s much higher than typical capital ratios were in 2008. This, it doesn’t take a very high percentage of loan losses to sink a bank.
That’s why I get a kick out of only 6% of loans were CRA loans. That’s more than enough to sink a bank. Private label mortgage CDOs didn’t start out as subprime generators. They were just competition for Fannie and Freddie. They used the Fannie Freddie lending standards - hence the term “conforming loans”. That made them marketable and fairly highly rated by credit agencies.
The politicians led the race to the bottom by mandating Fannie and Freddie take huge amounts of crappy loans.
Between 2005 and 2007, they acquired few conventional, fixed-interest loans with 20% down. They loaded up on subprime, interest-only, or negative amortization mortgages—loans more typical of banks and unregulated mortgage brokers.
Fannie and Freddie made things worse by their use of derivatives to hedge the interest-rate risk of their portfolios. But as private-sector companies with shareholders to please, they were doing this to remain competitive with other banks. They were all doing the same thing.
Fannie Mae's loan acquisitions were:
62% negative amortization
84% interest-only
58% subprime
62% required less than 10% downpayment
Freddie Mac's loans were even more risky, consisting of:
72% negative amortization
97% interest-only
67% subprime
68% required less than 10% downpayment
These exotic and subprime mortgages made Fannie and Freddie's loan acquisitions toxic.
All this can be placed at the door of politicians like Chris Dodd, Barney Frank and George Bush. Bush mindlessly pushed home ownership. Dodd and Frank - who lost their seats due their complicity in sinking the two GSEs - fought any kind of oversight about the obvious risks that had even become apparent to Bush who asked for tighter oversight of them 17,times only to be rebuffed by a Democrat congress and senate. 17 times.
It is not an oversimplification to state that this financial crisis began, both in time frame and economic ripple effect with the Freddie Mac/Fannie Mae collapse and subsequent bailouts. In fact, AIG, a former blue-chip giant that became 89% publicly-owned after its bailout, still had many highly profitable divisions. Unfortunately, AIG was heavily involved in the insuring of sub-prime mortgage packages- mortgages that were underwritten in large part by Fannie and Freddie.
The left - the media and the Obama administration conveniently forgot that these Government Sponsored Enterprises were run by Democrats- among them Franklin Raines, Jim Johnson, and Jamie Gorelick- all high-ranking members of the Clinton administration. Gorelick had zero banking or housing experience. It was a rich sinecure. People forget that Killer Cuomo, of nursing home virus fame - was the hammer who forced Fannie and Freddie to ramp up making crappy loans.
Even after investigations brought to light bad accounting practices and manipulations of the books of Fannie Mae, prominent Democrats such as Barney Frank, Chris Dodd, Maxine Waters, current Majority Leader Chuck Schumer, and Clay Lacy claimed loudly that there was nothing to worry about- that Fannie and Freddie would be just fine!
This was the context in which the banks jumped in the same way. They started out competing on conforming loans with private label CDOs and traveled down the quality chain in sync with the government.
Sure, there were brokers who knew they were making shit loans and many Wall Streeters off,laced them quickly.
But never forget how this started
Sure, but none of that seems to really address what I wrote, which itself was a response to your claim that the home buyers deserve the blame.
I never said that they deserved THE blame. Just a healthy portion of it.
Yes, I completely agree that's what you said. I'm just saying that none of your follow up comment appears to back that claim up. Maybe you didn't mean it to, but then I'm not quite sure why you replied to my comment with something unrelated to it.
I guess I was also replying to the yippers and yappers who treat borrowers as per se victims and the government and business as per se victimizers.
And also how many banks who actually held loans - many performing well, but were under water on a LTV basis because of the economic disruption (most of which have recovered) were forced by the government to sell these performing loans into an artificially depressed market. I know of several banks thst were healthy and performing as such which were forced into TARP as a result of government forced sales.
And as to borrowers being uneducated, it’s really a product of a decayed educational system, where people graduate with great egalitarian values, are greenwise and socially conscious, but actually know very little because the subjects of the oppressors - math, science, a good vocabulary and an appreciation of the arts and sciences are pushed into the background. So they are far less capable of dealing with the increasingly complicated and advanced society of those who came before them.
I bet maybe 10% or so do it old school and those are the people we have advancing the ball now. I promise you they understand mortgages. The problem for the world is that the other 90% believe they know far more than they do about how the world works if it is to succeed, but they are absolutely and militantly willing to question what they do know. Unfortunately for the rest of us, we have to run into these 90% and they vote as well, based upon their defective leftist university experience.
No, I was replying to Rick
Look itmup
Show me your numbers and sources
Just two additional points: a) 95% of homebuyers are not aware of how the mortgage lending 'system' works; and, b) we the Taxpayers are the ones who have repeatedly, bailed out the Gennie May and Freddie Mac because our 'representatives' claim they are too large to fail. The American Middle Class gets it from both sides thanks t Congress and its cronies. By the way, have you seen the 12 foot, razor wire topped, gun toting military protected fence/wall Nancy Pelosi has had built around the entirety of our Capitol Hill? There is a reason for this.
«have you seen the 12 foot, razor wire topped, gun toting military protected fence/wall Nancy Pelosi has had built around the entirety of our Capitol Hill? There is a reason for this.»
