Friday, May 02, 2008

riddle me this

So here is what I know about the subprime mortgage crisis. It seems some oh hell let's say fifty million US citizens (yes I know that's a ludicrous number but go with me on this ok?) went to the bank and took out a mortgage on a horribly overpriced home. Let's say each one of them asked to borrow a million dollars. So, that is a million dollars each for fifty million people. It's possible they could end up paying a million you see because they ended up with a variable rate of interest...really? isn't the interest rate being cut regularly? Wouldn't that mean they would be paying less? Never mind.
This group of fifty million just happened to include that group, the group that shouldn't have a mortgage, the group that really shouldn't even have a cat. But the banks never noticed because I mean what bank would right? I mean it's not like any of the banks the rest of us go to who wouldn't give us a car loan for five grand even though we make eighty grand a year in a union job. These are those other secret banks, the ones we have never been able to find but somehow people with no credit, bad credit, bankruptcy , you get it, can find instantly.
So these banks did some creative accounting. They took each of these mortgages and split them into three groups. The first group was people who would pay their mortgage..the banks kept them for themselves. They then sold off the middle group to a bunch of foreign investors who obviously were non native english speakers. The last group, the group that would pay their mortgage just as soon as they got a job ha, ha, ha got sold into a third investment pool. This pool was bought by , hell I have no idea what kind of moron bought into this pool but they did!
So the expected happened. They never did find that job and they never did pay their mortgage and now that investment pool wasn't an investment anymore. It was now the investment pool of "holy shit, have we got some shitty houses we need to sell right now". But unfortunately these guys were stock brokers not real estate agents. The middle pool full of people that kind of pay but never on time started becoming the pool of "oh shit, they haven't made a payment for three months'. And soon this pool became the new "oh, shit we have some solidly middle class houses we have to sell right now".
We all know the first group is paying their mortgages on time because the bank may sometimes look stupid but it ain't.

So, they can't sell these houses unless they declare a fire sale and cut the prices and if they do that they will lose millions and millions. But they are stupid and in a panic so they do it. And the real estate market collapses because who would be willing to pay a million dollars for that other house when the bank is selling the same damn house for three hundred thousand?
All over the prices of homes begin to fall. The problem is of course people paid market price for their home before this crisis and their mortgage reflects that market. Now their home isn't worth what they mortgaged it for. It means despite paying their mortgage faithfully for years they have no equity in their home. Their home is no longer considered an asset, it's all's all just debt. So now they can't get any credit because when their debt is calculated their mortgage gets added in and that's the kiss of death.
Without access to credit no one can buy a new car, a washer/dryer combo,renovate the bathroom..any big ticket purchase.
Without any buyers the manufacturing sector slips and falls. That is where the good paying union jobs are and they begin to disappear. And here we go again to the mortgage crisis. Without a job you can't pay your mortgage so it gets foreclosed on, the investors panic and dump, market prices tank and round and round we go.
So what is the solution here?
Well I think the idiots that invested in the second and third pools should have to eat their losses. Investing is nothing more than going to Vegas and playing poker. Vegas never offers you a buyout ok? The banks that gave these mortgages should have to eat it too. And the idiots that went to the bank knowing full well they would never be able to afford their mortgage? Well they already got pretty severely punished didn't they? They are homeless with destroyed credit and a lifetime devoted to screening their calls for rabid collection agents. I honestly can't think of a worse punishment than that other than a two week stay at Guantanamo. At least at Gitmo you get food and housing.
What shouldn't be happening is the poor bastards that are paying their mortgages being penalized severely for doing it.
If everyone involved hadn't panicked and ran screaming into the daylight the crisis would never have happened. If they had kept themselves calm they could have gently corrected a real estate market gone wild without devastating everyone in the process.
But the moment you even threaten the possibility of a threat of losses the markets goes wild and what was once a possibility becomes fact. They do it to themselves and then in turn do it to the rest of us.

The operating emotion of everything right now.
Because we all feel a low riding dread all the time, because we all feel that somehow the earth has jumped a cog and put us all off balance we are all on the edge of panic and it takes almost nothing to send us spiraling into the pit.

I think it's because at heart we are all drama queens. We are all so in love with the rush of potential disaster a real disaster makes us thrilled. We throw off responsibility for the chance to quiver and shiver, gasp and whimper always looking around for our audience.

We announce to the world we have just become victims. Becoming a victim is not unlike winning the lottery nowadays. Even when you are a victim of your own idiocy someone somewhere will be thrilled to listen to your story and the media can't wait to find you and let you tell it, for educational reasons of course.
I mean has any victim every missed the opportunity to quiveringly tell Oprah, Dr Phil, Inside Edition or Anderson Cooper that they are only telling their story so that others can be spared?

So can anyone tell me why it's my problem or your problem that some idiot let another idiot borrow what they can't afford to lend and can't afford to borrow, can't afford to invest and can't afford to lose?
Why can't all of you get together and clean up your own mess privately without involving the rest of us?
Why, it's because you all want to be the victim right? And you can't be a victim unless you have some one to acknowledge your victim hood and if you stayed private that couldn't happen right?

What the hell happened to not airing your dirty laundry to the world? Or does the hippie generation not believe they have any dirty laundry? That's it isn't it? baby boomer's are so damn self involved they think we give a shit if they take a loss in the stock market.
Here's a newsflash..we don't. So shut up already. You are the idiots that built the system, reap what you sow assholes and stop dragging us into your fuckups.

I am sick of all these manufactured crisis's. I am sick to death that there is always a group of people who spend all day every day devoted to looking for a way to throw a wrench into the works so they reap the benefits of panic.
Parasites of the system making millions manipulating the sheep into panic.

I think I may be tired of all of it. I look at the sheep and begin to wonder if maybe, just maybe it's time for a market correction on them. A thinning of that herd wouldn't really be amiss anyway.
I am beginning to wonder if it wouldn't do the entire globe a world of good to be rid of these sheep. That depresses the hell out of me. Sheep are generally kind, Obtuse yes, stupid yes but mostly good hearted but at what point do you have to demand they wake up and start fighting to preserve their right to keep their heads down pulling the grass out by it's roots and chewing thoughtfully? How long can the rest of us afford to carry them along?
Being generally cheerful and good hearted is fine but it's their skittish, thoughtless, blindingly stupid reactions to any mild disruptions to cud chewing that's killing the rest of us. It's the fact that they hate change, refuse to adapt and are always needing a minder to keep them from wandering off a cliff or getting eaten by a wolf that is dragging the rest of us down.

The sheep have abdicated personal responsibility and maybe it's time we reacquaint them with it, as painful as it's going to be I think it's their only route to survival. Honestly, I am just not going to be available to guard this herd anymore and I can't see anyone volunteering for the job. I guess they are all going to have to stop chewing for a moment and decide whether they are willing to start joining the problem solvers or stay in the field, defenseless, senselessly chewing away until someone cracks them over the head and makes them into a stew..


Post a Comment

<< Home

  • Google News
  • Edit-Me
  • Edit-Me
  • copyright harleynalice 2006