“It is great news when the price of energy, food, transportation, health care and consumer electronics drops. But for some reason it is bad news when the price of shelter drops…

(I leave the obvious followup for others, since I like to share)

“… And for every foreclosure, there are probably 10 buyers of nearby homes who benefited from the general easing of house-price pressure.”

Or, more often, 10 or 20 nearby homeowners whose “greatest tangible assets” lost value when their neighbors couldn’t keep up the payments and the foreclosing banks couldn’t find takers even at deeply discounted prices. Not to mention the people — many of them staunch Repub voters in deep-red Heartland states! — losing their jobs as the housing-bubble dominos start falling: first the construction workers, then the retail store workers (and owners), followed by the small-business owners whose diners, coffee shops, and service stations relied on those construction and retail workers.

Do these morons think Alan Greenspan worked so hard to hype the “Real Estate *Never* Loses Value!!!” sequel to the Great Dot-Com Depression because he loves the poor and ill-educated? Without the giant realtors’ wet dream con-job of the last six or seven years, the American economy would have deflated so rapidly that no amount of thimble-rigging and precinct-theft could have secured Dubya’s re-election. And now that the bill is coming due (overdue), the usual gang of suspects from the Oval Office on down are trying to spin it as somehow a *Democratic* failure?

I know Malkin and the freepers are willful idiots, but do they have any idea of the kind of widespread economic collapse they’re cheering for?

Suck. It.Up

“For every house sold because the buyer couldn’t make the payments,” Weintraub notes, “there is a buyer on the other end of that transaction who got a good deal. And for every foreclosure, there are probably 10 buyers of nearby homes who benefited from the general easing of house-price pressure. ” Bingo.

And for every stockbroker who leaps from a high building, there are probably 10 more who’ll find their landing a little less splashy, if they aim right. How can this be bad?

Jesus, is there even one aspect of the WIngnut worldview that doesn’t ultimately boil down to BWAHAHAing over the suffering of others, or spreading and deepening the suffering?

Bud: Credit is a sacred trust, it’s what our free society is founded on. Do you think they give a damn about their bills in Russia? I said, do you think they give a damn about their bills in Russia?
Otto: They don’t pay bills in Russia, it’s all free.
Bud: All free? Free my ass. What are you, a fuckin’ commie? Huh?
Otto: No, I ain’t no commie.
Bud: Well, you better not be. I don’t want no commies in my car. No Christians either.

The banks, on the other hand, should be able to recoup their losses by higher penalty fees and vigs on their cc’s, because they are entirely without fault in this.
Do you really expect banks to be so rude as to decline a polite request for a simple subprime loan by someone unqualified for a Sears card? That would just be…. ungentlemanly.

These disgusting people would let someone drown for the price of the rope.

Another worthless argument from the “sub prime crisis” – Schools will be hurt by falling home values because that means less revenue from property taxes.
Well, good! My property taxes for the last few years have gone up 15-20% a year. My own personal income only increased 3-5% a year. Someone please tell me why the local government should get such a large windfall every year?
And of course instead of giving the money back to the taxpayer or even saving it, they increased their budgets to spend every excess tax dollar coming in. And now with property assessments dropping, the cash cow has dried up. They should cut their spending and not look to the taxpayer to pony up for their shortfall.
Another way these sub-prime morons, especially the ones with the interest only loans, is that they were able to deduct much larger amounts off their taxes than those of us who went a more conventional amount. So, they end up paying less taxes, With the bailout, they still keep their deductions. Do you think that they will take the tax savings and apply it to their mortgage payments – I doubt it.

Well, as much as I don’t want to see people suffer… Some suffering must happen before I can afford a home.

Their plan literally helps no one – not even the banks – so it’s prolly no good.

The biggest problem is that the loans aren’t necessarily bad, but changing the rates up when wages are stagnant and housing prices stall or fall is a recipe for disaster – families out on the street and banks owning houses they cannot sell.

Except, of course, banks don’t actually own this debt. Which is part of the problem.

I can’t believe that no one can see that this whole thing happened because local towns and municipalities need more property tax revenue to pick up the slack after the Federal Government got left holding the Iraq war bag. Trickle-down, baby. Billions and billions bleed out into the sand.

How much more arrogant and disrespectful can our political leaders get? Spending billions of our tax dollars on illegal aliens and now spitting on the hard-working, lawful, taxpayers of this country without any regard for the will of the people or for what is right. I say screw all the people involved in this mortgage scam. Almost all of them were greedy, unscrupulous, opportunists with full knowledge of their actions. Let them pay the price, not us. What’s next on the disappoint America agenda?

When the Onion made a cartoon about this, it was satire.

http://www.theonion.com/content/cartoon/apr-13-2007

Once again, reality has outstripped fiction.

Makes one want to slap Mrs. Jesse Malkin a few times, hard, just to be able to advise her to “Suck. It.” Oops, almost forgot the “Up.” Heh.

Oh dear god malkins commentors might just be the dumbest people on the planet-

The people making the loans have to take responsibility for their careless actions as much as the homeowners do. People always ask for money, it’s the lender’s responsibility to say “No.”
“No, it isn’t. It’s the lender’s responsibility to make sure a loan makes sense for the lender, not the borrower. The lenders protect themselves by having a lien on the collateral, in this case the house.”

Am I the only debt-free progressive with cash in the basement secretly dreaming of the next Great Depression just so i can turn these morons out on the street and own their property like fucking Rockefeller?

People buying on teaser rates, who knowingly couldn’t afford the follow-on taser rates, do in fact fully deserve the pain train they’re on.

I can’t say that in polite company, but the #1 reason housing got so unaffordable 2004-2005 was people bidding up prices thanks to these suicide loans.

I don’t blame these buyers, they were doing the rational thing chasing the easy money that was flowing into the system 1998-2004, but I do blame the adults that were supposed to be managing the industries. Same BS that created the S&L crisis.

Just be glad Kerry isn’t Pres now. This all would have blowed up on his watch, and Dems would be in a sticky place right now.

Spending billions of our tax dollars on illegal aliens and now spitting on the hard-working, lawful, taxpayers of this country without any regard for the will of the people or for what is right.

I’ll hazard a guess here, the will of the people is that they get their asses bailed out. The only will that matters, sadly, is that of the banking & mortgage buying industries, & they’ll get out of this w/ the least damage or cost, as they always do. Any one remember the S&L crisis?

This-
http://www.onenewsnow.com/2007/12/perspectives_in_what_direction.php
and this-
http://www.afa.net/emails/transform.asp?x=gap_112607&s=browser&y=2007&m=11
– is a more important issue than that confusing subprime stuff.

I don’t blame these buyers, they were doing the rational thing chasing the easy money that was flowing into the system 1998-2004, but I do blame the adults that were supposed to be managing the industries. Same BS that created the S&L crisis.

I blame Jane Fonda.
(hey makes just as much sense as whatever you just said. And she never would sleep with me, the bitch.)