This reason?
https://edition.cnn.com/2018/10/04/politics/kavanaugh-protests-us-capitol/
https://www.workers.org/2018/10/39345/
“At the vote confirming Brett Kavanaugh to the U.S. Supreme Court on Oct. 6, woman after woman screamed out in protest from the Senate gallery and was carried away by guards. [...] People were pounding in outrage on the closed entrance to the Senate floor. [...] U.S. Capitol Police said a total of 164 people were arrested that day for “crowding, obstructing, or incommoding.” [...] The depth of opposition to Kavanaugh was revealed when on Oct. 4 over a thousand people from throughout the country, mostly women, demonstrated on Capitol Hill. [...] At the Senate Hart Office Building, crowds saying “NO” to sexual assault and to the reactionary agenda that Kavanaugh represents flooded the atrium and every floor. Over 300 chanting, militant protesters were arrested that day. [...] There were too many acts of indignation and outrage at Kavanaugh’s nomination to list them all. [...] Outrage against Kavanaugh broke out initially on July 9 at the Supreme Court on Capitol Hill [...] During Senate Judiciary Committee hearings the first week in September, over 227 demonstrators were arrested.”
Or this?
http://danshaviro.blogspot.com/2021/01/trump-and-bin-laden.html
““Trump is one of two people - Bin Laden is the other - to have orchestrated a violent attack on the US Capitol Building in the last twenty years. (The Capitol Building is believed to have been Flight 93's target.) Both were acts of war against the United States, although Bin Laden's was a foreign attack and Trump's a domestic one. Trump's attack not only came closer to success - they actually breached the building - but aimed to do far more to destroy our institutions and way of life. Bin Laden's was a raid, meant to terrorize and provoke a response that would feed further escalation of ongoing global conflicts. Trump's was meant to decapitate the legislative branch, with accompanying mass murder and hostage-taking, and to put a permanent end to democratic (small-d) governance in the United States.”
There is something wrong with your software that this stupid comment gets put on top just because a lot of people comment about how stupid it is. Can this be fixed as it seems to me it just foments stupidity and controversy.
PS: Matt rules!
It's a good example of a Wall St. reply.
Or, you could note the content of the top post, realize what the many replies are likely to be, and move on. A touch of entitlement in demanding that it "be fixed" because you are very slightly inconvenienced.
It was a frenzy of flipping houses too. Everyone wasn’t mortgaging the family home. At one point, a house would go on the market, sell immediately and within weeks be back on the market with no improvements but ten thousands of dollars higher.
It was a lot like the overvaluation of GME.
It was that and more. People would use their homes to cash out on bubble equity to pay off credit cards (only to run them up again), to put in desperately needed swimming pools and other additions, and more. People were attracted by initials teaser rates and were too stupid to see the cliff they were headed towards a year or two down the road. Others just always wanted a home and were blinded by that want to not look to close. We got the house!!!! There were clearly people who HAD to know better - thousands and thousands of people who were paying no income tax and were getting refunds of the earned income tax credit bought houses with these loans. How in the world did they ever think that they could manage a mortgage?
I really think, despite some formidable posting, you have missed some basics - let me give you the view of a 10+ year corporate collections experience - including GC Services (owned by a family tight with the bushies - and as such a principle industry consultant in drafting the Fair Debt Collections Practices Act in the waining days of Jimmers Carter)
It wasn't a 'housing crises' or bubble - it was a CREDIT CRISES - AND - further - despite my limited experience on the 'goon squad' - I have been mentored by an Uncle who was a second generation Cleveland Banker - who BELIEVED in the kind of investment banking that you seem to believe still exists - when it no longer does.
Credit and credit availability - a recipe concocted via the worship of the libertarian right - from resurrected Ayn Randers to the Milton Friedman post 'free to be/sell me this pencil' influential crowd - to the globalization of central banking - so much so that between the rough parameters of the FDCPA ('78) - and the Reagan years when financial deregulation promoted the reinvigoration of American Capitalism ( and the initial rise of Trump the entrepreneur) - an entire generation grew up with loose - widely available and cheap - credit.
This loose credit built the current edifice REX - a second gilded age in America - extreme wealth - and - the (seemingly) ending of the once great majority striving because of wide opportunities [you Rick imply still widely exists - while MT and his readers here - myself included -disagree emphatically ] ...MIDDLE CLASS - of which -as anyone in collections can tell you - whether they have encountered American Express's BLUE BOX VALUES or not - there is an easily recognized and likewise understood pattern when debtors default - IE - by the choices they make.
1st - low hanging dying fruit - like the sears card or the gas card.
2nd - cell phone or land line...
Orchard credit - then Discover - THEN MASTERCARD/VISA MBNA ECT
LAST - AMERICAN EXPRESS (ALAS)
THEN THE AUTO...
AND LAST BUT NOT LEAST - WHAT USED TO BE THE BEADROCK - ESPECIALLY SINCE FANNIE AND FREDDIE AND A FELLOW BY THE NAME OF Petie Lynch MERGED THE OBSESSION FROM BUSH THE FATHER ON DOWN TO THE CLINTON GLOBAL CRIME FAMILY TO LITTLE SHRUB THE KING OF TEXAS TO OBUMMER TO THE GREAT DISRUPTER AND NOW THE BIDEN CRIME FAMILY ALA OBUMMERS 3RD TERM.
