Breaking! Tom Friedman says something completely right!!!!

[GoesTo11]

"So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made a fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so."

http://www.nytimes.com/2008/11/26/opinion/26friedman.html?ref=opinion

[BlooInBloo]

1. Shorter: Irresponsible lenders lending to irresponsible borrowers....

And as I've said before, at least the lenders knew that if/when the shit hit the fan, there was a high probability that the taxpayers would be forced to come to their rescue. The borrowers on the other hand had no reason whatsoever to to believe this. So on balance, I place a tad more blame on them.

[NikolaC]

11. I Heard on Mike and Randi's Shows

that over 60% of those borrowers were qualified for prime mortgages, but were instead manipulated into getting sub-prime loans. No one forced the lenders to give those loans. So, in my opinion, more of the blame belongs to the lenders.

[D-Lee]

14. Lender fraud has already been determined in litigation on subprime mortgages

and more similar findings may well come down the pike.

Don't forget that the manipulated interest rates by the Fed mislead a lot of people into thinking that interest rates would be low, even if they agreed to an adjustable rate loan.

The heavier burden should be placed on the more knowledgeable and sophisticated party to the transaction, which are the lenders and mortgage brokers.

So, while there may be some consumers who bear some blame, the lenders absolutely left aside responsible lending policies and "know your borrower" concepts -- which, if applied would have avoided all the risk to which our economy has been subjected.

[elleng]

2. I really don't like this stuff:

"People who had no business buying a home."

I certainly don't have numbers, but somehow I suspect that there are more problems with 'fancy' mortgages, ARMs etc., which LATER result in terms the owner can't meet, AND about which they were not well-informed. WHO in fact 'has no business buying a home?'

[sandnsea]

4. And who paid nothing for two years??

I don't like it either. The rest of it is accurate and they sold sold sold and didn't really give people any other option. Most people could still pay their mortgage payment if it hadn't reset to 10% or 15%. As soon as I heard the astronomical rate these loans were setting to, I knew it was all a planned scheme from the beginning. That's the investment vehicle they've been selling, the money they were supposed to make when the loans reset.

[pnwmom]

6. How about a 23 year old single man four months into his very first job

after graduating from college? Who had no money for a down payment and whose parents urged him not to buy the three bedroom house?

When I heard that this young man was buying a house for more than $300K, I knew the market had gone crazy. This 23 year old had no business buying a home at that point.

And of course, he lost the job (through no fault of his own) within a year, and when he left town for a new job, he ended up owing tens of thousands to the bank, in order to sell the damn thing.

[merwin]

7. ARMs are clearly spelled out.

You pay one rate for a certain length, then the rate jumps. Anyone spending hundreds of thousands of dollars should spend the time to think if they'll be able to make the payments 3 years later when they jump.

Fact is, many of the people who got loans willfully ignored that second part of the ARM, opting to worry about it later.

[elleng]

8. 'Clearly spelled out,' sure,

but who can predict what the bases for the adjustments will be, as they are FUTURE market conditions. 'Willfully ignored' sounds awfully hardnosed to me; people can't do other than 'worry about it later,' as the future is, indeed, unknown.

[merwin]

12. Even without the horrible market conditions, many of them wouldn't have been able to afford it.

They get enticed by the $1000/month payment on the huge house for a few years that skyrockets to like $4000/month.

The ONLY reason to buy a house like that is if you're going to sell it well before the ARM switches.

[psychmommy]

16. some folks were told, you'll be able to refinance and get a

better rate, before the arm adjusts. some folks were able to and others were not. some folks were misled. some folks lost their jobs, got a divorce, had a severe injury or illness. life happens and not always the way we want it too.

[merwin]

18. Yeah, some people were snowed. But, when you're making a purchase that large,

you need to actually READ the fine print. I know American culture is all about now now now, consume, buy more than you can afford. It's part of what got us into this in the first place. The banks shouldn't have been lending, and the people should have more common sense.

I guess maybe it's the same kind of people who go to casinos thinking they're going to hit it big. Easily fooled.

[psychmommy]

20. the predatory lending

which was proved in nyc and is being litigated in other cities is another consideration. it is just a sad state of affairs. we have many for sale signs and empty homes around here. new developments with empty used and new homes.

[Submariner]

3. I guess those Harvard, Yale, Princeton, and Stanford MBA's ain't worth shit then

And I'm guessing that our upper crust financial adviser types with these elite MBA's only learned how to game the system for short term gain rather than performing ethically and efficiently. These punks need to be regulated. I certainly would not be proud to work in that profession. Total failures.

[sandnsea]

5. They're out of touch with working people

They thought people would fork over another $500 a month to keep their houses, the way people had in the past. I don't know why they couldn't figure out there was no $500 a month for people to get, except that they've never had to actually work for a living.

[olegramps]

9. No over site of the bankers

Their was no over site of the banking community to assure that the banks were not making risky loans that we could eventually bring about the banks failure. I have not heard want Obama proposes in this regard. The FDIC should have prevented this since it would be our money that would have to be used to bail out the depositors in the event of a bank's failure. It is just another fiasco like the Saving and Loan scandal in which Neil Bush was deeply involved.

[Locrian]

10. Friedman should rot in hell

"That’s how we got here — a near total breakdown of responsibility at every link in our financial chain, and now we either bail out the people who brought us here or risk a total systemic crash."


Wow. Too little, too late Tommy boy...


Fuck you Friedman. I cant STAND that guy. His "gee golly globalism" and "free market leg humping" that he is so well know for is EXACTLY the kind of cheer leading helped get us into this mess. His worship of all things business / free market, his pumping sunshine up the asses of every moron CEO he met. Pathetic.

[Phred42]

13. Yep -

Do you beleive he is STILL pushing the Earth is flat? :crazy:

[boomerbust]

15. What about CDS

These crooks were also selling Credit Default Swaps. A worthless insurance scam insuring these useless mortgage securities. They were selling insurance on something they knew was going to fail.

[tonycinla]

17. A few more

There were a number of other professionals who made money while the rest of us slept.Real estate agents and agencies,insurance agents,title companies,real estate appraisers,insurance companies county governments,mortgage brokers all made money.Here in Florida the counties raised taxes on real estate and just raked in the money.

[struggle4progress]

19. Unsurprisingly, Tommy doesn't remember the Bush Administration pushing this crap:

President Bush and Home Ownership
http://bigpicture.typepad.com/comments/2008/10/president-bush.html

[lame54]

22. Nice find...

Needs to be an OP

[lame54]

21. People who have no business getting rich by polluting the talk show circuit...

by being wrong time and time again yet are still being booked for years on end i.e. bill kristol

[Joe Chi Minh]

23. How about this:

"Next, the baby nurse he’d hired back in 1997 to take care of his newborn twin daughters phoned him. “She was this lovely woman from Jamaica,” he says. “One day she calls me and says she and her sister own five townhouses in Queens. I said, ‘How did that happen?’ ” It happened because after they bought the first one and its value rose, the lenders came and suggested they refinance and take out $250,000, which they used to buy another one. Then the price of that one rose too, and they repeated the experiment. “By the time they were done,” Eisman says, “they owned five of them, the market was falling, and they couldn’t make any of the payments.”


... from this extraordinary article:

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?print=true#

Evidently, in the US and UK, quite apart from essential psychopaths, there is an enormous raft of adaptive psychopaths throughout our societies, who have effectively been conditioned in this way by the West's overtly-satanic, US-driven business culture. And they'd be mainly managerial! The old Ayatollah knew a thing or two.