March 12, 2008

Here, have $500,000. Go ahead. Take it. You know you want it. Nah, you don't need a job. Go out, buy a nice house, maybe a Hummer too!


Looking back at it, it was just so incredibly STUPID.

It was stupid for the homedebtor to "buy" a house at a price that made no sense, that they had no chance of keeping

It was stupid for the mortgage brokers to commit obvious mortgage fraud, and game the system for short term gain

It was stupid for realtors and the NAR to destroy their profession with their lies, deception and spin

It was stupid for builders to buy up land at any price and build homes as fast as they could, thinking the Ponzi Scheme would never end

It was stupid for Countrywide and Indymac employees to go along with the scam instead of raising a red flag and blowing a whistle

It was stupid for Fannie and Freddie to buy any Alt-A garbage, exposing the US taxpayer to their stupidity

It was stupid for the mainstream media to cheerlead the housing bubble, when they should have been shouting about the mortgage fraud and stupid prices instead

It was stupid for George Bush to cheerlead housing when prices made no sense with his 'ownership society' Ponzi Scheme promotion

It was stupid for Alan Greespan and Ben Bernanke to do nothing to regulate the lenders as they were mandated to do

It was stupid for the banks, governments and investors who bought the garbage loan CDOs

Bottom line - EVERYONE involved in home buying got stupid. EVERYONE lost their minds. However, unless they're prosecuted, the scamsters and fraudsters will come out ahead. They'll know crime did pay. And they won't be stupid after all.

30 comments:

coke adds life said...

Stupid is as stupid does.

Looking back, the entire thing was idiotic. At the beginning it all looked OK, but then things got out of hand.

Coke Out!

Anonymous said...

it was stupid for renters to rent during the greatest asset boom in the history of manking.

Let's compare shall we:

"SMART" renter: rented shithole 1 bed 1 bath from 2000-2006. Paid bills on time, never borrowed a dime. In 2008 still lives in shithole 1 bed 1 bath, has nothing to show for it.

"STUPID" owner lived in McMansion paying the same in mortgage as renter using $0 neg/option ARM and getting a tax break on top of it. In 2004 refinanced and took out $150K in equity. In 2006 refinanced again taking out $75K in equity. In 2007 defaulted, walked away with $0.

Has nothing to show for it....except the trips to Fiji, the BMWs, the plasma TVs, the designer clothes, the iPhones, the 5 star restaurant meals...all bought with borrowed equity money that will never have to be paid back.

Boy I'll tell you those FBs sure were dumb.

Face it renters, you were idiots.

Anonymous said...

But But Suzanne said......

a.creampuff said...

There was cheerleading, but many articles at the time said 'this will work out as long as the price of houses keeps going up'.

Anonymous said...

It was stupid of Alan Greenspan to light the match with his classic: 'People need to switch out of their fixed rate mortgages to adjustible rate mortgages'.

Of course, he knew exactly what he was doing. By doing so, he was able to create a 2nd bubble after the stock market bubble had popped. This allowed him to retire before the SHTF, giving the appearance that he was the glue that held everything together. He was wrong. Those with an IQ know what he did.

Anonymous said...

Basically, everyone imagined themselves in the top 1% who can make the other 99% work for them.

Anonymous said...

homedebtors weren't stupid. They're the winners. By the time the housing market has bottomed and started to work its way back up to the mean they'll be out of bankruptcy and in the exact same spot as the renters. Other than a much higher standard of living for a few years at the beginning there.

Of course those who took their HELOC and stashed the case in a swiss bank account, or gold stored in foreign vaults are the real winners.

Anonymous said...

Greed clouds the judgement process.
We had an abundance of greed at work.

OriginalFrank said...