Namely - that home ownership was the key to middle class wealth creation and financial and hence family stability - and clearly Rick you still believe it.
I don't. I don't in part because what Lynch sold was the Mutual fund - and - that owning a home was crucial to the new means of pensioning for middle class America - the 401K - which was supposed to be the win win in American Investment banking - except - ooopsi - that was a crock.
It was sure good for Pettie and his crowd, now wasn't it? Isn't kinda neat the way those two just fit like frick and fartie frack?
The 401K was great for the EDUCATED MANAGERIAL CLASS - and a disaster in comparison with the former defined pension - that was widespread in the whispy by gone days prior to the Savings and Loan crisis in the 80's (and some of the postings on that here - pinning for Glass/Stegall & a Volker rule that never really existed in the first place)- that later bled into the Stock Market crazied Tech era and eventually - once the Techie thing landed and dust settled - the real estate fiasco.
[and is still available in the Government Unions and the Teachers to Boot - who barely teach a thing about actual capitalism - but get the DEFINED PENSION TO DO THE KNOW-NADA]
Loose credit masked declining incomes - and the beauty of it was exponential (and you still SEEM to buy the 'morality argument') - which in turn led to the debt bondage that - like 19th century WASPS viewed as self-induced drunken and libertine self-destructive behavior of the Irish - was now in the 21st 'living beyond their means' - and monetized the screw job after screw job while the hoopleheads just 'keep digging.'
Go back and look at the crushing commodities market (before price supports - a 'New Deal' anachronism the Kochs and Austrian School cool kids have been trying to shutter for decades now - just as they have Social Security via privitization) - and the Gold Vs 'free Silver' political fights - and the toxic views on immigration - and so much more and Today it is Big Tech the global Party of Davos not the Monopolies of Standard Oil or the Railroads.
And I know this is simplistic but bear with me. I believe in capitalism - but with rules Rick.
We are not living through some minor bumps in the road - or some metaphorical 'hair on the wall' hiccups - Taibbi's been on this a long time and it's part of why I'm hooked as a fan boy- he is so much more right than wrong.
MT as a writer sides with those I once viewed as harshly and as cynically as it seems you do - but that was over fifteen years ago - when it was still a literal gold rush in the collections field - and why was it a gold rush - because the credit was still flowing - and now it cant.
American Investment Banking didn't 'blow itself up' in 2008 and we haven't just been screwed by Dodd & Frank and ect - that is really simplistic Rick - and wrong.
American Investment Banking sold us out BECAUSE IT WAS JUST TO *&^(iNG tasty to play Jack Sparrow and go 'a Pirating' the world over {especially with all that money the statist 'hybrid' Chinese were throwing at them - in the loose money world the west created }- making the de-industrialization of America - the ending of widespread opportunity for the next generation - all of it -a deliberate orgy of greed and nothing new - except in scope.
Both parties - until Trump ripped the scab off the great fantasia. Leaving both sides desperate to off him and the populism he recognized and road.
Global financialization is in most respects globally designed and led BY AMERICA - BUT NOT MY AMERICA - it is only now that - since 2008 - an awakened American populism - from the right and the left - just as it did in the late 19th century - has awakened to the threat it poses to both financial and personal freedom.
It's awakened for the same reasons it did before - even if this time its not about child labor and choking on coal dust or brain rot from mercury or lead. Americans do not decline gracefully or willingly - despite such erudite directions from the Kennedy School over Gov or even the Hoover Institute clowns in the Journalism department.
Americans fight back. But first they had to figure out WHO was SCREWING THEM, and how.
That is Trumps real legacy.
The middle class has seriously shrink, betrayed by the left, its so-called protector. The left uses its protectees very much like the coward who puts a woman or child in front of them as a shield from his opposing gunman. They really never cared about the middle class, women, blacks, browns etc. these groups were simply useful tools to a political end.
Globalism is the biggest reason why so many middle class jobs have gone overseas. One is a quirk of fate - only our industrial base wasn’t flattened in WWII. Most of the others had to rebuild from the ground up and did so with modern processes and equipment. More importantly was that Clinton sold out industrial America for dirty campaign money and in exchange, gave a corrupt China MFN status and admitted them to the WTO. He knew they used poverty and slave labor as a trade weapon, that they polluted massively and that they manipulated their currency. He betrayed the middle class. Just as he did in repealing Glass Steagel, making the financial sector a ticking time bomb.
Jobs were exported as a result of lower cost opportunities in China and India. It didn’t have to happen - equalizing tariffs could have legitimately been put in place to take into account their slave labor pay rates and heavy pollution. We didn’t HAVE to over regulate like Big Brother making it unappetizing to do business here. We didn’t HAVE to maintain business income tax rates that were so uncompetitive. The whole tax industry of transfer pricing - shifting revenue overseas - exists only because we have been uncompetitive here.
That is what killed the middle class - a purposeful decision to become incompetitive.
Pensions? I don’t blame business a whit in shifting the investment decisions and risk by shifting to a defined contribution plan from a defined benefit plan. It makes sense to insulate a business from the vagaries of the stock market. That’s not their business. Fort hose who haven’t, they tend to suffer under the unfounded liabilities - government plans being exhibit A.
