I think we have a basic disagreement about what constitutes affordability. My definition of affordability is that you don’t have to resort to exotic financing in order to get the house. Now there are exceptions, but for the most part when you start drifting away from conventional financing because it’s the only way to get a ‘reasonable’ house versus renting, then there is an affordability issue. That means you need to rent longer, increase your income, or start with a cheaper house. Yes it may be unpleasant, but that’s life. Please don’t insinuate that people “had no choice” but to go with exotic financing.
The inability of people to keep up with their mortgages was completely predictable given that there was a universal expectation of always being able to refinance at favorable rates (often with cash out), which in turn was dependent on housing values contining to defy historical trends in appreciation. Sooner or later it was going to hit a wall, the question was when? The fact that people saw this coming was well documented at least six years ago—unfortunately nobody was interested.
What Madoff did was despicable, and the incompetence of the SEC is unforgiveable, but I respectfully disagree that you consider defrauded account holders who were regularly provided with fraudulent brokerage statements with borrowers who were unable or unwilling to consider the risks of their financial decisionmaking.
Speaking of financial risks, my kids’ 529s have been decimated. My 401K is a 201K. My house dropped in value before I even closed on it. Who’s going to make us whole? Right….Nobody. That’s life. We will live with it, pick up the pieces, and press on.
REJECT this notion of a nanny state.
By the way, as for your comment about the treasury secretary, at least I can figure my way around turbo tax and I’ve had no mea culpas to make to the IRS.
You sound pretty unrepentantly partisan yourself. Yeah, I’m a conservative trolling around enemy territory , but I think for myself and I happen to like both Sean and Alan. So sue me. You on the other hand don’t sound quite as “balanced”. Not even close, actually! As for “spitting venom,” conservatives can certainly be guilty of it, but liberals have perfected it into an art form.
Anyway, given there is so much ado these days about the “Fairness Doctrine” and how important it is to have balanced viewpoints, I thought I’d embrace the spririt of it and drop in… You do appreciate and encourage other viewpoints, right Eric?
Saw you on Hannity last night. He looks really bummed that you left the show. I thought he was going to burst into tears when he noticed you weren’t wearing the watch he gave you!
After you take a breather you should rethink this. Sure Sean is a broken record about Ayers (who may very well be an unrepentant terrorist by the way), and has a problem letting people finish a sentence, but I think the two of you really made a great team. Go beat the crap out of each other, settle your differences, and get the discussion going again (even if you are wrong most of the time ;-)
There is no doubt that the lending climate of the past several years provided a catalyst for current conditions, but I really don’t agree that buyers are all to be viewed as victims. There comes a point where we need to take a look at the responsibility and judgement of individuals, which quite frankly has been a collective failure and the true reason we are in this mess. Everyone wants to blame someone else for their own self-destruction. “We are victims—make us whole.” Victims of what? Had more people exercised commons sense and rejected products that you blame the lenders for offering, the market for these products would have dried up, and we’d all be in better shape. Instead, people allowed an overwhelming sense of entitlement cloud their judgement. They looked for any excuse imagineable (Greenspan says it’s ok, the bank says it’s ok, Barney Frank says it’s ok, my neighbor does it all the time, I’m just living the American dream…) to rationalize borrowing huge sums of money and draining their equity. Come on Lee, people don’t need to be a lawyers or have degrees in finance to do simple math—–there is income, and there are expenses. One of them needs to be higher, and you need to set something aside so you can survive in the event you lose your income. If a large number of borrowers didn’t think it through, or thought they were smart enough to work the system for a while and get out before the markets blew up, then they victimized themselves. We are where we are. It’s time to stop catering to a victim mentality and the notion of “too big to fail,” because the federal govenment is rapidly becoming the biggest ponzi scheme ever known. Stop the madness already—it will be difficult for a while but we’ll all be far better off in the end.