“Oh dear god malkins commentors might just be the dumbest people on the planet-”

I object to this sterotypying.
Look, since capitolism was invented back in Shakespears time there have been predatory lenders, mostly jewish, who have preyed on the unemployed black man sitting on his porch in alabama in a string vest, and who ends up paying for it? The godfearing christian reagan republicans. Remember the Clinton S&L scandal?

Any possibility that some of these loans were oversold? That maybe there’s plenty of blame to go around, and a significant number of the borrowers were “talked in” to these loans? After all, caveat emptor is all well and good, but it’s impossible to be an expert on everything. I know I’ve been burned after taking “expert” advice on more than one occasion. That combined with the “American Dream” of home ownership could definitely make a toxic combination.

Just be glad Kerry isn’t Pres now. This all would have blowed up on his watch, and Dems would be in a sticky place right now.

Absolutely! I can only hope that wingnuts keep the presidency forever. That way, they can continue to fuck things up and we can continue to congratulate ourselves on being powerless to do anything about it.

I love concern trolls. Really I do.

Who the fuck are you people? Why do we have a sudden deluge of “fuck you, poor people, you can just eat shit and die, and then Teh Market will give me the rewards that are justly mine!”

Bloody vermin infestations. What can one do about them? I’ve got ants in the kitchen, pigeons on the roof, rats behind the shed, and now bloody wingnuts on Sadly, No!

Of course, a government bailout of the lenders will be hailed as the MOST AMERICAN THING EVAR.

I know Malkin and the freepers are willful idiots, but do they have any idea of the kind of widespread economic collapse they’re cheering for?

No.

Jesus, is there even one aspect of the WIngnut worldview that doesn’t ultimately boil down to BWAHAHAing over the suffering of others, or spreading and deepening the suffering?

No.

Scott said,

Same as it ever was. Same as it ever was.

Who the fuck are you people? Why do we have a sudden deluge of “fuck you, poor people, you can just eat shit and die, and then Teh Market will give me the rewards that are justly mine!”

Oh sorry, that was mostly just me quoting malkin posters. I’m not the first journalist to drink way too much and do that on blogs, but i may be the drunkest. Is it wrong to call myself “stubby” when I’m actually hung like a moose? I don’t think so.
Of course the vast ignorance, regardless of political persuasion, about the coming Great Depression is a bit depressing. If the whole housing market caught you by surprise then you ain’t been paying attention for the last 5 years. And yeah, when it comes down to it, you’re always on your own, you gots to pay attention.

If the whole housing market collapse caught…

burp

The really appalling thing is the bitching and moaning about how because they were lucky enough not to have to settle for subprime mortgages to live in a semi-decent house, they should be rewarded. Because not being in danger of losing your home just isn’t enough of a reward. They should be able to stand on the corner and laugh at the stupid people getting foreclosed on and have the bonus of a wad of government cash in their pockets that they have no use for, see, cuz then they’d really get to feel like they’re morally superior to those idiots losing their houses. *They* were responsible, because they’re such brilliant and upright people who had no help from anyone ever, and didn’t *choose* to be poor and the victims of predatory lending practices. So they deserve free money more than anyone who might be in danger of losing their home. Horrible, horrible, STUPID people. It just makes me want to scream.

Again, this is a reminder that for the American right wing, the highest priority in life is not to make our common situation better.

No, the biggest priority in life is to be able to judge someone who is presumably inferior to you and find them wanting, and to then issue harsh denunciations of the inferior ones for their immoral choices.

That’s it.

The fact is, the market should not be interfered with by the government, espeically not to bail out dumb people who made bad investments, especially in coastal elite states. Here in the heartland, we live within our means, and take appropriate risks, and reap the rewards, and have no pity for the greedy, short sighted liberals who want a bailout while cheering on the collapse of banks that will hurt everybody. Perhaps you should take some economics classes, morons. Stop whining and work harder.

No, the biggest priority in life is to be able to judge someone who is presumably inferior to you and find them wanting, and to then issue harsh denunciations of the inferior ones for their immoral choices.

Just as Jeebus taught.

And yet the freepers and Malkinites claim to not only be “Christians” but claim to be the only real Christians. I must have misread the Sermon on the Mount. I didn’t realize Jesus taught “screw the poor.” Huh.

Should we tell them the poor won’t benefit from the prezident’s fix?

Nah. Maybe they’ll drop dead of an Outrage Overdose.

Hey, trolls, pop economics quiz.

1. The US economy runs on which of the following?

a) A treadmill
b) Dunkin’ Donuts coffee
c) Consumer spending

2. Which of the following happens when people’s mortgage rates increase?

a) Disney forced to take renters in Cinderella’s Castle
b) Keebler elves now forced to make cookies in the back of their car
c) Consumers have less disposable income

3. What happens to an economy driven by consumer spending when consumers suddenly have less to spend?

a) Small business owners forced out of market, due to rising costs and falling earnings.
b) Retailers reduce workforce to maintain profit margin, resulting in furthered lowered income for many Americans.
c) Banks and savings institutions are bailed out by foreign interests, resulting in a flow of currency out of the economy.
d) ALL OF THE ABOVE, YOU FREAKING MORONS.

I thought I was poor because I had no shoes til I met a bitch with no motherfucking compassion.

I’m sure if any of these malklowns understood how a liquidity crisis works, the “enlightened self-interest” would kick in and they’d cheer for a borrower bail out. Nah, time for some Herbert Hoover style economic tough love.

The real-real howling will begin, as always, when something that she prescribes as medicine for other people presumes to catch up with Malkin.

It won’t happen to her, she’ll get bailed out by Mellon-Scaife.

Hey, trolls, pop economics quiz.

a) A treadmill
b) Dunkin’ Donuts coffee
c) Consumer spending

And the answer is, Credit. Which is why this current shit is so scary. But buck up, at least you ain’t trolling.

2. Which of the following happens when people’s mortgage rates increase?

a) Disney forced to take renters in Cinderella’s Castle
b) Keebler elves now forced to make cookies in the back of their car
c) Consumers have less disposable income

And the answer is- Foreclosures, bankruptcy, pain and suffering, lots of it, which is what makes this current shit so scary. But buck up, at least you still have computer access.

3. What happens to an economy driven by consumer spending when consumers suddenly have less to spend?

Ah, a trick question? Consumers might stop spending? But what happens to an economy based on credit when credit dries up?

d) ALL OF THE ABOVE, YOU FREAKING MORONS.

