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December 03, 2008

No Wonder This Guy Isn't Popular!

Nobody I know wants to hear any of this finger pointing stuff...when the finger points back.

...You know the rest. Eighteen months later, our down payment has been wiped out and we owe more on the house than it’s worth. We’re still able to make the payments, but our mortgage rate is about to reset. And we’ve already heard rumors about coming layoffs at our jobs. How on Earth did we get into this mess?

The exact answer is different in every case, of course. But let’s round up the usual suspects:

• The predatory mortgage broker? Well, we’re certainly not happy with the bastard, given that he sold us a loan that is now a ticking time bomb. But we did ask him to show us a range of options, and he didn’t make us pick this one. We picked it because it had the lowest payment.

• Our sleazy real-estate agent? We’re not speaking to her anymore, either (and we’re secretly stoked that her BMW just got repossessed), but again, she didn’t lie to us. She just kept saying that houses are usually a good investment. And she is, after all, a saleswoman; that was never very hard to figure out.

• Wall Street fat cats? Boy, do we hate those guys, especially now that our tax dollars are bailing them out. But we didn’t complain when our lender asked for such a small down payment without bothering to check how much money we made. At the time, we thought that was pretty great.

• The SEC? We’re furious that our government let this happen to us, and we’re sure someone is to blame. We’re not really sure who that someone is, though. Whoever is responsible for making sure that something like this never happens to us, we guess.

• Alan “The Maestro” Greenspan? We’re pissed at him too. If he hadn’t been out there saying everything was fine, we might have believed that economist who said it wasn’t.

• Bad advice? Hell, yes, we got bad advice. Our real-estate agent. That mortgage guy. Our neighbor. Greenspan. The media. They all gave us horrendous advice. We should have just waited for the market to crash. But everyone said it was different this time.

Still, except in cases involving outright fraud—a small minority—the buck stops with us.

Posted by tree hugging sister at December 3, 2008 08:02 PM

Comments

"But everyone said it was different this time."

Oh God. "This time it's different" are the single most dangerous words in economics. They are a 100% certain sign of imminent disaster.

Posted by: Dave J at December 3, 2008 08:35 PM

You know, I'm so glad to read someone saying the truth: that millions and millions of people got very greedy and believed that they could get something for nothing.

Posted by: NJ Sue at December 3, 2008 08:59 PM

Yeah, Sue, but at least one isn't trying to pin the blame on "anybody but me".

Dave, that's why the words "New New Deal" scare me so. Kind of like those who still defend socialism because "they didn't do it right before".

Posted by: Ken S, Fifth String on the Banjo of Life at December 3, 2008 11:22 PM

Ken, well, maybe I'm a self righteous twit, but I frankly don't feel responsible for this situation. We scrimped and saved for a 20% down payment and took out a mortgage we had a hope of paying off within our lifetimes, barring unemployment or disability (which is what insurance is for). Now our taxes are going way up to pay for the stupid, greedy people who pushed these enormous loans and and the feckless idiots who took them out. So yes, I'm a little ticked. I saved my money to send my child to college, not to bail out Goldman Sachs. Now it will all go to the government. What's the point of being responsible?

Posted by: NJ Sue at December 4, 2008 06:40 AM

I was most interested in this little gem in the article:

"In the 1920s, the “differences” were said to be the miraculous new technologies (phones, cars, planes) that would speed the economy, as well as Prohibition, which was supposed to produce an ultra-efficient, ultra-responsible workforce. (Don’t laugh: one of the most respected economists of the era, Irving Fisher of Yale University, believed that one.)"

I am SOOO glad that I was not alive when lunatics such as this were considered "most respected economists." But I suppose we now have Paulson and Bernanke to take on that role.

Posted by: Skyler at December 4, 2008 07:30 AM

NJ Sue, the point is self-respect.

Posted by: Retread at December 4, 2008 07:50 AM