Friday, February 20, 2009
The Rick Santelli's call for a "Chicago Tea Party" has mined a deep vein of resentment in the prudent savers, who are wondering why they are bailing out imprudent borrowers. Santelli's cry opened up a divide between the anti-business populists, who would love to blame the current crisis on bebonused bankers, and the self-sufficient, who know that crushing debt requires both lenders and borrowers. Both of these "parties" have left their mark on the political and cultural landscape of the United States, shaping the country just as dramatically as the pioneers who cleared the fields and the builders who made the highways, canals, and dams. The question is, which tradition will most capture the popular imagination in the next couple of years? Until this week I would have said the anti-business populists, but now I am not so sure.
CWCID: Glenn Reynolds.
It must be 10 years ago or more that I read a article about saving for your children's college education. The article went into great detail and outlined how "needs" requirements for scholarships and aid meant that every dollar a couple saved to take care of their own kids would give them a sad return on investment. So long ago and the economics of punishing the frugal has now spread in a debilitating cancer. Forced wealth redistribution is now commonplace.
I'm sorry, but here's a situation where the actual facts would be helpful in determining the culpability of those defaulting, or likely to default, on their mortgages. Nobody seems to know what the actual interest rates are that these ARM holders are paying, and what they're likely to reset to. Under these extraordinary circumstances, it doesn't seem unfair to allow those caught in a predatory deal to cheaply refinance their mortgage to a rate similar to what others are paying. What is so unfair about letting a guy paying 7.5% and nearing foreclosure, to pay the 5% rate his neighbor down the street is paying? Especially when his ARM would eventually come down to that level anyway. I know not everyone falls into this category, but before we start talking about Tea Parties, maybe we could get some statistics first. After all, predatory lending was a very real practice and patently unfair. For instance, some lenders routinely charged borrowers higher interest rates simply because they were black or from a poor neighborhood.
Rick Santelli is unaware, I assume, that populist sentiment is the exclusive preserve of the Obamanation. Rick's entire life will soon be exposed to public ridicule. His childrens foibles will become the stuff of network news, his mother-in-law's drinking habits will be dissected on the View, his voting record back to age 18 will be discussed on Herr Olbermanfuhrer's show and his wife's credit rating will be published on the front page of the New York Times. Tax issues will be "found". So much for him!
"What is so unfair about letting a guy paying 7.5% and nearing foreclosure, to pay the 5% rate his neighbor down the street is paying?".
Yeah! While we're at it, my neighbor has a 60 inch TV set. I want one. Also, this guy in town has a gun metal grey Mustang Shelby with a racing stripe. I want one. There are people in my town who pay less in property taxes than I pay. Why shouldn't I get that same deal?
Um, no. He's pretty much not capturing anyone's imagination except the tools who are dancing around this crisis. He prays to the TARP gods.
And guess what--the salt of the earth folk you seem to exhault... who's "hands were at the forge or the plow or the loom" and who built this nation are the ones suffering and have seen huskster behind the curtain up in Oz and are demanding that something be done which doesn't involve re-enriching hedge fund managers and bankers. So the minute they don't tow that line, they are all of a sudden lazy welfare sucking scum?
I wonder what Santelli would say behind closed doors, over a scotch and some good negro president jokes, about these good people who are indeed self-sufficient and proud...but who don't want to buy everything he's selling?
For the last time, stop the derangement and the horror show and try to be more like Susan Collins and other moderates and HELP. I'm that's what Rupert Murdoch told Col Allan (in a way). Maybe someone should tell Santelli.
By the way, Santelli's already been told to "grow up" by the White House (and my high school pal and frequent CNBC guest Jon Merriman), yet his Obama Derangement's mild compared to one of your captive Toms, Alan Keyes. Over on this side of the fence we rustle up popcorn and break out the malt liquor whenever it's Alan Keyes night. This clown makes Mike Steele look like Malcolm X. Check it out on Nat Turner's Revenge's sister site, Aunt Jemima's Revenge:
I've even met some bona fide Virginia rednecks who are wondering why on earth you all are tripping! Seems they want their state's public and business infrastructure bolstered, too. More than a few of them would like their unemployment benefits, and not be kicked out of their trailers. They'd make great guests on CNBC.