You misspelled ‘Moran’. HTH

Let me re-post something I wrote over at Kevin Drums place. Those people are not much better than the freepers. They’re all about inflicting pain

Let me give you a little peek at life on this side of the tracks. I have an adjustable mortgage. It was the one I could get at the time. I used the money to get my business off the ground and to get my firstborn started in college. I am not behind in my payment, I’m just late. The note is due on the first, I pay it on the 30th and I pay all associated late charges. This loan was never one of those ultra-low rate ones, my lowest rate was 6% in the begining. This has already adjusted twice. My current rate is 12.65% Would it really mean the downfall of the republic if it didn’t adjust up again after the first of the year? Cuz that’s what the bailout plan would give me. As long as they don’t find some reason to disqualify me. Let me say again, I’m making my payments, I’m not in default. If the rate goes any higher that may not be the case. Now maybe I should have held out for a better deal, but that was then and this is now. I live in Michigan. We have $5 between us here and we’re just trading it back and forth. My business is down because no one has any money to spend. I can’t sell this house because no one is buying. There are six houses on my street for sale/lease right now. My street is two blocks long. I live in a good neighborhood. I don’t owe more than the house is worth.
So I’m asking you again, would it really kill you to let me stay at 12.65% until I get to a better place? How much more do you need to punish me

Sorry for the rant. It seems that some of the people here get it.

I’m sure if any of these malklowns understood how a liquidity crisis works, …

Its not a liquidity crisis, its worse, its an insolvency crisis.
You seem vaguely enlightened Harry Cheddar (if that is your real name) but ignorant. Not that there’s anything wrong with that, you’d be amazed how many people have no idea what going on with the most imprtant thing in their life, the collapsing economy, prefering to focus on shiney things, “Hey look an immigrant” or “Hey look a Malkin”
But if your interested a fun link-
http://www.rgemonitor.com/blog/roubini/209779

Let me re-post something I wrote over at Kevin Drums place. Those people are not much better than the freepers. They’re all about inflicting pain

Let me give you a little peek at life on this side of the tracks. I have an adjustable mortgage. It was the one I could get at the time. I used the money to get my business off the ground and to get my firstborn started in college. I am not behind in my payment, I’m just late. The note is due on the first, I pay it on the 30th and I pay all associated late charges. This loan was never one of those ultra-low rate ones, my lowest rate was 6% in the begining. This has already adjusted twice. My current rate is 12.65% Would it really mean the downfall of the republic if it didn’t adjust up again after the first of the year? Cuz that’s what the bailout plan would give me. As long as they don’t find some reason to disqualify me. Let me say again, I’m making my payments, I’m not in default. If the rate goes any higher that may not be the case. Now maybe I should have held out for a better deal, but that was then and this is now. I live in Michigan. We have $5 between us here and we’re just trading it back and forth. My business is down because no one has any money to spend. I can’t sell this house because no one is buying. There are six houses on my street for sale/lease right now. My street is two blocks long. I live in a good neighborhood. I don’t owe more than the house is worth.
So I’m asking you again, would it really kill you to let me stay at 12.65% until I get to a better place? How much more do you need to punish me

I could use a blow job.
Okay, that was probably uncalled for. Sorry.

WTSJ – yeah it was uncalled for. But it cracked me up anyway.

TritoneSub said,
December 7, 2007 at 16:02

I thought I was poor because I had no shoes til I met a bitch with no motherfucking compassion.

____________________
And that’s our Sunday School lesson for today, nevermind that it’s Friday.

The truly beautiful thing about karma, as HH the Dalai Lama might point out, is that when you kick others you kick yourself.

Smith, liquidity crisis = insolvency garnished with your favorite superlative. Less consumer credit = less consumer spending. I’m guessing the nitpicking condescension is supposed to be part of your W Thomas Smith cub reporter shtick. Congratulations, you play the misguided pedant ass role well.

Surely somebody here wants to concede that borrowers who took adjustable loans because rates were historically low must have known that their interest rates had nowhere to go but up.

I had the choice between fixed and adjustable and I chose the former, because it was worth a premium to know with a fair degree of certainty what my house purchase would cost in the foreseeable future. If I had known then that my initial rate would be frozen, I would have budgeted more money for principle and less for interest.

So this isn’t a helping hand for the victims of misfortune, it’s a free-pass to get out of gambling debt — and a HUGE assraping for responsible borrowers.

I’m not bwa-ha-haaaing here, just fulminating against how the responsible are punished (to the tune of $20k + in extra interest paid over the initial adjustable rate I could have had) and the greedy are rewarded. I don’t want to inflict pain. Far from it. But the price of housing will remain out of reach of the average person as long as hair-brained schemes like the rate-freeze serve to prop up prices. A house is an asset. An asset that many will have to divest — because they cannot afford it. Nobody will go homeless; they’ll just have to rent. Like millions of others did when they couldn’t afford to buy. Inconvenient? Sadly, Yes. But not disastrous.

WTSJ – yeah it was uncalled for. But it cracked me up anyway.

Thanks, sometimes I think I go too far and then i go further just to keep up.
What’s you kid studying in college? Something useful?

Make that “princiPAL.”

But principle applies here, too…

Smith- elementary education. She’ll never get a job. Now I have a second one in architecture school. Just shoot me now.

Smith, I get the credit problem, and I get the looming crash that the government is required, out of self-preservation, to avert. I was trying to break it down in simple terms, for the fuck-you-I’ve-got-mine crowd.

And the answer is- Foreclosures, bankruptcy, pain and suffering, lots of it, which is what makes this current shit so scary. But buck up, at least you still have computer access.

Yeah, I got it, and that’s the point I was trying to make: seven years of Bush’s economic policy is about to come crashing down around our ears, with a falling dollar and rising oil prices pushing inflation, ON TOP OF the decreased solvency, liquidity, and consumer confidence caused by the credit crisis.

Way to aim a gratuitous slap at someone on your side, though–good going.

Smith, liquidity crisis = insolvency garnished with your favorite superlative. Less consumer credit = less consumer spending. I’m guessing the nitpicking condescension is supposed to be part of your W Thomas Smith cub reporter shtick. Congratulations, you play the misguided pedant ass role well.

Well yes, I do play the misguided pendant ass better than most.
I think we both probably agree that I know more about basic economics. But you really might want to read Roubini too just cuz he knows more than me.

I have always rented, because I knew I couldn’t afford to buy. I’m 37 and live in the same crappy apartment I lived in 10 years ago, with the same cheap appliances, peeling paint, and inconsiderate neighbors. I saw lots of friends and acquaintances buying property, but I waited. Kept my nose and my credit clean. And now that I’m about to take a better job in a lower cost-of-living area, now that I’m ready to take my amassed down payment fund and buy… Well, now I get to bail out all those friends and acquaintances who have enjoyed years of living in their $300K homes financed by ARM’s that they got when interest rates were at historic lows. And if the government freezes interest rates, what will do to the supply of mortgages? Guess I get to keep renting. Yay.

Not that I mind saving them from this totally unpredictable event. When rates had nowhere to go but up, who could have possibly foreseen that they would do so? How can a person possibly be expected to pay even minimal attention to such a trivial detail attached to the largest purchase they will ever make?

I don’t take any enjoyment from people losing their homes, no matter how stupid of a decision it was for them to buy in the first place. I don’t think they’re bad people who should be punished. But dammit, I have scrimped and saved and lived in tiny apartments my entire adult life. I think I deserve even less to be punished.

Just because right-wingers use the idea of “personal responsibility” as a weapon, it doesn’t mean that it doesn’t still have some application.