You left off:

* stupid of the insurers of the CDOs and MI Lenders to offer the foolish rates they did given the detectable insanities. They are going bankrupt as early casualities of the mess

* stupid of Bernacke to now be flooding the country with dollars (via discount rate drops) to try to rescue banks. Instead, he is beggaring us all through inflation

* stupid of Bernacke to be accepting highly suspect CDO/MBS "assets" for high-value loans to Banks, etc.

* stupid of homeowners beggaring themselves by spending HELOCs supported *temporary* house price inflation fueled by speculators.

The list could go on and on. This country is in for deep trouble due to the greed and "gotta have it now!" of many, and the shortsightedness of even more.

consultant said...

We are in the midst of the collapse of civil authority in our country. All the people who say they want government off their back obviously don't understand or care about the important role of 'good' government. Without 'good' government, there are few rules and little enforcement. The collapse of government means the rise of tribes, clans-thugocracy.

Reagan said he wanted to get government off our backs. Be careful what you wish for.

Anonymous said...

The FB's spent all the free money on crap and now they're broke, owe tens of thousands in credit card debt and have bad credit. But now they're addicted to the high roller lifestyle that they no longer have and will be miserable for the rest of their pathetic lives, constantly looking for the next scam.

redondo_beach_dude said...

Has nothing to show for it....except the trips to Fiji, the BMWs, the plasma TVs, the designer clothes, the iPhones, the 5 star restaurant meals...all bought with borrowed equity money that will never have to be paid back.

Boy I'll tell you those FBs sure were dumb.

Face it renters, you were idiots.


At least their credit won't be shot for the rest of their lives.

Anonymous said...

It's not stupidity. It is GREED.

You can cure human stupidity but not greed. So a "free" society will always have bubbles.

Targeting the seven sins, you will always make money. This is how capitalism works.

pwnd said...

Is that how you define success? BMWs, 5 star meals, and plasma screens? What a loser you are.

You know it wasn't that long ago that people defined success by the quality of someone's character. Benjamin Franklin was seen as THE most successful man of his time, but was never filthy rich.

I hope we can go back to a time when being a person of integrity is seen as success and, not by how many plasmas you bought.

Anonymous said...

All of this economic phenonemon can be explained in one word. Globalism.

USA just hasn't come to terms yet that globalism is killing the general American wealth for the enrichment of few globalist elites.

USA workers losing good paying jobs and depressing overall American wages and using labor arbitrage to 3rd world hell holes has economic consequences. Deflation.

Current account deficits, govt budget deficits and personal & national credit bubbles are the result of the current failing attempt to maintain the economic standard or status quo.

Simply put, the consequence of lowered American wages means America real estate will continue over time to go down and down and down. It's globalism. AKA the race to the bottom.

pwnd said...

...another thing. where do all these Dopes-types come up with the "1 bdrm shit-hole" paradigm.

FYI - For the last 4 years, I've rented houses; not apartments. Right now I'm in a 2 bed, 2 bath townhouse in Pacific Palisaides, 1/2 mile from the beach.

At $3350/mo I'm paying exactly half what the mortgage would be. I don't get the interest write-off, but that would surely throw me into AMT so I wouldn't get to take full advantage of it anyway.

Amtex said...

Actually the renters are WAY ahead. They saved their money and will buy assets at pennies on the dollar. Assets they will own free and clear..forever!

The equity thieves had 3-4 years of luxury followed by nothing but debt and no credit forever.

Sounds like the renter/savers will have decades of laughs while the spender/borrowers had about 3.

Andrew Hac said...

And last but not least and most important of all on the "stupid" list:::

AMERICANO ARE STUPID. It is the greed that makes the mind goes senile...

#####
The Americano nation and its pitiful occupants's fate has entered a dark age, an ominous age filled with peril and uncertainty. An age of unimaginable stench emanating from the fart of the Housing Bubble. Who do you have to blame but yourself when you bough a $700K house on a $40K annual salary as a low-life telemarketer, a StarBuck cashier, a convenient store sales associate ? Add in a fat-ass, lazy, couch potatoes, hoity-toity wify, a couple of redneck, foul breath, rotten-teeth kids and you now have a perfect storm for the crashing of not only the Americano economy but the Americano family value as well.

