LET’S NOT BLAME THE BORROWER

Editor’s Comment: Kwak takes on the entire “immoral borrower” myth quickly and easily here. The worst you can say about the borrower is the best you can say about the banker who got us into this mess.

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Want more? Read 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown.

Written by James Kwak

June 7, 2010 at 9:11 am

Interview in The Straddler

By James Kwak

The Straddler, an online interdisciplinary publication, has an extended interview with me, of all people, so you can see what I talk like.

This is one section I’m proud of:

“Middle class wages have been declining for ten years and stagnant for thirty years, and if you have a financial system that allows people making $15,000 a year to take out $400,000 mortgages, I don’t think that’s the fault of the guy making $15,000.  I think it’s the fault of the financial system.

“But, let’s say I’m a guy who makes $15,000 a year.  I realize, wow, I can get a $400,000 mortgage and I can live in this house for a few years, and if housing prices go up, I can flip it and I can actually make a couple hundred thousand dollars.  And let’s say I’m really clever, and I say, if housing prices go down, I’ll just walk away and I will have gotten to live in a really nice house for three years at no cost to myself.  I mean, that’s the worst, most cynical spin you can put on it, right?  But this is exactly what people on Wall Street do.  The person who is criticizing the janitor for doing this is the same person who thinks that businesses should exploit every legal opportunity to make profits.  So even if you attribute the worst possible state of mind to the guy making $15,000, he’s still just doing what any businessman should do under the circumstances.  But our national ideology somehow doesn’t allow us to think about it in those terms.”

Enjoy.

5 Responses

  1. @imbecilejudge…..I agree, let them all go down and underwater…….. There are enough credit unions that are now letting everyone join without having to be in some part of a organization…..ALL BANKS CAN GO TO HELL……That’s why I don’t deal with any banks and will never again deal with any.

  2. Bob M

    My thoughts exactly.

    Nothing more than a Crisis by Design and Calculated Deceit.
    Problem, Reaction , Solution. Anything to Herd the sheep.

  3. TBTF == To Big To Be Allowed to EXIST.

    Break up every one of the TBTF banks immediately.

  4. I am no economist; however, when the banks started to force appraisers to commit appraisal fraud with the threat of being black listed and no work, in order to write more paper and sell more toxic certificates to the unsuspecting investor, so they could steal as much money as they could from the American people, and the FED raised the interest rate 24 consecutive times which began at the end 0f 2005, what did they think was going to happen to all the sub-prime loans there would re-set and re-set?
    They knew exactly what they were doing.
    The evidence to their scheme is attributed to the Fact they had the software programs reworked in 1998 to target sub-prime customers; those same programs predicted with stunning accuracy when these loans would default and the borrower would go into default.
    This game has been rigged from its conception, and any person with any sense knows that. I am not saying that it was plain for all to see, not the laymen, but the criminals responsible for this surely knew what they were doing and never thought for a second that anyone would catch on, evidence of their arrogance. The politicians knew exactly what was happening and allowed it to happen.
    I do not believe in coincidences; Therefore, I look at what transpired from 1998 – 2000. In this time frame, the Glass Stiegel Act 0f 1934 was abolished; MERS was created, the enactment of the Gramm Leach Bliley Act of 1999 which became effective in 2000. Everything that has happened since has been by design. Nothing operates in a vacuum. You have to ask yourself, why would they strip the peoples protect which the Glass Stiegel Act provided? Why was MERS created contemporaneously?
    What follows is in no way, the reasons for which these steps were taken, however, to the tax payer and the town and city coffers, if there are 60 Million mortgages, and let’s just say for a moment, the criminals adhered to the recording laws, if every assignment was recorded as required (here in MA the recording fee last time I checked was $75.00) so if they recorded just one assignment, it would amount to 4.5 Billion. How many times has there been assignment through the securitization chain? How much money have they stolen from all the States and towns????
    There should be an audit, and the states should recoup that money. They do not care who they steal from, just so long as the money winds up in their pockets.
    This Ponzi scheme is in no way, shape or form the borrowers fault.
    Food for thought
    Time to go Vote!
    BM

  5. F$%^ the BANKS,,LET them ALL go DOWN…

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