The family unit? Sure having a HOME helps. But not necessarily a house. It’s about a mom and dad, with at least one of them working and setting an example to children as well as providing discipline in its many aspects. That was destroyed by the left with LBJ and his great society where people were encouraged to become dependent rather then remain independent, to break family units apart because they get paid more with more babies and no man in the house, and by inviting more dependent people from our southern border to cross freely, importing more dependents who will vote for them.
This is what has decimated the middle class.
https://amgreatness.com/2021/02/07/our-animal-farm/
I just got this a you sent it in my inbox because I'm on Am Great - adore VDH - a national treasure (been hooked since 1st reading Mexifornia in '04 or abouts - and I live in AZ). Also - CONRAD BLACK is my boy.
Ya!!! Fuck everyone!
The bank has a fiduciary duty to loan insured deposits to good credit risks. Part of performing this duty is to bring some skepticism when evaluating loan applications. It's the market's job to make people want things we can't afford. It's the bank's job to say f**k no.
So, the Congress is as guilty of having being stormed as the protesters, since it takes two to tango
Couldn’t you have been more creative
When we bought our home in 2003, we chose to buy a home on the less expensive side, even though we “could have qualified for a home worth double that with YOUR incomes” said our bank loan officer at our credit union... We chose a 15 year note, paid it off in 12 years, and are happily retired, early. But people aren’t taught basic financial information in school and often, not at home while growing up either.
Oh fuck, this trope again.
I always know that the person opposing my views has acknowledged loss when the wheel out the leftist lingo such as “trope”. I’m just surprised Yu didn’t use “dog whistle” or “gaslight”. Soon you will begin to repeat “equity” ad nauseam
As my mother said to me one time after making an unwise investment, “The nice lady at the bank...”. This is a question of trust, not “stupid borrowers.”
On point with this article, the financial and political elites have no clue how much average Americans of all backgrounds were affected by the 2008 crash, and now it's happening again and worse for millions of people during the pandemic. Your line about bailing out banks, but letting restaurants fail, captures perfectly the orientation elites have: top-down, and themselves first.
First and only.
Something about this article made me finally start sending you money.
Once again, you are "dead on" Matt. I am a small town lawyer in Central Florida. The grief, mayhem, disaster and insults I have seen heaped on the hapless (former) Middle Class by the banksters, mortgage brokers, mortgage companies, crooked appraisers, and many others over the past ten years makes me want to cry. All this was aided and abetted by our so-called "representatives" in Congress. I could go on for hours, with stories such as you have related, and worse. But to what end? Nobody is punished, nobody goes to jail, a few laughable fines are handed out and no wrongdoing admitted. May I remind all that, while the Mortgage Bankers Association in Washington, DC was scolding and whining about immoral homeowners who just walked away from mortgages they could no longer afford to pay in the 2007-2009 subprime mortgage meltdown, the Mortgage bankers Association proceeded to do just that with respect to the financing on its newly completed taj mahal headquarters in DC. Such hypocrites. Oh, and by the way, all the same things are happening all over again, even as I write this.
It's like sending people credit cards in the mail, telling them they are so easy to use, only have to make minimum payments, then telling Congress it needs to make credit card debt non-dischargeable in bankruptcy because those who sent them out are being hurt by delinquencies. Same with signing up folks for credit card when they shop--give a one time 10% discount if they'll take one. Same w/college loans.
INCREDIBLY astute UGA Olditimer, but you missed one part in the scam set up by the banksters and their buddies in Congress, and it is this: make the interest on Home Equity ["HELOC"] loans tax deductible and then go out and market these to the folks drowning in the debt you promoted as a way to "tap the equity in your home and consolidate/pay off all of credit card debt". Voila unsecured debt, formerly dischargeable in Bankruptcy, now becomes debt secured by the roof over the Debtors' heads. When the economy went south, then the poor shmucks (and their their children) lost their homes to the banks in foreclosure. Post foreclosure, these homes were then sold to 'special investment vehicles' set up by the banksters and their Congressmen buddies who promoted reckless credit card spending, promoted the HELOCS, and then foreclosed on these HELOCS, as (wait for it) rental income investments. A "three bagger" as they call it in the sports world. All this is "God's Work" according the the Hedge Fund owners. I would love to have had these these folks doing "God's Work" (self proclaimed) in my car as my wife and I drove through Kissimmee, Florida past derelict motels stuffed with dispossessed families with their children lined up outside waiting for the school bus. Financial crimes have consequences and I saw them, in spades, with my 'own lying eyes' as the saying goes.
Well described. Then, the foreclosure paperwork lies.
New York magazine is a rag for yuppies, and yes they still exist. The only thing they are good at is gauging the sentiment of a small set east of 9th Ave.
Putting on progressive clothing is one of the silliest gambits I've ever seen establishmentarians pull. And if you needed any more evidence that the Democrats are now the party of the establishment and Wall Street, it was the portrayal of WSB as a Trumpist movement.
Levitz is usually pretty excellent. This is a serious miss for him. I think reporters never leaving their house due to pandemic and being in the Twitter bubble is seriously distorting their perspective of reality (I think Matt was falling victim to this for awhile).
This is so true, and it’s a good idea to relax our standards a bit. Everyone is coping with anxiety right now, consciously or subconsciously.