Thus, with all due respect, I will ask you these $69,000 Americano-going-down-the-toilet-dollar-currency questions:

IS THE AMERICANO roasted nicely yet like a grilled snapper turtle ?

WILL THE AMERICANO ever find a shred of WMD in Iraq, the little Islamic nation that the Americano president DUBYA SHRUB and his side-kick PENIS SHOOTER had decided to invade few years ago ?

WHAT IS INSIDE the tummy of most Americano ? Greedy Worm and Sh*ts mostly, perhaps ?

WILL the famous Snapper Turtle outlive the pompous Americano Australopithecus ?

WHEN WILL THE AMERICANO "Gone With The Wind" ?

Frank@Scottsdale-Sucks.com said...

""SMART" renter: rented shithole 1 bed 1 bath from 2000-2006. Paid bills on time, never borrowed a dime. In 2008 still lives in shithole 1 bed 1 bath, has nothing to show for it."

Actually, in the scheme you posted, anon pussy, the "smart" homedebtor would wind up being prosecuted for bankruptcy fraud. And will spend the rest of his life working at McDonald's to live in the sh*thole 1-bedroom apartment after his credit and criminal record are destroyed.

Frank@Scottsdale-Sucks.com said...

We had lunch yesterday with a friend who lives in a downtown San Diego condo. He said the mood down there has really turned sour now that everyone has to go back to the reality of working for a living instead of getting a bunch of free money from the housing ATM and stock market.

Sad.

America a doomed and dying bad experiment after all: said...

"I hope we can go back to a time when being a person of integrity is seen as success and, not by how many plasmas you bought.

March 12, 2008 3:01 PM"

You MUST mean like el presidente George Bushco (the entire rotten family)and Dick Cheney (entire rotten family) and Colin Powell and Condi Rice and Wolfowicz and Rumsfeld and Betrayus and Mozilo and Lay and Spitzer and Neil 'Silverado' Bush and Jackson and Sharpton and and

Doesn't make a pretty picture, does it?

America is DEAD. Mail back the keys attn: Emporer/China.

Anonymous said...

pwnd said...

Is that how you define success? BMWs, 5 star meals, and plasma screens? What a loser you are.

You know it wasn't that long ago that people defined success by the quality of someone's character. Benjamin Franklin was seen as THE most successful man of his time, but was never filthy rich.

I hope we can go back to a time when being a person of integrity is seen as success and, not by how many plasmas you bought.

The quest for status is the addiction of an empty soul, just as booze and drugs are. Once you are addicted to status seeking you have acquired a chronic incurable disease. You may be forced to live without it but you will always lust for it and never be free of the nag. We have an entire country of these people. Personally, I think it would be great for the rest of us if we threw all of the status addicts in rehab, lock the door and throw away the key. Let them sit around and impress each other 24/7.

New term Andrew? Can't decide between Homosexual Erectus or
Americano Australopithecus. Too funny.

Anonymous said...

Guess what FB's? Most employers do a credit check these days. The bad credit, foreclosure and bankruptcy will come back to haunt you for years, especially if you want to work in the financial or IT sector. I hope you enjoyed your short-lived "success" at fraud, the new american dream.

Anonymous said...

I had warned several people about the housing market and soon to follow bursting bubble and know deflating home values.
I just did not understand why people were doing this.
NO ONE LISTEN, the three people that I know are in very serious trouble of loosing there homes. What can I say, The
above says it all.

Frank@Scottsdale-Sucks.com said...

"...another thing. where do all these Dopes-types come up with the "1 bdrm shit-hole" paradigm.

FYI - For the last 4 years, I've rented houses; not apartments. Right now I'm in a 2 bed, 2 bath townhouse in Pacific Palisaides, 1/2 mile from the beach.

