Thursday, February 19, 2009

Irretrievable

If you been following the news about the housing bailout there is much to be concerned about, and much to be angry about about if you’re one of the poor saps that was responsible enough to buy a house you could afford in a market that was not ridiculously overpriced. There are quite a few ideas and quotes in the papers that make me want to scream. But I think this one left me the most dumbfounded:

[Housing counselors] say that interest-rate reductions alone may not be enough to help many borrowers. "For about half the clients that come in to us, an interest-rate reduction down to zero" isn't going to save them from onerous debt…

- Wall Street Journal

Half his clients have loans for such large amounts that even if they were given ridiculous, nearly impossible loans they still would be unable to make the payments? Even if someone gave them free money for thirty years they still can’t swing it? Even with loan terms unobtainable by the US government, they’ll be laboring under “onerous debt?” Then let me go out on a limb and say that it’s not worth wasting one minute of time, one penny of treasure or even one column-inch in the WSJ to save these people because they’re irretrievably screwed.

 

Unless…

Maybe these people are in the wrong line of work. Maybe they should be… actors. Why not? These people took loans that, from the moment the ink was dry, cost more than they could afford. They actually signed on for a crippling debt load that was slowly draining their bank account right from day one. In other words, these people are so comically stupid that by comparison the average Jim Carrey character would look like a giant pulsating brain with psychic powers. These people would make the best lowbrow comedy movies the world has ever seen! They’d make movies of such dumbfounding moronicity that even Mensa members would laugh, in pain if nothing else.

Sure, they can’t all make movies. Even supernaturally-funny lowbrow comedy would wear thin eventually. So after that, reality TV. It has got to be funny to watch people like this try to “live” their daily lives. It would be like a live feed from Fail Blog. And worst case, they’re clearly stupid enough to sign on as the “star” of the new hit show “Ow, My Balls!”

Given time, America can rebuild its economy based on our newfound, nearly inexhaustible natural resources of un-fucking-believable stupidity. The West shall rise again!

5 comments:

tr said...

You mean heartless man! Poking fun at stupid people, shame on you. Where is your humanity? These poor souls were merely trying to get rich quick in the booming real estate market.

All they had to do was tough it out for a couple of years until the "equity" had built up in their new house and they could "cash in" on it. Nothing like making money out of thin air!

Their only problem was they never heard the old saying:

"I wouldn't bet the farm on it, son."

BeaKeR said...

I wasn't poking fun at anyone, I was merely suggesting some potential avenues of career advancement for these poor, witless fools.

Gordon Weakliem said...

Of course, stripped of all relevant context, they're idiots. Maybe they can't afford the mortgage because they've had a drastically reduced income, or they got talked into an option ARM, or they had a belief that their income would grow into their mortgage.
Speaking of context, try reframing the context: how about the mortgage broker who sold the loan or the banker who approved the loan - if the loan couldn't possibly be repaid, that's real rank stupidity. These people are supposed to be financial experts. If it was such a bad loan, did they not realize it? Maybe it is just plain venal evil, lending money expecting to foreclose the mortgage.

Or how about the financial "experts" who relentlessly said to buy as much house as you could afford, that real estate was the perfect investment because you could always live in the house. Advice is as always worth what you pay for it, and often not even worth that.

BeaKeR said...

Gordon-
There are probably some people that had some incredible string of bad luck, lost jobs, health problems and just got hosed. That small number of people has my sympathy. But I would point out that there are people in that situation in any given year and they don't usually get a massive bailout. The people that had terrible luck in 1999 and didn't get bailed out must be really pissed.

The others you talked about, who "got talked into it", or "believed their income would grow into it" were stupid, plain and simple. Maybe greedy too, but definitely stupid.

To sign a mortgage you must be an adult. Being an adult means evaluating advice you're given, and making decisions for yourself. It means thinking about the contingencies - what happens if my income doesn't grow? What if I lose my job? What if the neighborhood goes south and the house value declines? If you don't consider these things then you have acted stupidly. Even if there was a chorus of angels telling you that house prices will always go up, you still need to evaluate that advice. If you fail to evaluate it critically, you're acting stupidly. And frankly, accepting stupid advice does not absolve you of responsibility. Believing stupid people is a stupid thing to do. What if you didn't understand the contract? Well, mortgages are almost always a *huge* amount of money relative to your income. If you sign a contract you don't understand for a *huge* amount of money, well then you're stupid. Even if it was an "option ARM."

I've been told my whole life, "Life's tough for the stupid." I believe that will always be the case. If it's not overpriced mortgages, it's credit card debt, or annuities, or bad cars, or confidence men, or "swampland in Florida" or whatever the snake oil of the day is. Stupid people will do always stupid things, and no amount of good intentions or application of other people's money will stop that. I just wish they'd quit using my money to try.

tr said...

Gordon,
There is a difference between being an idiot and being stupid. Idiots have an excuse called "diminished mental capacity", and are generally prevented under law from entering into legal contracts. Stupid people are free to do so at their own peril.
You mentioned people who had been "talked into" an option ARM. Boy, they gave them a "good talking to" huh? You can only "talk" someone into something who wants it very badly and is willing to take a risk. They were told of the risk.
You also mentioned "financial experts who relentlessly said to buy as much house as you could afford". I doubt those were independent "financial" experts, more like real estate salespeople. Stupid people believe salespeople.
At any rate, the world needs stupid people. Stupid people who have not bought a house yet, just got a bit smarter. ARM's are probably a thing of the past, except for the Galactically Stupid.