Your post seems to imply that anyone who doesn’t agree with mortage bailouts should be ashamed and feel guilty about it. I truly resent this. There are many ways to look at this argument. Here is one you should consider. My wife and I lived in a small one bedroom apartment in suburban NY for over 10 years. During that time we followed all the rules—-we worked hard and sacrificed a lot to put thousands of dollars aside every year to use toward the purchase of a house. The problem was no matter what we did we were always about 2 years behind a hot real estate market. Could we have leveraged ourselves to the wall to get a house? Absolutely! But we ran the numbers and even with a good income they just didn’t make any sense at all. The impact of this was that we brought home TWO children to that apartment, and we didn’t make it out of there until they were 5 and 3. Here we were with a six figure down payment trying to make the best of it while everyone else was out engaging in bidding wars while putting nothing down. We were miserable, and we felt we were missing out on some of the best years of our lives because we couldn’t settle down with our kids—every freaking weekend we were out dragging them around to look at more atrocities that we couldn’t afford anyway. Nobody felt any guilt about us crammed in our apartment while they were driving prices through the roof of everything in site with liar loans so they could flip houses. We felt our timing was terrible, but we accepted the fact that things like this happen in a free market and that a correction had to happen sooner or later. Well, as things calmed down a bit over the last year we finally managed to catch up and get a nice home in a good area. It wasn’t free by any means—our mortgage and taxes are a pretty big nut. We’re making it though, and we’ve set aside enough to last at least a year if we are affected by layoffs. Now we’re breaking our necks trying to fix the place ourselves–something we wish we could have done before we had kids; quality time with them has really suffered. We haven’t exactly had a picnic, yet because we were responsible about our finances and didn’t insist that we had to have the house NOW no matter how much the numbers didn’t make sense, we now have to feel guilty about the neighbor’s financial strains and do our part to help out. Baloney. We didn’t ask the taxpayers to help us get a house when we really needed one. In return please don’t hang everyone else’s problems around our necks the minute we try to live our lives in peace.
What Kind Of Society Are We?
February 24th, 2009 at 6:48 pmLee-
I think we have a basic disagreement about what constitutes affordability. My definition of affordability is that you don’t have to resort to exotic financing in order to get the house. Now there are exceptions, but for the most part when you start drifting away from conventional financing because it’s the only way to get a ‘reasonable’ house versus renting, then there is an affordability issue. That means you need to rent longer, increase your income, or start with a cheaper house. Yes it may be unpleasant, but that’s life. Please don’t insinuate that people “had no choice” but to go with exotic financing.
The inability of people to keep up with their mortgages was completely predictable given that there was a universal expectation of always being able to refinance at favorable rates (often with cash out), which in turn was dependent on housing values contining to defy historical trends in appreciation. Sooner or later it was going to hit a wall, the question was when? The fact that people saw this coming was well documented at least six years ago—unfortunately nobody was interested.
What Madoff did was despicable, and the incompetence of the SEC is unforgiveable, but I respectfully disagree that you consider defrauded account holders who were regularly provided with fraudulent brokerage statements with borrowers who were unable or unwilling to consider the risks of their financial decisionmaking.
Speaking of financial risks, my kids’ 529s have been decimated. My 401K is a 201K. My house dropped in value before I even closed on it. Who’s going to make us whole? Right….Nobody. That’s life. We will live with it, pick up the pieces, and press on.
REJECT this notion of a nanny state.
By the way, as for your comment about the treasury secretary, at least I can figure my way around turbo tax and I’ve had no mea culpas to make to the IRS.
Looks Like I'm In Trouble With The Law
February 24th, 2009 at 3:35 pmEric, Eric, Eric.
You sound pretty unrepentantly partisan yourself. Yeah, I’m a conservative trolling around enemy territory , but I think for myself and I happen to like both Sean and Alan. So sue me. You on the other hand don’t sound quite as “balanced”. Not even close, actually! As for “spitting venom,” conservatives can certainly be guilty of it, but liberals have perfected it into an art form.
Anyway, given there is so much ado these days about the “Fairness Doctrine” and how important it is to have balanced viewpoints, I thought I’d embrace the spririt of it and drop in… You do appreciate and encourage other viewpoints, right Eric?
