Blamestorming - "Sub-Prime" Edition (channeling some Rude Pundit myself)

Funnily enough, there was a cranky thread over on metaquotes on this overnight, but NPR planted the seed for this earlier in the week.

The widespread panic (or "uncertainty" if you're an economist or a pussy) that has come in the aftermath of several mortgage investment funds/firms getting caught by their own bald avarice is actually pretty funny. Everyone talks about how well "the market" self-corrects and all that; what we're seeing here is a large-print edition of what that looks like.

Get a good fucking look. This is what happens when The Market takes the unscrupulous out behind the woodshed with Junior's Louisville Slugger and a roll of duct tape. Shit gets fucked up, because it had that fucking coming to it; had, can you dig this, been asking for it, by flaunting how edgy and high-risk (and high-reward, maybe) a fund it could cobble together and sucker somebody into buying.

It worked for the Pet Rock and Paris Hilton, it can work for sub-prime loan funds!

Greed and culpability make for a powerful tonic for stupidity.

But it's funny, listening to talking heads very narrowly pussyfoot around assigning blame - "It's the fault of Moody's and Standard & Poor's rating services, which gave these shitty instruments glowing marks! They told the banks that put them together exactly how many insect legs and rat testicles were safe in that pound of broccoli!"

There's well-deserved blame there, to be certain, but that is NOT where the shit needs to stop splattering.

How about those lenders who built the questionable instruments in the first place? Anybody believe they didn't know how sketchy these things were? You know when you're making a bucket of jungle punch when you've substituted Mr. Boston for Absolut, and shouldn't be surprised when somebody yarks in the linen closet or tells you the next afternoon about the army of pickaxe-wielding garden gnomes infesting their skull.

Greed and culpability make for a powerful tonic for stupidity.

But, going back even further (after all, we're sub-priming this pump from end to beginning); what about all those banks that made loans to folks with lower credit scores? Now, let me be clear - having a credit score over or under 650, or whatever the sub-prime threshold is, isn't the end-all, be-all determinant for somebody's ability to pay a mortgage... but in the interest of making a quick and easy buck, lenders stopped doing their due diligence - finding out if Mr. Homebuyer was actually making that $55k he claimed, or Ms. Homebuyer was hiding some student loans. Nope, they just wanted that signature on the dotted line so they could start earning interest on principal and escrow. "Why would they lie to us about their income and financial situation?"

Greed and culpability make for a powerful tonic for stupidity.

Adjustable-rate, interest-only, and the litany of other "entice you now, fuck you later" mortgages were just a symptom of this; the fact that they are made of fail is practically beside the point.

Which brings us to the folks getting the mortgages themselves - READ THE FUCKING PAPERWORK. This is the single biggest purchase in your life. Don't embellish your earnings and assets to compensate for having an undersized cock just so you can store it in an oversized foreclosure waiting to happen.

I've said it before, and I'll say it one last time:

Greed and culpability make for a powerful tonic for stupidity.

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