At $3350/mo I'm paying exactly half what the mortgage would be. I don't get the interest write-off, but that would surely throw me into AMT so I wouldn't get to take full advantage of it anyway."


Congrats - nice job - we're doing the same in Newport Beach - at $3,600/month I'm paying about a THIRD of what the mortgage, taxes, insurance, HOA, and upkeep would cost for a brand-new seriously nice McMansion 2 miles from the beach.

I think these angry homedebtors are pulling the "1-br shithole" crap because they "bought" a 1,000 square foot 1950 ranch shack for $600k in the Arcadia section of Phoenix or similar bubble neighborhoods and can't stand the fact that we live in luxury for a fraction of what they pay to live in a rotting dump.

On the mortgage interest deduction, I don't qualify for it due to income as a single person anyway. Most people don't know it phases out at higher incomes. An accountant once told me all the horror stories of homedebtors who come in and learn they make too much money to get the deduction and are faced with an insane tax bill.

Anonymous said...

The lenders in the future have the option of never giving a loan again to some creep that walked or gambled ,after the prices go down to dirt cheap , and the renters get rewarded .

Lenders are not going to want to touch you walk-a-ways with a 10 foot pole because you will be considered high risk ,foul smelling criminals .

Remember you smart ass home loan walk-a way gambling as*hole ,that Fraud carries a 10 year statue of limitation . So go play with your ill-gotten gain and realize that your mommy and daddy didn't raise you right .

Anonymous said...

Great list--except you forgot one--those investors that bought the garbage CDOs, did so because they were rated AAA.

It was STUPID that the ratings agencies rubber stamped BILLIONS in risky debt as being safe.

I mean, it was there ONE, ONLY JOB to ACCURATELY rate the risk, and they totally abdicated. They should give all their income BACK to the ones that PAID them for accurate ratings in the past 5 years.

If they had rated accurately, risky mortgage debt would have PREVENTED the no-doc and subprime and teaser-rate loans, and we wouldn't have $50+ BILLION PER MONTH of mortgage debt going nuclear this year!

Anonymous said...

Don't forget it was stupid for the unaccountable ratings agencies to rate some if these motgage backed secrities as Triple A. They deserve their kicks in the butt.

Anonymous said...

I don't know how so many normal check and balance systems didn't work at all during this fake run-up of prices on real estate ,but it would start with the ratings on risk being incorrect ,which kept the money supply for junk loans coming in .

How can you have so many different watch-dog agencies condoning this stupid bubble .

Everybody is shocked at the price of oil going up ,yet no one wanted to question real estate .

And on top of everything, the main stream media was bought off by ad
revenue . Appraisers were bought off by the need to survive ,with no protection .

Employees for lenders and escrow companies etc were bought off for need of income .

Rating agencies were blinded for need of income .

Realtors and loan agents were blind for need of easy money income .

Borrowers and speculators were blind for need and want of money .

Does anyone think that maybe everyone was taking the opportunity to make money in a insecure world job-wise and retirement wise?.How so many people could fall for the get rich quick scheme of the century ,or close their eyes to it ,tells me that people were looking for security in a insecure world .
You can't have this many people be this stupid unless something is up .I agree with the poster that thinks that job loss due to global markets had something to do with it . The rein of the Corporations had something to do with it . Maybe 911 set the stage for people's reactions .

Credit cards have been around for a long time ,yet people have never abused them to this degree they do today . Are people so insecure about the future that they just want to live for today .

The young people hate the older baby boomers and everybody seems to be pissed that America isn't the land of easy milk and honey anymore .

I'm telling you that the way people were acting about real estate was more like people in shock or brainwashed or fearful ,than people making rational decisions.I have never seen so many people willing to commit fraud to obtain real estate . Something is up which can't be explain by the greed factor alone .

Anonymous said...

Against stupidity even the gods themselves contend in vain.

Fredrich Schiller

'Nuff said.

CathyG