My shit is completely out of control. I try to not spend too much time on the internet.
[Rick Perry voice] Whoops.
LOL!!! so true-- even their what's on section SUCKS and I used to read it before visiting friends in NYC few times a year. Used to read James Chait (?) but nothing in the last 5 plus years has been any good. Kind of a People magazine for the very superficial
NY Mag's long reads, although aligned with the concerns of anxious yuppies, are often pretty excellent. I'm in the middle of this horrifying report, which speaks to the dreadful consequences of lockdowns on children. Seems an issue that is important to you - take a look if you can stomach it (I say all of this with sincerity)
https://www.thecut.com/2020/11/covid-19-pandemic-kids-mental-health.html
Thanks for the suggestion. 💗 I am a bit boring about medical things-- I go with my professional sources and my patients experiences here in Canada. Even lockdowns aren't comparable-- people are too different in their reactions to it and the supports provided are different in different countries and even within each country. On top of that I am crazy busy these days dealing with the mental health issues and keeping up on reading JAMA etc. pieces coming out about the uselessness of masks etc. There is too much MSM reporting on things they haven't a clue about and are too lazy to go beyond official narrative sources.
Thank you for this. I would be interested in checking out some of the articles you mention about uselessness of masks. A friend's husband got Covid very bad; they live in a small 1BR apartment and were unable to quarantine; and my friend never got Covid nor does he have antibodies. For some reason that deeply disturbs me. (BTW I think Covid is real)
Although I don't believe masks for adults or people with COPD are useless, I believe this short video puts them in perspective: https://off-guardian.org/2021/01/31/watch-a-tale-of-two-januarys/
I should add my friend is white and his husband who had Covid is Native American... this aspect of their situation also is very disturbing
Why? Not sure I follow the thinking, or feeling, behind that reaction.
It's a big club and we're not in it...
Its a small club numbers wise. It wins because ‘we’re’ not a we, they are their own “we.” They are organized, we are atomized.
What a terrific pair of articles. I know now about the situation from 30 minutes of testing this Substack then a week of looking at financial pubs and sites. There's a reckoning underway. Americans are a savvy and brave and reckless bunch, and even if you don't believe in the deep state, the actions of the entrenched are really pissing people off. The sandwich shop analogy was spot on, and we all eat sandwiches.
Great reply, Matt. The mainstream media is just plain terrified. They have children in private schools, mortgages on their houses in Montclair and Pelham Manor - and perhaps are even more terrified for their egos. What if they don't get invited to the correct parties? They all know (even if the don't admit it to themselves) they could be the next one cancelled for wrong-think. So their defense is to scramble around and try to be on the winning side. Welcome to totalitarianism.
Excellent points Polly! I would expand that group of MSM to include the large institutional administrators-- they are 24/7 fund raisers for their behemoths and get paid 7 figures (with bonuses) to do so-- their educational or health admin functions are a distant second concern. They become institutionalized apparatchiks to whatever governing bodies/govts regulate/control them.
Yes.
Which Montclair? I'll presume it's not the one for which my dad served on the city council for 12 years.
The Montclair just south of Springfield. :)
In 2007 I got out of the stock market. I told my brokers, "Only triple A rated treasuries ands munis for me." One day my New York bankers put me into their AAA rate MBS at face value and then devalued them to basically 0. I was broke. The Gov't stepped in and settle the legal battles at less that 1c on the dollar. Multiple my case by millions of investors, pension funds and savers. Under Reagan 1200 bankers went to jail for the S&L crises. 0 under Obama.
So I did another startup, built it up, sold out, and went into rental housing for a retirement business. Then Covid, and the eviction moratorium. All my tenants lost their jobs but we worked it out after a few months. We worked together. Only two simply refused to pay rent any more -- the two who didn't lose their jobs, they eventually moved out, moved in friends, in one case to use the house as a dog kennel, completely trashing it. I was helpless to do anything. The rent moratoriums started in April. They won't end until next September... In NYC a third of tenants are behind. 20 million households in America. There is a piper yet to be paid.
All of this because of lockdowns that even the WHO now says were ineffective.
There is a lot of anger out there from conservatives like me, from small business people, and from people like my tenants. We don't give a fuck what pronoun you want to be called by but we do care about fairness. We are tired of playing by the rules, working hard, being successful and having it all stolen.
Someone will put these coalitions together.
Yes the piper has yet to be paid. Agreed-- call it the Fairness Coalition. Ironically this COVID BS is exposing the fallacy between right and left issues-- there are none-- here are only HUMAN issues, values and principles. I am starting to see these coalitions here in Canada. They are growing. BTW-- thanks I forgot the Reagan put the S&L people in jail.
Its a scam. All of it.
How about a coalition of Nihilist willing?
Well said.
Of course, a huge role in this crime against population has St. Obama and his equally disgusting Wall Streeter Eric Holder. The general population is still not aware about the extent of Obama's "Hope and Change" fraud
-- from "Banks are too big to fail",
-- to the scam of the century -- Russia-gate hoax that still continues with the lying team back in power
-- to Venezuela as an existential threat to the US “Venezuela is fundamental threat to USA” -- declared Obama formally initiating regime change.