Smith- elementary education. She’ll never get a job.

The world will always need teachers. They might not ever get paid what they are worth, but smart people will always support good teachers.
Oh jeez, this is starting to sound like FDL.

Nobody will go homeless; they’ll just have to rent. Like millions of others did when they couldn’t afford to buy. Inconvenient? Sadly, Yes. But not disastrous.

Assuming, of course, that there’s sufficient rental housing stock to absorb those who will be compelled to rent.

A lot of that depends on local conditions. Where I live (Seattle), we seem to be defying the housing bust (for the time being) that’s going on everywhere else. I don’t think this condition can keep up, but what’s going on is that there’s new housing going up all over the city and very, very little of it is intended for rental. To make things worse, landlords are converting rental stock into homes for sale. So, if we get a massive burst, we’ll have the local housing market flooded with new renters and less supply of housing for rent. Ouch

I don’t take any enjoyment from people losing their homes, no matter how stupid of a decision it was for them to buy in the first place. I don’t think they’re bad people who should be punished. But dammit, I have scrimped and saved and lived in tiny apartments my entire adult life. I think I deserve even less to be punished.

I feel for you, because I’m in the same situation–but you’re standing around griping while your neighbor’s house is on fire, because you were smart enough not to spill cooking oil all over the stove. Congratulations, you made a smart decision where lots of other people didn’t… now get your hands on a bucket and help put out the fire.

Way to aim a gratuitous slap at someone on your side, though–good going.

We are on the same side, eh? I guess. I don’t like GW Bush and think his economics are evil, but that ain’t even the worst of it, it ain’t gonna get better if Edwards or another Clinton gets elected. Its bigger than them.

People w/ houses & money are greedy piggies who deserve to be punished.
And if you’re not making enough money to get in on the tax cuts for the rich, that’s your fault. Stop blaming others.

[I]t ain’t gonna get better if Edwards or another Clinton gets elected. Its bigger than them.

Your entire financial system is a house of cards, & if enough people ever wise up, it will completely collapse.

A lot of that depends on local conditions. Where I live (Seattle), we seem to be defying the housing bust (for the time being) that’s going on everywhere else. I don’t think this condition can keep up, but what’s going on is that there’s new housing going up all over the city and very, very little of it is intended for rental. To make things worse, landlords are converting rental stock into homes for sale. So, if we get a massive burst, we’ll have the local housing market flooded with new renters and less supply of housing for rent.

That doesn’t make sense. New housing everywhere.. so if “we” get a massive bust there will be lots of vacant and foreclosed property for rental.

…it ain’t gonna get better if Edwards or another Clinton gets elected. Its bigger than them.

You’re perfectly right; we need a fundamental shift in consumer attitudes toward spending, as well as a shift for the US back to a stronger manufacturing basis. We need to get our trade deficit with China under control (the correction in dollar valuation may actually be a small help here), and we also need to stabilize our currency by getting our national debt under control.

And it does go way beyond the President, although it’s a good start to elect someone who believes in stabilizing our ballooning healthcare costs, balancing the budget, and taxing as necessary to pay for the programs the country undertakes. We need to elect Senators and Congresscritters who get the problems we’re looking at 10-20 years down the line, and are willing to make tough and potentially unpopular decisions in order to fix the problems in our economy.

In the early ’80s, when mortgage rates were skyrocketing up here, one of our wannabe programmers came in and proudly announced that he’d locked in at 22% for five years to buy a sharecropper’s townhouse in a suburb of TO.

We were like, way to hurl, Baff. Way to fucking hurl.

This guy worked at the head office of a bank and did this. He left an affordable, nice rental so he could get in before interest rates went, oh I don’t know, to 30%?

He ended up walking away a year later.

W Thomas Smith Jr: Your schtick is starting to blow. Why don’t you do the same.

It is time for the greedy and the stupid to suffer. I’ll be right their to cash them out of their debt and take their property for a HUGE discount.

Yes, and when YOU go bust because of YOUR greed and stupidity, you’ll be begging for a bailout, too…

That doesn’t make sense. New housing everywhere.. so if “we” get a massive bust there will be lots of vacant and foreclosed property for rental.

That’s true, but I’ve never seen foreclosed properties made immediately available for rent. My guess is that whomever seizes the foreclosed property will look to sell it first. The new owner could very well could turn it into a rental. My point is that I don’t see how the trend away from rental can be reversed quickly in the other direction. I could be entirely wrong; I’m definitely not an expert on this. But I would imagine we’d see some very high rents for a while.

The point I’m getting at is that “gee, you can just rent when you lose your house” is probably true on the whole, but the local conditions make it a little more complicated than going to the landlord down the street.

I really am of two minds about this issue (and I’m glab some liberal Blog’s have begun to discuss it, even if it is a “comedy blog”). I just recently purchased my first home with my wife, we provided 20% down payment, are in a fixed 30 year mortgage, and have a 30% housing payment to income ratio.

We ended up buying a house substantially smaller than what we wanted, but it was the only home in the area we felt we could prudently afford.

While I would like to say that I don’t feel a bit resentful of someone who took out a dual-ARM to finance a million dollar home on an 80,000 salary, the fact is, I kind of do. I would like to see those folks deal witht he consequences of their poor planning, to bail the mortgage industry and yes, even consumers out of this reeks of moral hazard. While we may not like it, the bailout of the mortgage industry is the classic extension of the Republican tendency to privatize gain and publicize risk.

Another thing to consider, who is holding that commercial paper that is backing these loans? Mostly foreign investors. Freezing those loans is going to cause a serious crimp in our credit situation. Having everyone pull out of US investments because we just decided to change terms willy-nilly is going to cause an incredible credit crunch as those investors head for the hills.

For a good analysis I suggest you look here: http://www.doctorhousingbubble.com/

Still, I don’t want a housing market crash because it will have many, many horrible outcomes for the country as a whole.

So what to we do? I have no idea. I’m pretty sure the U.S. economy is headed for a VERY rough ride over the next few years. I’m not talking a 70’s recession, I’m talking a 30’s style you-know-what. The house of cards is beginning to collapse, and any attempts to prop it up, no matter how well meaning, are just going to make the fall that much harder.

Your entire financial system is a house of cards, & if enough people ever wise up, it will completely collapse.

Cards are solid, I prefer, for my “its all gonna collapse” metaphor- House of Sand.