Looks Like I'm In Trouble With The Law
February 24th, 2009 at 2:07 pmAlan-
Saw you on Hannity last night. He looks really bummed that you left the show. I thought he was going to burst into tears when he noticed you weren’t wearing the watch he gave you!
After you take a breather you should rethink this. Sure Sean is a broken record about Ayers (who may very well be an unrepentant terrorist by the way), and has a problem letting people finish a sentence, but I think the two of you really made a great team. Go beat the crap out of each other, settle your differences, and get the discussion going again (even if you are wrong most of the time ;-)
What Kind Of Society Are We?
February 24th, 2009 at 11:36 amLee-
There is no doubt that the lending climate of the past several years provided a catalyst for current conditions, but I really don’t agree that buyers are all to be viewed as victims. There comes a point where we need to take a look at the responsibility and judgement of individuals, which quite frankly has been a collective failure and the true reason we are in this mess. Everyone wants to blame someone else for their own self-destruction. “We are victims—make us whole.” Victims of what? Had more people exercised commons sense and rejected products that you blame the lenders for offering, the market for these products would have dried up, and we’d all be in better shape. Instead, people allowed an overwhelming sense of entitlement cloud their judgement. They looked for any excuse imagineable (Greenspan says it’s ok, the bank says it’s ok, Barney Frank says it’s ok, my neighbor does it all the time, I’m just living the American dream…) to rationalize borrowing huge sums of money and draining their equity. Come on Lee, people don’t need to be a lawyers or have degrees in finance to do simple math—–there is income, and there are expenses. One of them needs to be higher, and you need to set something aside so you can survive in the event you lose your income. If a large number of borrowers didn’t think it through, or thought they were smart enough to work the system for a while and get out before the markets blew up, then they victimized themselves. We are where we are. It’s time to stop catering to a victim mentality and the notion of “too big to fail,” because the federal govenment is rapidly becoming the biggest ponzi scheme ever known. Stop the madness already—it will be difficult for a while but we’ll all be far better off in the end.
What Kind Of Society Are We?
February 24th, 2009 at 1:23 amAlan-
Your post seems to imply that anyone who doesn’t agree with mortage bailouts should be ashamed and feel guilty about it. I truly resent this. There are many ways to look at this argument. Here is one you should consider. My wife and I lived in a small one bedroom apartment in suburban NY for over 10 years. During that time we followed all the rules—-we worked hard and sacrificed a lot to put thousands of dollars aside every year to use toward the purchase of a house. The problem was no matter what we did we were always about 2 years behind a hot real estate market. Could we have leveraged ourselves to the wall to get a house? Absolutely! But we ran the numbers and even with a good income they just didn’t make any sense at all. The impact of this was that we brought home TWO children to that apartment, and we didn’t make it out of there until they were 5 and 3. Here we were with a six figure down payment trying to make the best of it while everyone else was out engaging in bidding wars while putting nothing down. We were miserable, and we felt we were missing out on some of the best years of our lives because we couldn’t settle down with our kids—every freaking weekend we were out dragging them around to look at more atrocities that we couldn’t afford anyway. Nobody felt any guilt about us crammed in our apartment while they were driving prices through the roof of everything in site with liar loans so they could flip houses. We felt our timing was terrible, but we accepted the fact that things like this happen in a free market and that a correction had to happen sooner or later. Well, as things calmed down a bit over the last year we finally managed to catch up and get a nice home in a good area. It wasn’t free by any means—our mortgage and taxes are a pretty big nut. We’re making it though, and we’ve set aside enough to last at least a year if we are affected by layoffs. Now we’re breaking our necks trying to fix the place ourselves–something we wish we could have done before we had kids; quality time with them has really suffered. We haven’t exactly had a picnic, yet because we were responsible about our finances and didn’t insist that we had to have the house NOW no matter how much the numbers didn’t make sense, we now have to feel guilty about the neighbor’s financial strains and do our part to help out. Baloney. We didn’t ask the taxpayers to help us get a house when we really needed one. In return please don’t hang everyone else’s problems around our necks the minute we try to live our lives in peace.