Wednesday, October 22, 2008


It’s nice to know that I’m not stupid.

That what I’ve been seeing and writing about since 2005 wasn’t a figment of my imagination.

And because people were too greedy or too clueless to see the warning signs all of us are paying the price.

Yeah I know that borrowing beyond one’s means for a home they couldn’t afford played a huge part in this mess.

But if that was the beginning of the end, foreclosures were the final nail in the coffin.

Basing business decisions on asset back securities that can’t be reliably verified is little more than a shell game.

But I think the powers that be kinda picked up the clue phone on that one.

And now the American public is left picking up a 700 billion dollar tab.

And the punch line is it may not be enough.

But the fascinating wrinkle in this whole mess is how Cook County Sheriff Tom Dart has taken a stand against tenant foreclosure evictions.

A sense of moral justice and easy on the eyes? Like that happens everyday.

With Cook County’s foreclosures tripling this year to over 40,000, Sheriff Dart said that too many innocent renters were being evicted in a process not of their own making.

Now where did I hear that before?

Then of course a nice little community group from Albany Park neighborhood did their part by alerting the Sheriff to the fact of the innocents trapped in this foolishness.

And there’s the rub my friends.

While I’m a huge fan of personal responsibility, as a culture we’ve gotten away from the notion of looking out for the collective.

Or does that smack of socialism?

While potential subsidized housing and mortgage fraud may not necessarily be poppin’ off in
your ‘hood, it doesn’t mean that somewhere down the line it won’t affect you personally.

So while some people sat up and tisk tisked about the high mortgage defaults on the south and west side of Chicago, little did they know that similar situations were happening all over the country.

A financial storm was brewing and little was done about it in my humble opinion due to the fact of where it was happening and who was immediately affected.

That’s my nice way of saying racism and classism reared its ugly head in an incredibly genteel way.

NIMBYism at it’s finest.

Yes, some people made wrong choices in attempting to afford too much house and signing their name on the dotted line of a mortgage product whose terms they didn’t understand.

But it pretty much a foregone conclusion that the mortgage industry and a whole and the packaging of those mortgage backed assets---with little oversight or regulation might I add---was a time bomb waiting to happen.

And now it’s come to this my friends---my backyard is your backyard.

Too many foreclosures in too many neighborhoods have brought down some venerable and far reaching institutions.

Hell, the government of Iceland might have to go on Link.

So while we may not be our brother’s keeper, it may be on our best interests to listen to the far off drumbeats before they become deafening.

1 comment:

Laura Louzader said...

Our authorities saw this situation setting up in 2003, 2004, 2005, but just kept on feeding the monster with lower interest rates, ever more government guaranteed loans, and evermore implied guarantees of bailouts when things should go awry.

By 2005 the situation to come was set in stone, for never in the history of the world did any country ever have a larger overhang of public and private debt than we did, as a percentage of GDP. In 2004, Paul Volcker, the conservative inflation hawk former FED chairman, issued dire warnings concerning the massive debt bubble and the unprecedented level of risk in the system, but no one listened.

The whole bloody country is in default and it's going to get worse before it gets better. The low-end home defaults are nothing next to the high-end. Prime is just now unwinding, and commercial is going to be explosive.

And throwing evermore taxpayer money is only going to make it worse, not better, for it only puts us in grave danger of a treasury default, the ultimate disaster. Thus far, government interventions, including secret loans to banks over and beyond the highly publicized interventions such as the housing rescue and financial rescue bills, bring the total tote to FIVE TRILLION DOLLARS. And we aren't done.

I'm only glad it started to unravel and to be revealed in its towering ugliness BEFORE the election and not after.