Where I live, Linnaeus (North Jersey, adjacent to NYC), landlords are converting housing for sale into rental units–and that goes double for Manhattan and the “fashionable” parts of Brooklyn. Investing in real-estate for income (renting), rather than for appreciation (speculators) will again become viable. (Not taking sides here in the age-old landlord v. tenant battle, of course…)

I just don’t get why home ownership irrespective of the means to acquire and maintain such a huge asset is considered in some circles an inviolable right. I understand the emotional stake many people have in their homes. But a deed does not a home make. A house is an asset. And because of irrational markets, it’s an asset out of the reach of many who nevertheless strive to find ways to acquire. (Yes, I also blame irresponsible lenders who were only too happy to fill the breach.) The past eight years have skewed peoples’ perception of what it means to own a house — it’s, as I said, an asset. Ten years ago, there were plenty of people who believed that stocks don’t go down, too. I feel for the people who got burned. But I cannot escape being somewhat resentful that others having gambled and lost is now my problem. And that’s what irks me about Bush’s bailout. It helps people who can pay their teaser rate adjustable mortgages, but not the same mortgage at a higher rate. Well that’s PRECISELY what fixed-rate mortgages were designed to do. Fixed rate mortgages were available for an overwhelming majority of borrowers, but the rates were too high. Which is another way of saying that many borrowers couldn’t afford their houses, but took the plunge anyway.

Again, empirically, there’s plenty of rental properties in my area. Even with a lot of prospective buyers sitting on the sidelines in the hopes that housing prices fall within the means of the typical wage-earner.

Robert M: This isn’t about life and death, so the house-on-fire analogy is misapplied. Buying something one know they you might not be able to afford (in this case, a house on an adjustable mortgage) is NOT an accident; spilling oil on a hot stove is. I’ll sympathize with the former; I’ll rush to the aid of the latter. Nobody dies because they have to sell their house for less than what they paid (or think that it’s worth). It sucks that greedy speculators will again get to hold the upper hand. But that’s what happens when people gamble and lose.

And it does go way beyond the President, although it’s a good start to elect someone who believes in stabilizing our ballooning healthcare costs, balancing the budget, and taxing as necessary to pay for the programs the country undertakes. We need to elect Senators and Congresscritters who get the problems we’re looking at 10-20 years down the line, and are willing to make tough and potentially unpopular decisions in order to fix the problems in our economy

And of course you are absolutely right, but its even bigger than that. The US no longer runs the world economy, in fact the US is pwned.
Whats needed- make me Supreme Ruler, give me access to the neutron bombs, 2 weeks and I’d have this shit sorted.

I’ll be right their to cash them out of their debt and take their property for a HUGE discount.

I’ve been reading that many of the foreclosed properties are either trashed by their unhappy former owners, or else trashed by looters after they’ve sat vacant in neighborhoods full of foreclosed properties. Folks who buy them looking to make a real estate deal are going to be sorely disappointed when they find out how little value their deal holds in the short term.

Entire neighborhoods are losing value, and even the “good” mortgage holders are being penalized, because if they want to sell their homes, they do it at a loss, if they can sell it at all. And if they don’t sell, their neighborhoods have suddenly become very bad places to live.

And I understand that even renters are being evicted due to landlords being in the same fix as other mortgage holders.

Over-educated:

I’m in precisely the same situation–borrowed less than I was offered, and at terms I knew I could sustain, even given fluctuations in my income and obligations. My sympathy for those who borrowed despite uncertainty is broad, but not especially deep.

And I share your trepidation about the potential consequences of a housing bust. But most of the proposed measures to mitigate the borrowing crisis (which is how I describe the effects of adj. mortgage resets) are just prolonging the agony. Temporarily keeping people in houses they cannot afford helps no one, except maybe the institutions who hold the loans, who get to keep the money flowing in for at least five more years….

“Buying something one know they you might not be able to afford”

Ugh. Make that, “Buying something one knows they might not be able to afford.”

Apologies to Robert M and all. Sometimes I type slowly, but think slower.

Jamey, I see your point, and in your local conditions, what you say makes a lot of sense.

I’m definitely not saying that those who made unwise decisions should be shielded from the consequences of that. I myself am carrying a huge amount of debt (most of it student loans) and I probably didn’t need to borrow as much as I did. I don’t hold anyone else responsible for that and I don’t expect anyone else to pay it off for me. As for housing, I’ve rented all my adult life and probably will for a long time to come. Seeing how much of a bother home ownership seems to be, I’m not sure I even want to buy, but that’s another discussion.

I would say, though, that we need to assess the full costs and implications of the mortgage meltdown. Surely people need to be held responsible, but we need to also consider the broader social and economic costs that result from the shock waves of this problem. We may reach a point where not doing anything becomes a case of cutting off our collective nose in order to spite our collective face, and at that point, we may need to set aside our righteous indignation and come up with some solution.

This isn’t about life and death, so the house-on-fire analogy is misapplied.

My point about fire was not that it’s life-and-death, but that fire spreads. The fire burning down your neighbor’s house needs just a lick of wind to jump to the roof of your house.

I feel for the people who got burned. But I cannot escape being somewhat resentful… that’s what irks me about Bush’s bailout. It helps people who can pay their teaser rate adjustable mortgages, but not the same mortgage at a higher rate.

I understand the resentment. My wife and I (no dependents, and making about 90-95% of the US median income) made the decision eighteen months ago to continue renting, rather than buying a place via a no-doc ARM. We sat down, researched the likely 5-, 10- and 20-year costs of that loan, and chose to wait for a more opportune market.

But Bush isn’t really bailing out consumers, even though that’s how it’s being pitched. He’s bailing out financial service institutions, shoring up consumer confidence, and trying to hold back the imminent economic slide. Now we’re back to the fire metaphor: you don’t ignore a fire, even if it’s not affecting you yet–because the next property that’s destroyed might be your own.

“We may reach a point where not doing anything becomes a case of cutting off our collective nose in order to spite our collective face, and at that point, we may need to set aside our righteous indignation and come up with some solution.”

This is the real problem, the said truth is we may not be able to do ANYTHING. If we do not let the market correct itself naturally we will only be prolonging the inevitable, and in the process, making things worse.

Keeping the adjustable rates low is NOT a solution. Someone owns the paper that that mortgage is based on, most likely not the lender. That someone is eventually going to have to be paid face value for that paper, or write it off as a loss. Eventually foreign investors are going to realize that throwing money into a 7 trillion dollar debtor nation is not a good investment. All of a sudden the money moves out and we are in a world of pain because we can’t sustain our massive trade deficit. The result: massive-Argentina like inflationary increases. Imagine having the same salary and 50% of your current buying power. Could you like under these circumstances. I am fortuante, because I can (it won’t be easy, but since all my debt is fixed rate I can cut back) but MANY, MANY, MANY people are not in my situation, and I can see my really nice neighborhood turning bad really quickly when half the folks in it lose their homes. But I also understand that this scenario may be the best solution for our countries long-term financial health. We need to put down the credit crack-pipe, pronto.

over_educated, you may be right. I’m not advocating keeping the rates low. In fact, I don’t really know what can or should be done, at least not until I educate myself some more on this issue. But I worry about the ripple effect of all this.

Robert M:

…you’re standing around griping while your neighbor’s house is on fire, because you were smart enough not to spill cooking oil all over the stove. Congratulations, you made a smart decision where lots of other people didn’t… now get your hands on a bucket and help put out the fire.