What despicable Obama and DNC+GOP oligarchs meant is -- “Socialism is a threat to capitalism”… hence imperial War-party endless wars -- against “godless” Bolivia, Nicaragua, Venezuela, Syria, Cuba, Libya, China…..
Wars are immensely profitable for leaders and donors of both wings of the US War Party.
US "99%" population is to milked, controlled, keep silent by censorship and distracted by "gay and abortion wars"...
Bravo Matt for your decades of work !!!
The most dangerous group in the country is marxists. The second most dangerous group is libertarians.
The first group is dangerous because its constituents somehow fancy that a large public bureaucracy will somehow facilitate public financing for the benefit of the many or outright control industry for the benefit of the many, even as all evidence points that politicians are selfish scumbags that almost never do the right thing, in any country and in any environment. The Marxist will screech BS, that this time it will be different, somehow the centralized bureaucracy will be kept in check and will somehow act for the greater good. You can point to the current state of affairs and show that every bureaucrat is paid off, and almost every regulatory body, including the ones governing higher education (the pinnacle of left wing thought), exercises it’s power for the benefit of the regulated or those facilitating the regulations. Magically, somehow, if we get rid of capitalism, the sociopaths who are drawn to these positions of power will vanish, and benevolent Christ like figures will run the government.
On the other side of the spectrum, is an almost as odious group of cretins: libertarians. For these cartoon characters, the United States doesn’t have a history before WWII. A naive population was manipulated by foolish or evil politicians to accept big government as a substitute for the benefits of regulation. Any argument that points out that if a society permits stratospheric wealth concentration will inevitably lead to extreme corruption is met with with the tired, tried and trite response that “oh you see, if the government wasn’t big, capitalists wouldn’t have to pay off the regulators to gain unfair advantage.” On this point, I’ll give the devil his due: the Marxist will accurately point out that this is ludicrous, flying in the face of history, and that government doesn’t grow or get captured as a result of misguided public perception, but with careful construction by the capitalist (really, fascist) oligarchy. The libertarian forgets that every single US state, including the slave holding south, prohibited formation of corporate entities UNLESS the state legislature approved it and the corporate charter EXPRESSLY stated how, in exchange for limited liability, the entity would act in the public good. This rule was in place because if you grant limited liability without a countervailing balance, there is no free market because there is no market without consequence for every negative action. The libertarian forgets that when the robber barons paid off almost all of the states to get rid of this regulation, the problems first emerged: enormous crimes, huge environmental consequences (see Montana and the copper king), etc. The libertarian ignores that pre-Marxist scholars indicated that the modern corporation marks the end of capitalism because there is no limited liability in capitalism. The libertarian forgets that once the corporation ends the free market by enabling the privatization of gains and socialization of losses, even a bare bones government is going to be compromised. The Copper King bribed his way to the US senate by paying off the entire Montana legislature, which in turn ended the election of US Senators by state legislature (I single this guy out, but he isn’t close to other evil bastards of the first fascist oligarchy that took over the country). The libertarian forgets that it was the super rich bankers that paid off Congress to enact the Federal Reserve, which in turn spawned undo credit, which in turn lead to two world wars and a Great Depression. For the libertarian, history begins in the 1930s and 40s, when Americans, not quite sure how they were getting screwed beyond belief, demanded a check to this madness and the era of big government began.
Of course, neither the Marxist or the Libertarians want to get to the heart of the matter. Marxists don’t want to get to the heart of the matter because their real motive is replacing the fascist capitalist oligarchy with a “benign,” “caring,” and “socially conscious” Ivy League educated bureaucracy, you know, like tenured boomer professors that constantly advocate for self sacrifice and what not, as they pillage the public treasury with guaranteed student loans, etc. Most libertarians don’t want to get to the heart of the matter either because to them the only thing that matters is not taxing capital because the only thing that matters is capital; for instance, a pornographer (nothing wrong with porn, just laughing at the right wing association) making a million dollars a year from a website should absolutely be taxed at a far lower rate than a pediatric neurosurgeon making the same because the former is a job creator who takes risk and the latter is just a unit of labor (market value be damned at the end of the day).
And with this long winded rant I arrive at what is the heart of the matter: any collectivist entity that has the capacity to externalize its costs must be heavily, heavily constrained by another force. This country’s sin is the distinction between private and public. The distinction is between individual and collective. A government can externalize its cost and tyrannize. A corporation can do the same. In both instances, the social science is clear: sociopaths are attracted to these entities because it allows them to get wealth, power and prestige without accountability to laws or markets.
The US constitution did a great job constraining government (for a while). A second document similarly constraining private legal entities should be drafted and executed. Oh, you don’t want constraints because, gasp, free market? Fine, set up shop as a sole proprietorship, like businesses did between 1776 and the mid nineteenth century. What’s that you say? That’s not practical? My reply to that is something that starts with “F” and ends with “U.”
Yeah clearly the libertarians are the problem, as the state swallows up everything.
Lol 😆
And, may I ask, who facilitated the increased size of the state? The first radical expansion in federal authority happened at the behest of and was subsidized by John Rockefeller (ICC). The Federal Reserve was financed and facilitated by bankers.
It’s the same thing with you fellows, living an idealized world where the vices of the wealthy extend no further than rational greed, provided we leave them alone, when a plain look at history reveals the contrary: the super wealthy want total control and power, no different than politicians. When the wealth aggregates as it has done today, they usually achieve their end and society crashes.
