Thursday, May 21, 2009


America, we need to have a talk.

Once I bought a Triumph Spitfire. It was a beautiful little car.

Spitfire as I envisioned it.
(by bayernernst)

Problem was, everything on it was broken. And I couldn't afford to fix anything. I had just purchased a "new" home (think of the ones advertised "afraid of a little work?"), and was having trouble scraping up money to buy peanut butter, never mind a new decombobulator on the left front franzit on the sports car. I am mechanically disinclined. So the car was at Mario's or Jim's or whoever's shop almost all the time.

Spitfire as it was.
(by Rootes_arrow_1725)

I kept that car for several years, and poured about $5,000 into it, eventually. In the end I just gave it to another young man who wanted it. I was grateful he took it from me. In good conscience I could not ask him to pay me for the car. A total, total, loss. I might have driven it 15 times in three years.

All of this was easily foreseeable. The car was broken when I got it. A look at repair histories for Triumphs was a simple task, and would have made any sane person blanch. And my cash flow position, which was actually a "non-cash flow position," was obvious. Had I asked my dad or mom, they would have told me not to get the car. In a nice way.

But I wanted that Triumph.

Now I want to talk to the tens of millions of people who took out an ARM - adjustable rate mortgage - and couldn't afford it.

It was easy to foresee what would happen. You just had to give it 5 minutes of thought, and figure out what the highest possible mortgage payment was, and whether you could afford it for the long haul.

Tell me, why would you risk your home, the most expensive thing you'll ever buy, without knowing what you were doing? Can you tell me that?

No, you can't.

To the extent you actually thought about it, you just gambled that you could sell your house if the deal turned sour. Ahead of the 50 million other people stampeding for the door at the same time.

Ovejas [Estampida]
(by Alvaro Herreras)

Please stop complaining to me about big banks and Wall Street. Yes, they were stupid and greedy and they figured out a way to lend you the money, even though it was crazy. That's why so many of them are under water.

I'm talking to YOU right now. You wanted what you couldn't afford, and got it with voodoo mortgage lending. You absolutely deserve what happened.

Right, the bank made you sign the loan. They held you hostage and tortured you. You really had no choice.

Right, the mortgage lender lied to you. Well, okay, you didn't hire an attorney. And you didn't actually read the terms of the note. Or the comprehensive disclosure statement that explained the risks in excruciating detail. And you didn't ask anybody sensible in your life about your great idea.

Nope, you just signed the $300,000 loan with 2% down and a top end monthly payment of $5,035.27 on a salary of $50,000 a year. Yup.

Please do me a favor tomorrow morning. Find a mirror, look in the mirror, and say this:

My bad.
MY bad.

Say it three times, just like that. Say it with emotion, like you mean it. You'll feel better.

Because it is true. Sure, there are fraudsters out there. But they are on the fringes. The real engine room of the "mortgage crisis" was the monumental cupidity and stupidity of borrowers who were not "victimized" by anyone except themselves. You just found equally stupid and cupid lenders to play musical chairs with.

Now the music has stopped and you don't have a chair. That is always how the game ends, with almost everyone a loser.

There are bad things in life that just happen to you.

There are bad things in life you do to yourself.

This was a bad thing you did to yourself.

News flash: just because there were other, equally short sighted people who helped you be stupid . . .


So never mind all the goo-goo noise from newspapers and Washington, talking about how you were victimized. It sounds like Captain Renault in Casablanca: "I'm shocked, shocked to find that gambling is going on in here!"

Take control of your life, tell yourself the truth, and stop making stupid, self-indulgent decisions.

Hey listen, gotta go now, just saw a great deal on a '98 Jaguar!


  1. What? No one commented on this? You have a breathtaking grasp of the stupidity of these people, but you have not yet explored the fatuousness of bankers who go against their own interest to please the government...

    Sorry, I think that smart people should protect dumb people by not letting the government try to help them (the dumb people), since that always backfires...

  2. Fatuousness can only be explored a little at a time, otherwise my gall bladder acts up and it gets ugly. The time will come . . .

  3. personally, my perspective on A.R.M.'s is that: I knew the potential dangers of this type of loan at AGE 18!!, BEFORE I'd ever gotten a motgage!! "A.R." stands for "adjustable-rate" (duh!!), as opposed to a "fixed-rate" loan. A mere calorie's worth of thought applied will reveal that A.R.M.'s are more unpredictable and risky than fixed-rate loans.You took a naive bet on an old nag to win the Kentucky Derby.....suck it up!

  4. Re "Leila's" comment:
    "you ("smart people") can lead a horse ("dumb people") to water, but cannot MAKE them drink!!