To torture your analogy a bit to make it more like the actual situation: My neighbor, despite numerous warnings from other people and his own common sense, lights his carpet on fire to lower his heating bill. Somehow it doesn’t work out as planned, and now his house is on fire. The only thing I can do to help is take some of his fire and set it on my pile of money marked “down payment fund”, taking some of the consequences of his poor judgment on myself. Why am I obligated to do this?

Jamey:

But I cannot escape being somewhat resentful that others having gambled and lost is now my problem.

over_educated:

While I would like to say that I don’t feel a bit resentful of someone who took out a dual-ARM to finance a million dollar home on an 80,000 salary, the fact is, I kind of do. I would like to see those folks deal witht he consequences of their poor planning, to bail the mortgage industry and yes, even consumers out of this reeks of moral hazard. While we may not like it, the bailout of the mortgage industry is the classic extension of the Republican tendency to privatize gain and publicize risk.

Exactly. It’s like two people were in Vegas. X decides to gamble more than he can afford, Y abstains. X loses, but Y gets his money taken to cover X and keep him in the game. If X had won, would he have shared his bounty with the cautious Y? Not so much.

Whats needed- make me Supreme Ruler, give me access to the neutron bombs, 2 weeks and I’d have this shit sorted.

Well, now that you’ve shitcanned yourself from the National Review,, you’ll have a lot of time on your hands, won’t you?

One thing very few people talk about is how the realtors were pushing subprimes on people who could afford a prime-loan house of lesser value so they’d get a bigger cut. The banks went along because they got bigger payments. Of course, when it all shakes out, rich people will own more property, there will be more landlords, the financiers will get a bailout, and the poor and near-poor who got stuck with these things will get The Big Purple Shaft. Again.

I’m just fucking glad I’m almost completely disassociated with the credit/debit side of the economy completely.

I’m in precisely the same situation–borrowed less than I was offered, and at terms I knew I could sustain, even given fluctuations in my income and obligations. My sympathy for those who borrowed despite uncertainty is broad, but not especially deep.

I’m with you. My wife and I couldn’t find an arrangement that we could sustain (at least, not in a decent neighborhood) and therefore decided to continue renting. It’s not our ideal situation, but it’s better than jumping into a hole that’s only going to get deeper.

I have mixed feelings about this whole issue. On the one hand, I was always taught to follow some simple principles of fiscal responsibility (buy what you can afford, use credit only when you’re as certain as you can be that you can pay it back, etc.), and they’ve served me well over the years. (Thanks, Dad.) On the other hand, I *know* that there are people out there who cannot understand the language and mathematics involved in your average loan application, and I *know* that there are lenders who will take advantage of such people by describing the arrangement in a very misleading way. I have the most sympathy for people in that situation.

(On the third hand, I have to confess that I don’t really have a good grasp of the broader economic issue; I just have a growing sense of disquiet. If anyone knows some good textbooks/websites/whatever I could read to brush up on my economic knowledge, it’d be appreciated.)

Well, given that people’s circumstances never change, and that everybody who buys a house when they have a good-paying job and can afford the rates they get and anticipate will always have that job (with substantial annual raises, too!), and that mortgage lenders are never predatory, pushy or misleading about the nature and ultimate costs of their loans, it’s obvious that all these people feeling the bite of sub-prime loans and other ARMs were simply stupid and greedy and deserve what’s coming to them.

Dan,

I don’t think anyone on these boards have a problem with giving a helping hand to people who have genuinely had some really bad luck (injury, illness, accident, etc…). What I think folks have a problem with are people who went into mortgages that they couldn’t even afford when they signed the commercial paper (which many ARM mortgages are an example of). That is a different kettle of fish.

Trilateral Chairman said,
December 7, 2007 at 18:18

Well, now that you’ve shitcanned yourself from the National Review,, you’ll have a lot of time on your hands, won’t you?

I was the first journalist to interview the Trllateral Commission.

I’m just fucking glad I’m almost completely disassociated with the credit/debit side of the economy completely.

heh, what you live on a desert island somewhere, growing your own food and knitting your own pants from hemp? How duz you haz internet connection?

(On the third hand, I have to confess that I don’t really have a good grasp of the broader economic issue; I just have a growing sense of disquiet. If anyone knows some good textbooks/websites/whatever I could read to brush up on my economic knowledge, it’d be appreciated.)

If you don’t know Nouriel Roubini, you ain’t been paying attention.
http://www.rgemonitor.com/blog/roubini/

I don’t take any enjoyment from people losing their homes, no matter how stupid of a decision it was for them to buy in the first place. I don’t think they’re bad people who should be punished. But dammit, I have scrimped and saved and lived in tiny apartments my entire adult life. I think I deserve even less to be punished.

When you lose your job, because the whole economy is going bust–well that’s going to seem even more unfair than having some of your tax dollars used to try to solve this crisis, isn’t it?

We’re all in this together, much as you might like it to be otherwise.

Think about this for a moment. What is the normal rationalisation for buying a house via a mortgage? You spend 10 or 20 years paying perhaps twice the asking price of the house, but it doesn’t necessarily cost any more than renting a place, and at the end of it all, you have something of value.

For most working class/middle class people, the equity they hold in their home (weather or not they have fully paid it off yet) is the biggest asset they own, and their main way of saving for retirement, or children’s education etc.

If the value of houses drops drastically, just about everyone who owns a home is going to suffer. For the rich, it is an opportunity to buy more property on the cheap, on the basic (and essentially true) assumption that a good economy is accompanied by a steady rise in the value of housing.

Most people that own property however, own ONE house, the one they live in. If it is paid off, they are going to see its value take a temporary hit as the value of everyone’s home drops.. This means they loose the ability to release equity from their home by either selling it, or taking out a loan against it.

A lot of older home owners are going to have to put off retirement, because their investment is a worthless pile of bricks until the economy picks up.

As for people that haven’t finished paying for their homes (which is most of them really) they are going to be unable to move house, even if they have a fixed rate mortgage. This means an inability to re-locate for a new job, and puts a crimp in peoples career plans.

What about people who rent? I think they are going to loose out too! The number of people who need housing is going to stay the same, but with the housing market in a dire state, nobody is building new homes. That puts a squeeze on the supply of housing for a start. As banks foreclose on home owners, those houses may get turned into rental properties. Emphasis on “may”. In a risky market, slumlords are going to be reluctant to invest in property that may drop even further in value.

And here is the key thing. For every 100 houses lost to foreclosure, there will be 100 families looking for a rental property. Not all of those 100 houses will come onto the rental market. Perhaps 50 will.. perhaps 80. The supply of rental properties won’t keep up with demand. That means rent goes up.

Bottom line? Everybody can expect their living costs to rise a lot. The US economy is a big game of musical chairs, with everybody’s debts dancing around in a circle. The music just stopped.

Their? There?

and what if those 10-per-house buyers are ARABS!!!! Islamofascists! Or Mexican! Oh NO!

The most troubling aspect of this, is that it is yet another financial screw-over for everyone from the poorest person in rented accommodation, up to anyone who still relies on the value of their home to fund retirement.