Mr. Chambers, it must be wonderful to be so morally superior and all-seeing that you can discern exactly what someone who doesn't agree with you - but who you likely never met - thinks "behind closed doors over a scotch and some good negro president jokes". You could never figure this out on your own, so allow me to clue you in - you are the most insufferably arrogant and narrow-minded individual I have ever seen express themselves in public.
@ Mr Chambers et al:
Predatory loans MY ASS!! The Democrats FORCED banks to loan to "disadvantaged" first time home buyers, offering them loans that would NEVER have been approved by the "Taxpayer" caste in our society.
Now, as expected, those loans have gone into default.
Pardon me sir...but any one with a full complement of DNA could have predicted this outcome!!
Don't you DARE insinuate that those of us who feel that our Congress and president has left mainstream thought behind are in some way inhumane.
There is absolutely NOTHING wrong with demanding "equal protection under the law".
Ther is absoulutely NOTHING wrong with decaring bankruptcy because you over stepped your bound, albeit with govermental assistance and imprimateur.
I am not a Socialist. Most Americans are not Socialists. Taking money from working Americans to pay the bad debt of idiots who signed up for ARM mortgages because they are mathematically incompetent to read the terms of the agreement IS NOT MY PROBLEM!!!
SANTELLI FOR SENATOR!!!
"What is so unfair about letting a guy paying 7.5% and nearing foreclosure, to pay the 5% rate his neighbor down the street is paying?"
He agreed to the contract. If he can't afford it, it's his own fucking fault. He is responsible for his own finances. Not you. Not me. Not us. Him.
And who is it unfair to? His lender, for one thing, who calculated their financial outlook based on the income from that loan. I'm sure they'll think twice before giving someone in his profile a loan again, won't they? His peers, for another, who won't receive such special treatment. Maybe they can apply to be Friends of Angelo...
"For instance, some lenders routinely charged borrowers higher interest rates simply because they were black"
Race baiting dogma, taken on faith and repeated ad nauseam. Prove it.
"or from a poor neighborhood."
You mean they might have shitty credit and/or otherwise be a risky loan? How dare a lender demand more favorable terms!
If chronic racism and predatory lending is such a widespread, deep rooted problem in our society, where was the self-righteous indignation and calls for justice, oh, a year ago? Or two? Or five?
These are just come-lately excuses to paint this as some sort of moral failure for which it is our *duty* to intervene. And I say bullshit to that.
I pay $600 a month on car notes. It's hard to meet these days. My neighbor only pays $400. Naturally, I deserve his rates! Screw my lender, it's unfair! I'm the target of predatory lending! Bail me out!
Doesn't that sound asinine?
Chambers, you disgust me. In college, you were never the sort of person who'd call someone a racist without knowing him or his views. What happened to you?
As someone who who bought a house with a mortgage that he could support on 1/3 of his income, so that he'd never be screwed like this and could afford to send his kids to college. Who doesn't have a Mercedes, not because I couldn't afford it, but because the Honda would do, I take real offense at the crap that you're spewing. Santelli might have been over the top, but I agree with the sentiment. There are people on my block who make half of what I do who have houses far grander than mine and who are in foreclosure. They took annual trips to Europe and Asia, bought boats and built pools. They still drive their BMWs and Porsche Cayennes. I'll be damned if I'll support them getting any help. But I guess that makes me a racist too. Go to hell.
When do we get the plan to ..
- return our 201k's back to 401k's
- return our stock portfolio back to it's former value
It's just too bad that those clowns mortgaged their asses off
so if they can get a bailout so can the rest of us
.. or better yet .. maybe like the kid who had his scoop of ice cream fall off his cone, we all learn to live with our choices and move on to a better tomorrow.
.. and please .. will somebody rid me of this pesky Chris Dodd
This guy opens his mouth with the regularity of an unwanted season bringing pestilence upon the land with each and every breath.
Chrissy's sweating - he made two posts. Usually Chrissy just shits and runs but he knows BO is going down fast. Wait 'til Obama gets jobbed by the Syrians and Iranians - Chrissy will get even more ungrammatical and incoherent.
Hey Chambers, for the last shut the f*ck up about how every white person is some kind of racist. NO ONE said the only people defaulting are brown for God's sake. PLENTY of white people are in foreclosure, lived high on the hog, and now are whining that they can't muscle their way thru. People got high rates because they had piggyback loans, or loans that were for literally MORE than the assessed value of their homes. It was apparently legal. But the banks did what they were allowed to do because Congress failed to act to put the brakes on this runaway train. Your exhaulted Obama was in the Senate, and probably voted "here!" if he voted at all. Pelosi, Reid, Frank, etc. were also there. So stop it.