But yeah, the state is growing not because of billionaire cretins financing its expansion, but because stupid proles that vote the wrong way... sarcasm off.
It's clear you don't know the first thing about Marx
I don’t understand Marx in the way I don’t understand libertarianism, and the associated smugness of both groups ignoring how something looks in practice , rather than theory. Everywhere it’s been tried, it’s failed. The reason is that to accomplish the goals of Marxism requires a large collectivist entity, eg a huge government, to redistribute resources. The people attracted to such entities are always and without exception the worst humanity has to offer. You can rant on some theoretical diatribe on how it will be different, but it’s going to be the same thing: those who seize the power to redistribute will redistribute for their own benefit.
When I say you don't know the first thing about Marx, it means you don't know the first thing. The end goal of Marx is to abolish the State. As for the administration, it can fluctuate according to the circumstances. China has a huge economic success, lifting millions of people out of poverty, something ignorants like you scoffed at being even possible. They took means that didn't come out of Stalin's book so you got caught by surprise.
As for the notion of « those who seize power », it depends on how much the people are implicated in that. But it's clear it's too complicated for you. And it's no wonder. You don't have enough sense to learn about things before commenting on them
When you say I don't understand Marxism, you pull the statement right out of your rear end, like other Marxists.
"The end goal of Marx is to abolish the State."
Really? Wow. Milton Friedman also advocated abolition of the state or its minimization to such an extent so as to be completely ineffectual. In reality, IN PRACTICE, what happens is that those that accumulate the wealth, purchase or resurrect the state and subsequently expand it for their own benefit. Oh of course, if you point this undeniable fact to them, supported by the last 150 years of history, they will also argue that "you really dont understand capitalism, we didnt go far enough, we didnt gut enough." Its stunning to me how so alike the two groups are, despite professing vehement disagreement.
"You don't have enough sense to learn about things before commenting on them."
I could point to the litany of historical examples, including but not limited to North Korea, the USSR, and yes, even China (more on this later). You aren't going to care. You are going to tell me that isn't Marxism, we didn't go far enough, we didn't do enough, etc. Or, alternatively, in more brazen situations, you'll identify one singular thing those societies accomplished that was better than post WWII America, ignoring the other parade of horribles, and just state its better than what we have or had. It doesn't matter to you what the doctrine looks like in practice, like a teenage girl enamored with a handsome serial rapist, you just look at the beautiful exterior, namely, the fact that the words of marxism and the idealism on paper just feels so good. By the time you are in the hotel room and the door is locked its too late, but hey, lets go one more time, it will be different this time.
" China has a huge economic success, lifting millions of people out of poverty, something ignorants like you scoffed at being even possible. They took means that didn't come out of Stalin's book so you got caught by surprise."
Indeed, they didn't use Stalin's playbook, well except in the beginning, when the Maoist regime successfully killed more people than both him and Hitler combined. No, I give you that, they've adopted the strategy of a more effective champion:
“The Capitalists will sell us the rope with which we will hang them.”
― Vladimir Ilich Lenin
Of course, I have to disagree with our deceased glabrous friend on the term "capitalist," there's no such thing, just like there's no such thing as "marxist," at least as the two doctrines exist in practice. There's just different flavors of fascism, and they absolutely did figure out to use our private fascism to benefit their public fascism. I'm curious though, if the result is lifting people out of poverty, without consideration of the means of doing so, what's the problem with the present state of affairs? I mean, without Western Capital and know-how, there is absolutely no chance that the Chinese would have been able to achieve what they achieved. The proof is in the pudding, until they opened up to the West, they were one of the poorest countries in the world. So, in reality, our libertarian friends our correct!!! "Capitalism" is the greatest system ever! Globalization is amazing. We just have to go as far as the Chinese did. For instance, a few million Uyghurs making Iphones for less than a dollar a day is what we have to do over here. Why don't you like Trump? He said wages have to go down? We can be like China if we drop our wages and increase the use of slave labor. We can even have the factories in a nice location! Don't take it from me, just listen straight from the horse's mouth:
https://www.youtube.com/watch?v=DwBaL-5o1oc
I think though, your comment below regarding the intermediary step involved to facilitate your utopia really gets to the heart of the matter both as to what really happens when your murderous doctrine is applied and what is really the hidden driver for people that advocate for it.
You've established that you'll resort to anything except the obvious, that is, reading Marx. Since you don't care to know what you talk about, this conversation is pointless
Fantastic and substantive response, thank you for the edification. I will go and read Marx and ignore how his doctrine has been applied (numerously and diversely) throughout history. We will figure out how to apply the doctrine next time (or twenty times) in the future.
"resort to anything"??
You mean, like, actual history, actual observable facts and acknowledgement of actual human nature.
Yeah, a 19th century book that seems more to indoctrinate than enlighten sure trumps those stupid things.
Say what? Marxism's goal is the abolishment of the state, and the current government of China is your example? You're right, that must be pretty complicated.
If you're surprised, it's because you don't know what you're talking about. Yes, you have to establish a socialist state which will pave the way for the abolition of the state. First, it has to restructure society in favor of the working class, then abolish all classes
"Yes, you have to establish a socialist state which will pave the way for the abolition of the state."