..The same people affected by the poor job market, rising fuel/heating costs, mile high healthcare costs, and all the other things that piss down on those worth less than a million.

The wingnuts will tell you “work harder”, but fail to see that money doesn’t grow on trees, or get dug out of the ground. People acquire folding green stuff by persuading somebody else to give it to them, in exchange for something.

If nobody is buying what you are selling (goods, time, or expertise) then working harder won’t solve anything. If there are not enough days in the week for your wage to equal your housing costs, You are going to have to go to the mill owner, hat in hand, and ask for a raise. Which you wont get, as long as there is some other poor schmuck who can do your job instead.

The wingnuts say the government has no right to try and fix this mess.. This seems based on the premise that the goverment is NOT responsible for regulating the financial industry so that this kind of thing doesn’t happen in the first place.

I think it has been pretty bloody well established by now that the financial industry needs strict government regulation, because otherwise they will lie, cheat, and steal until they own everything.

SUCK. IT. UP

Will she and her pet monkeys say the same to hedge fund managers when it comes right down to it? Doubtful.

It is time for the greedy … to suffer…. I’ll … take their property for a HUGE discount.

Hilarious. This massive cognitive dissonance is in other comments as well, this condemnation of the “greedy” sub-prime mortgagees while salivating at the prospect of becoming rich by buying the houses from which they’re evicted, at a discount no less, and admiring those who’ve screwed poor folks before.

Tropical Tats: I was roughly at you age and your situation when we purchased a house. There is a lot to recommend for cheap appliances, peeling paint etc. — with no space to put new junk in, you learn to be impervious to sales pitches and you actually manage to save a lot.

That said, the “personal responsibility” thingy has moronic aspects too. First of all, the proposed intervention is modest, and what is at stake is not preservation of home equity of some schmucks but the soundness of the financial market where some trillion dollars of mortgage-collateralized securities are floating. You do not want economic MAD — mutually assured destruction.

You, as a responsible person, do not want a situation that when YOU need a loan then you will not get it because the bank cannot sell your mortage as the market frozed. Or to pay some ridiculous interest rate. And too loose your job because of a general recession. So some pounds of flesh have to be extracted for the market to correct itself but it is better to be within some limit.

The other aspect is that the true favor is to the banks and buyers of bonds rather than to customers who could be better off abandoning the struggle with payments, walk away from loans and rent affordably after the collapse of real estate values — the banks will have a lot of homes to rent after all.

My conclusion is semi-contratian. If we had better consumer protections in place, including nice bancruptcy laws, financial institutions would have to be more careful in evaluating risks — and banks know perfectly well how to do it. Except that there was an illusion that now the entire risk is on the side of consuments so they do not have to care. In other words, better protections for the consumers of credit will result in less credit being offered, and this is exactly the good thing, e.g. less excess in real estate prices.

Considering the size of Malkin’s house, she must have sucked an awful lot of it up.

“kingubu said,

Jesus, is there even one aspect of the WIngnut worldview that doesn’t ultimately boil down to BWAHAHAing over the suffering of others, or spreading and deepening the suffering?”

If there is, I’ve yet to see it. Modern Movement Conservatism seems more like a mass-psychosis everyday.

I’m just fucking glad I’m almost completely disassociated with the credit/debit side of the economy completely.

heh, what you live on a desert island somewhere, growing your own food and knitting your own pants from hemp? How duz you haz internet connection?

I’ll take, ‘Not reading the post because I’m too busy flaunting my pretend Econ diploma’ for $300, Alex.

What part of ‘credit/debit’ in a discussion about mortgages did you miss while you were tutoring Milton Friedman, pray tell?

But Bush isn’t really bailing out consumers, even though that’s how it’s being pitched. He’s bailing out financial service institutions, shoring up consumer confidence, and trying to hold back the imminent economic slide.

Bing-bing-bing! — We has a winner! Dubya’s ballyhoed “bailout” is 50% giving his Wall Street supporters one last chance to cash out into the Caymans, and 50% trying to stall widespread voter discovery of just how bad every American’s financial situation is about to get. One last year-end bonus for the money “magicians” and a few more months in the White House before the torch-bearing mobs overrun the jersey barriers is the best he can hope for, and if Dear Leader can’t understand the numbers he’s surrounded by Repub weasels who do.

Mrstrailerco, I know exactly what you mean. I spent some of the best years of my life in Michigan, but my partner and I left at the trough of the late-80s recession because it was obvious that we’d never both be employed at the same time if we stayed. We bought our cruddy little house here in the Northeast at the bottom of the last local housing bust, and we wouldn’t have been able to do that if partner’s dad hadn’t helped with the down payment. And thank goddess for reliable contraceptives, because neither “lifestyle upgrade” would have been possible if we’d allowed ourselves the luxury of having kids!

Every time some arsewipe troll spouts off about “Heartland values”, I have to wonder why states like Michigan, Ohio, Indiana, and — yes — Kansas have been bled of jobs, schools, housing, and hope under so many Repub and Repub-lite administrations.

If John Edwards really wants a landslide to carry him into the White House, he should start talking about a Works Progress Administration for the New(ish) Millenium. The national infrastructure is crumbling, our most vulnerable citizens (the very young, the old, the disabled) are being left to rot, our creative talents are being wasted, and the young people coming into what should be their most productive years can’t get the training they’ll need to compete without shouldering a crippling debt load — if they’re lucky. One of the few economic mantras I know that actually works is the one that goes “Things which can’t go on forever, eventually stop”… We’re at the cusp of a really huge and ugly economic crisis, and the people with the best view all seem to be busy arguing about the proper allocation of lifeboats that this Titanic doesn’t even have!

I love that people with no option but to take mortgages with punitive rates if they want to fulfil the “American dream” and have their own home, something both sides of the political divide claim to support, are “irresponsible”. Most people don’t understand much economics, and have no idea why interest rates go up and down. When they are being told by their elected representatives, whom they are invited to trust, that the economy is strong, what means do they have to question that?

Thank you for your comments; I am glad someone is addressing this. Two of my co-workers are upside-down and have had to resort to renting. It’s a terrble situation, but it’s a perfect storm when the credit markets clamp up and shut out those most desperate to refinance.

I have a fixed rate mortgage and if the answer to a broad economic meltdown is to provide caps on ARMs….so what? Sort of like welfare. I don’t begrudge those that need assistance, because I can understand how capricious and irrational life is. I’m happy with what I have and I don’t really care if I’m not King of the Shitpile.

But here’s what I think is most interesting. Lets assume the very worst…. 1930’s broadscale meltdown of the economy. I take 2 positive things from this-

1) Those of us who value community and fellowship will survive. Our lives may change forever, but is that bad? Maybe not. Those that think they are self-made, independent, and basically anti-social (see Malkin, FR, etc) better learn to grow food, raise sheep, pound nails, saw wood, and do the thousand things that they take for granted today. When you have money, you need not have to think about these things. When the $ stops flowing, lets see how well their rugged individualism and political conservativism sustains them.