BTW... I know some really funny jokes, and I'd bet you that you could tell me some side-splitter white guy jokes that only you hip black dudes tell over a few cocktails when no honkey be hanging around. C'mon, humnor me, but stop with the racist bile you spew.
The honest truth here is that there is more than enough to go around, and even Clinton is suggesting that Obama (a) stop blaming Bush, and (b) start talking 'hope' rather than 'crisis' and 'disaster'. Talk turkey to the Americans who didn't get us here. Let those who were irresponsible feel the pain, lose their house and tropheys, and move on already. If you hold stock or bonds in the lenders who fail, sue management if you want.
I own every last bit of real and personal property I have. No a dime owed. Where's my handout? Hell, even if I were blacker than deep space I wouldn't get anything. That sucks, when all I get is to foot the bill for some scumbag who ran up the credit cards, HELOC, etc. in search of la vida, and now gets to hit a reset button.
And for the record ... the 8K per loan Bama's put thru is laughable as a rolution to get people from the gates of foreclosure. He is stumbling badly here, and showing exactly what his credits said: he is unfit, and non-Presidential so far. His handlers are failing him.
I do wish him well, but he is missing some important sentiment here if he expects to hold the mid-term votes or a second term. That's why he's pissed the GOP held firm voting no. This is at the Dem's door.
"I wonder what Santelli would say behind closed doors, over a scotch and some good negro president jokes, about these good people who are indeed self-sufficient and proud"
You see? It starts. Santelli, and anyone who isn't delighted with our silly amatuer hour leaders are....racists! Yeah, that's the ticket!
Despicable little twits, like the good professor here, will defend the indefensible at any cost. Demean first, think second-- those are the Democrats politics.
The "New Era of Responsibility" has been reduced to this.
It's curious to see Chambers whistling past the graveyard over Santelli the racist and his apocryphal "bona fide Virginia rednecks" slavering over the pork trough like background grotesques for his What's the Matter with Kansas? fantasies.
Chambers' kind draws lines and foments class and race hatred to harvest as votes at the polls. It's worked so far, but we are approaching the point where my side starts accepting these lines and pushes back.
Sow the wind; Reap the whirlwind.
It is beneath pitiful hearing pipsqueak Chambers trying to shout against the rising gale.
No, little Mrs. Dawnfire, you sound asinine. We have no idea what the actual financial situations of these borrowers are. Yes, they agreed to the contract, but so did the bank who should never have given the loan in the first place if the borrower and property were such shaky propositions.
What you fail to account for is the collapse of the housing market (instigated by the securitization of these loans by the banks themselves) has prevented Joe Sixpack from taking any normal course of action because his property is now under water. He can't move to a cheaper place, refinance, or modify his mortgage -- he's trapped, and this is happening even to people who put 20% down.
All I'm saying is that a guy who has the same credit score as someone else, and has the same income as someone down the street, and would like to refinance their mortgage but cannot because his property is under water, should be able, under these circumstances, to have his mortgage's interest modified to a similar rate as everyone else, especially if the entity holding that loan note would like to do so as well. Like, duh.
With regards to unfair lending practices, perhaps you should read a recent study Communities in Crisis: Race and Mortgage Lending in the Twin Cities which found, among other discriminatory practices:
Very high income black, Hispanic and Asian applicants (applicants with incomes more than $157,000 per year) show denial rates higher than whites in the lowest-income category (less than $39,250 per year). The disparities are greatest for black borrowers. The denial rate for blacks with incomes above $157,000 was 25%, while it was just 11% for Whites making less than $39,250.
Read that again if you skimmed it.
Also check out the Department of Justice's Fair Lending Enforcement Program if you still believe we have lived in a fair society. An excerpt:
These differences hold regardless of income level. In comparing rates in low-income neighborhoods, the HUD study reported that 54% of African-American borrowers, but only 18% of white borrowers, obtained subprime loans. For moderate-income neighborhoods, the figures were 44% for African Americans and 10% for whites. In upper-income neighborhoods, the figures were 39% for African Americans and 6% for whites. [...]