I LOVE IT! Sounds like a spectacular idea. And I'm sure you will agree, that the people in charge of that intermediary situation are one hundred percent going to exercise that power for the working class, and not for their own benefit and without ever ending that intermediary state. Because, lets be honest, the trend of human history is that folks saying they are going to do great things for the mass of people almost exclusively do so, they don't rob, pillage, and steal. Incidentally, can you explain to me why the key members of the Chinese communist party and their children own prime real estate in New York, Los Angeles, London, etc., and engage in the associated bourgeoise debauchery usually inherent with such living spaces instead of spreading the wealth around to the Chinese working classes? I mean, I don't get it, If they sold those apartments, maybe those Uyghurs can get an extra meal a day. I am asking for a friend of mine who is as ignorant as I am because when we engage in these transactions (namely selling prime real estate), we are perplexed that the individuals purchasing these palatial estates aren't just Chinese entrepreneurs, but for some reason, in the majority of circumstances, they are key government officials, and when complaints are proffered to the management company regarding the drug infused orgies attendant to the same, when someone goes to look inside, I have never seen a member of the Chinese working class in those glorious adobes, no for some reason, its either a communist official or his prodigious scions. I mean, Beria was also an anomaly in this respect I suppose, but you understand these issues better than I do, and can probably explain them to me. I suspect though, that you are just going to tell me you don't have the time to deal with me, even though you have the time to respond to everyone's counterpoints in minutes, but hey, you never know.
But in truth, both I and the other individual understand "marxism" quite well. REVENGE. Revenge on the competent. Revenge on the hard working. Revenge on those that tried harder, worked harder, were better looking, got lucky, etc. When the revolution happens, in your mind, those that managed to get a better deal than you will get the shaft, and you'll look down at their corpses laughing. You are going to show them. Hey, who knows, maybe you'll even be part of the group in that intermediate step... you know, the one that is going to do all those things for the "greater good."
The only force that rivals your thirst for revenge is the thirst of the "libertarians" for domination. Oh, they'll point out to me its not domination they are after, I just dont understand capitalism and libertarianism. And yet, when I look at the champions of capitalism, on this blog or others, they'll always tell you they disagree with banker bailouts, fraud, etc. But, that never seems to bother them as much as some poor son of a bitch that trades time for money not understanding his mortgage document, his credit card interest rate, or some other usurious perversion of our present economic system. They'll throw a sentence or two condemning the banker bailouts, agree someone should have went to jail in light of a couple of hundred criminal convictions attached to corporate entities (but not any individuals of course), and all the legion of other bullshit going on right now, but after the brief flotilla of words directed to the real criminals, an armada of prose follows explaining that the real problem underlying society is the poor son of a bitch who borrowed (fake) money and didn't comprehend the underlying terms.
The only reason I don't bother responding to these cretins is that they are presently in charge of the system, and the results, contrary to their screams that this isnt a "free market" is plain for everyone to see, and they have been completely discredited. What you are selling though, most people in this country haven't experienced (although some members of my family have), and that's what makes you dangerous. A very real problem exists here, and you guys are selling a more visceral poison as a solution.
Ah, the light bulb goes on! When you say "You don't knows what you're talking about.", that translates to normal human language as "You are not adequately indoctrinated into the self-proving nature of Marxism". Got it.
You know what else lifted millions, actually, BILLIONS out of poverty?? Fucking capitalism, you ignorant tool.
Was it corrupt? Sure. Are you saying the CCP doesn't involve corruption?
Was the created wealth unevenly distributed? Sure. Are you saying the wealth generated by the Chinese economy is evenly distributed??
In point of fact, the Chinese "success" is piggybacked on improvements to human life that have been initially generated by...you guessed it: capitalism.
I mean, this is such a glaring flaw in your contention...I guess it must be too complicated for you.
I see no one briefed you about the state of poverty in the US. I suppose the tens of thousands who die each year of not being able to afford medical treatment and all those homeless veterans are a sign of great success
Love me a long winded rant!
Get your own blog.
It's a closed loop, Lord Acton's "All power corrupts, absolute power corrupts absolutely" takes over in seemingly every case. You have a great idea. But then when some asshole goes off the rails with the power he's given to enforce that second document it's groundhog day. We have to find a practical solution. I think Plato was right, need a Philosopher King, someone altruistic, and about 6'-6" and 500 pounds.
I agree. Every hierarchy and system degrades. The correct frameworks provide a longer time frame and better framework. The problem with this country is the focus on private vs. public. It should be collectivist versus individualist. Collectivist entities should not have the same rights as real people and heavy counterbalances have to be in place to avoid this mess. Governments are just one kind of collectivist institution.
But no less than the Supreme Court reinterprets the Sherman Act to make it harmless, recognizes corporations as individuals (Rockefeller on his stone pillar "supreme worth of the individual" above all else), uses the 14th amendment as protection for corporations instead of people. Richard Olney, Grover Cleveland's AG, comes up in every book as having an epiphany. Using the Interstate Commerce Act (Government regulation) against people, instead of as protection for them against the railroads. Thomas Frank tells me the great cynicism of the GOP is that they don't believe themselves, that it can be changed. So they bark at their own tails. I'm telling you, on the brink of nihilism here.
Bingo! This guy gets it.