2) From this economic disaster, which political philosophy will be better suited for society to make the evolutionary leap to the future? I think the answer is pretty obvious.

I see the great housing bust of 2007 as the final act in our 30+ years of self delusion. We gave up our core manufacturing bases in the 80s and 90s. The economic engine of the Clinton years, the internet, went bust in the 90’s….but at least Clinton had given us a $400BB surplus that could have been used as a downpayment to reinvent our economic engine. What would that have been under Gore? I think it’s pretty obvious that, instead of investing $2 TT we didn’t have fighting an unnecessary and unethical war to get oil from $30 to $100 a barrel, Gore and the Democrats would have made the economic investment in inefficient (jobs), decentralized energy and a retooling of the infrastructure to accommodate that. Not only would it have made us energy independent and enhanced our national security, it would have created meaningful jobs that drive a meaningful economy for a meaningful future.

So, now, who knows? There’s not much left in the cupboard. Those countries that hold the dollar (China/Mid-East) could end up buying this country at a steep discount. And that will come with lots of strings attached. Those that hold the economic wealth in our country are investing their money in hi-growth economies and many can’t seem to make the connection between taxes and their future well being. I suppose they have options, though…they can always hide behind gated communities or follow their investments to another country. The rest of us may have to relearn the values of a hard day’s work and an appreciation for the simpler things in life. If so, it will be a whole helluva lot easier for us who understand and practice the concepts of sharing and commonwealth than for those who have deluded themselves into believing that they are their own, self-made person – a delusion that’s been cultivated by much of our mainstream media and the political party trhat they front.

It is time for the greedy and the stupid to suffer.

Yes it’s high time Bush and entourage left the Whitehouse and the yelping wingers had their rabid blather pulled from the Intertubes. The end of greedy and stupid won’t come soon enough for me.

I have always rented, because I knew I couldn’t afford to buy.

Few who buy can afford to where I live, but longer term low interest rate offerings by the chartered banks – not subprime lenders – are tempting many people to invest. I don’t know what rents are like in your area but here (in a large Canadian metropolis) most rental accommodation is through the roof. If you have a down payment of say 25%, and get a five-year low interest rate plan, you will end up paying less or around the same as what you’d pay in rent.

The average cost of a house here has reached $600,000, and one-two bedroom apartments in the urban core start at around $350,000. I haven’t heard any subprime horror stories in Canada yet, although I suspect there must be a few here and there. Most people get their mortgages from reputable banks whose interest rates are competitive. Subprime lenders make a sweet offering and within three months double or triple the original interest rate. That isn’t happening with the chartered banks.

The arrears rate in Canada is half of one percent right now and should remain that way for as long as the rates make buying and owning affordable.

We are being affected by the subprime crisis though, especially in forestry and wood manufacturing. BC lost 1800 jobs in the last month alone, most of them in rural one industry towns. A lot of this is due to the devalued US dollar and the subprime crisis. Obviously Malkin and her freeper crew with their blinders on don’t see how the crisis spills over. When the house she lives in begins to lose value, perhaps she’ll wake up and start directing her screams and yelps at the greedy lenders who sold borrowers a pack of lies in order to get rich quick.

As awful as the lenders were, it’s disingenuous to act as if the borrowers had no part in the mess whatsoever.

When Amy Goodman had Lou Dobbs on this week, she refused to acknowledge his argument that new cases of leprosy and tuberculosis in America largely originate from unscreened immigration.

This is because Goodman has a worldview that precludes criticism of immigrants, just as someone like Malkin or Bush has a worldview that precludes criticism of the American mainstream.

over_educated said,

I don’t think anyone on these boards have a problem with giving a helping hand to people who have genuinely had some really bad luck (injury, illness, accident, etc…). What I think folks have a problem with are people who went into mortgages that they couldn’t even afford when they signed the commercial paper (which many ARM mortgages are an example of). …

The people I have a problem with are the “professionals” who offered those people the mortgages … the financial industry. I suppose not every single one of them is a Republican, but the industry as a whole is firmly in the greedheads’ camp and always has been. So why should the borrowers, whose “greed” for a home and some modicum of security led them into this mess, be more problematic than the lenders, who are supposed to be educated and understand the economics?

it’s disingenuous of the middle class to berate poor people who got sold a bill of goods by scumprime lenders when they’re in hock up to their eyeballs in credit card debt and one or two paycheques from being homeless themselves.

A teeny rise in the interest rates on lines of credit and these arrogant people would be shitting bricks about the $25,000 they’ve borrowed to buy more shit they don’t need.

I’ve rented for many years. It’s a shabby little apartment, and the neighborhood is going downhill. Ethnicity has little to do with it. Twenty years ago, these small apartments were rented mostly by couples and singles. Over the last few years, as rents have risen, most of the places now hold families, sometimes extended families, or multiple roommates. Higher density means less parking, more trash, more turnover, more noise. Eh. I still like my apartment.

I’ve been scrimping and saving, too, but am I ready to cash in and buy a house or condo? ::dissolves into laughter:: Nah. I can’t imagine it’ll ever happen. I’m trying to pay rent and utilities, trying to keep my 20 year-old Honda chugging away, buying my Plan D prescriptions, and being arrogant enough to buy nutritious, often organic food.

What I want is whatever will keep people housed and employed. I want mrstrailerco to get a little relief to get over rough patches. I want people who are wobbling on the edge of losing everything – when they just need a pass on one or two mortgage payments – to get a little break. If they get that break, maybe they’ll be able to continue to work.

I don’t think wanting that to happen is the same as wanting to bail out greedy stupid people. Duh.

All those Freeper commenters…you know that a certain percentage of Freepers are facing the exact problems that are generating such hateful mocking. Do they feel weird? Do they register the dissonance? Do they stop commenting? Do they comment more forcefully? Do they blame immigrants and everyone else? God, I am so lame. But I really am curious about the inner lives of Freepers.

“Isn’t hyperinflation just a chance for people of lower incomes to realize the dream of being a millionaire?”

LOLOLOLOL! Great line, and one I’m going to steal for my own use now and then. 🙂

Why all the folks who feel that the “greedy” home buyers who took these usurious loans believing the lies of the predatory lenders and the Bush/Demo (Feinstein, Clinton, et al) economic hype are the ones who need to be punished is beyond me. Reminds me of the other endless “war” we’re in, the ‘War on Drugs.’ Let’s put the addicts in jail and let the pushers go free. mrstrailerco’s post illustrates the choice you have nicely. You either believe that rates of 12.5% and up are fair or not. Seems like a simple choice to me. I guess for some folks its easier to punch the guy sitting on the next barstool than driving down to the country club and kicking some rich guys ass.
PS. For all you Bible belters out there anything over 10% means eternal hellfire if I remember correctly…

Malkin said: “The last turd down the toilet got caught holding the bag, to damn bad!”

I know it’s unseemly to pick nits about spelling mistakes, but shouldn’t it be “too damn bad”? Isn’t she supposed to be a professional writer?