While the availability of subprime loans is essential to borrowers with flawed credit, a recent Freddie Mac study found that 10-35% of subprime borrowers actually could qualify for prime or "A" credit. [...] Indeed, some subprime lenders, in seeking to attract investors, stress that many of their borrowers have "A" level credit (or just slightly below).
So hold off a little on the blind rage and rush to judgment. You other nincompoops don't deserve a response.
Now where is that Sports Illustrated post...
Lies, damned lies, and statistics.
Disparate Impact may be enshrined in case law, but the law is an ass. Anyone stupid enough to believe in disparate impact as prima facie proof of discrimination is an ass. Abandoning that much reason to believe so stupid a thing renders an individual subhuman.
Squealer can keep drawing those lines and keep shouting into the gale alongside Chambers.
Hey "Squealer"...just a quick note about your statistics.
The Univ. of Minnesota Law School's Institute for Race and Poverty conducted that study. They, in turn, are funded by the Open Society Foundation and The SOROS Foundation Network. On the IRP's list of Recommended Reading is Soros' book: "George Soros, The Crisis of Global Capitalism: Open Society Endangered. New York: Public Affairs, 1998."
I note that the actual credit scores of the alleged subprime mortgage "victims" was not a subject of disclosure....just their incomes.
Let's dump the silly studies about "borrowers of color" conducted by liberal think tanks...and concentrate on the dismal fact that many minorities ACTUALLY HAVE LOWER CREDIT SCORES than white people...more bankruptcy, more bad credit, etc. etc.
Were it not for moronic Democrats forcing lending institutions to ignore the lousy credit scores to "promote home ownership", this whole MESS would never have had a chance to get off the ground.
Studies like the one you quoted are the pseudo-justification for our current economic chaos.
The trouble with Socialism, it has been said, is that, eventually, you run out of other people's money!
1) That's Mr., not Mrs.
2) It's cute that you supply ideologically motivated statistics to support your case and expect everyone to nod their head and applaud. It's so naive. It ought to have been a tipoff that one of the conclusions of the this little report was to, "strengthen the Community Reinvestment Act to “increase access to affordable, prime credit for people who live in segregated communities of color,” which, if you've been paying attention, was one of the driving forces of this collapse. Also, that it came out a week and a half ago.
Hmm. Fits neatly into that 'come lately excuses' I mentioned, doesn't it?
3) As has already been pointed out, 'income' does not equal 'credit.' Your linked article also does not address the actual loans requested. A $30,000 yr. person requesting a car loan for $10,000 (1/3 of annual income) over 5 years is more reasonable than a $150,000 yr. person requesting a home loan for $100,000 (2/3 of annual income) over 5 years, for example.
4) "Yes, they agreed to the contract, but..."
Ooooh, so it isn't the borrower's responsibility to gauge their own worthiness or ability to repay the loan. They can't be held responsible for their own financial decisions, because they're apparently idiots. Rather, it's the lender's responsibility to decide if the borrower and his plans are fit for the loan.
Uh, I'm pretty sure that's what credit ratings are for. You know, the perfectly logical and rational explanation that you've utterly ignored that explains your fears of rampant, criminal racism. And which the Community Reinvestment Act urges banks to ignore. To 'help the colored,' you see, by giving them loans that they can't really afford or are not prepared to handle. Because not selling them the rope for which to hang themselves would be racist.
So, based on incomplete and partisan research, you end up blaming the banks for not doing something that the government (specifically Democrats; if you don't believe me, look up the history of the legislation and cross reference with 'Barney Frank' and 'Fannie Mae') has urged them not to do *for the express purpose* of helping minorities, which contributed to this whole mess.
Taken to its logical conclusion, you blame the Democrats. I'm glad we can agree. Stellar reasoning.
5) Does it ever occur to you, or any of you so-called thinking progressives out there, that this kind of hypothesized institutional and pervasive race discrimination that you like to rant about would be well-known in finance? Maybe? Maybe in real-estate too? And don't you think that sometime, somewhere, some non-racist person (maybe a black woman!) might possibly come into contact with this unjust policy and, I dunno, have a problem with it? Leak documents, perhaps? Sue? Punch out a supervisor?
Or is it just easier to blame a faceless, racist, conspiratorial 'system' than to label the thousands of people who make up that system as conspiratorial racists? Not that I think you'd have any problems doing so, just that it would be harder to get it to stick.
Path of least resistance. How typical.