Friday, April 4, 2008

The American economy: Who's steering this thing, anyway?

With our economy in a downward spiral, you might think our Harvard MBA president would be the one to take charge and turn this thing around. (Oh, did you forget he has a Harvard MBA? If I went to Harvard, I would be asking for my money back right about now.) But instead of dealing with our economic crisis at home, President Bush is busying himself with issues such as fighting for Ukraine to gain membership into NATO. Uh, 'k.

Meanwhile, Fed Chairman Bernanke is left to sell the Administration's "plan" and defend the decision to assist a large brokerage firm while telling homeowners in similar crisis that they are on their own. To be fair, he did try to help homeowners by telling them again about the government hotline number. But, -- just like in December -- he gave out the wrong number. So maybe it's best if he just stays out of this whole thing.

Hello? Harvard University Admissions Office?

It is truly unfortunate that we have such an imbecile in office, when we are crying out for a leader. Many people are losing their homes due to no fault of their own, for example single women homeowners have been hit hard, and even renters are losing their homes. But we also are a nation of people who think we can have it all. Last night I did a doubletake when I saw a story on ABC News about a couple that successfully fought the bank's foreclosure on their home. Now I don't know all the details about this family or about the housing market in New York. But I do know that they made a combined income of $30,000 and they bought a $335,000 house.

You do the math.

The mortgage company did things that were illegal. They told the couple they could get a fixed loan, and then at signing changed the terms into a balloon rate. What bank thinks a family making $30,000 a year will be able to pay off a $335,000 house at 14% interest rate? That's a house payment of almost $4,000 a month! That is more than this couple makes a month! It's despicable that the bank did this.

But what was this couple, and all the rest just like them, thinking? I'm sure they loved the house, and the neighborhood. I'm sure it was hard to find something they could afford. But what has happened to us when we buy things that we just simply cannot afford? The Baltimore Sun ran a story last month entitled Affluent are also losing their homes. Am I the only one who thinks: "Then maybe they're not so affluent?" This is where we need leadership from the top, someone to look at the balance of the nation's economy and the welfare of the people. Someone who can honestly say to the housing industry: You know what? You need to start building houses that people can afford.

But our leader is in Romania, fighting a lost battle to get Ukraine into NATO. Where's a Harvard MBA when you need one? Oh, here he is:


Cootamundra W said...

You are so correct! Affordable housing is not what the builders produce.
And then you get Congress trying to pass $6 BILLION tax breaks for the home building industry.....
It seems to me that too many people "in charge" are out of touch with reality!!!

Cootamundra W said...

GW and spouse look awfully happy in the photo in Romania. Is that because they are vampires of sorts - sucking the life blood out of us....?

Sue J said...

I think he's been sucking on something, all right -- maybe some jello shots!

odds-maker said...

sue j, in reference to Bush at Harvard B-school, you said you'd ask for your money back. Why?

If you really believed Bush fiscal policies are not your cup of tea, it seems it would make more sense to drop out and go to a school teaching methods more to your liking. However, with your comment, you said you would expect a Harvard B-school education for free. By that you would remain in a situation in which you did not believe and your presence would simultaneously prevent someone else from entering his dream school. Nice.

Meanwhile, there's no news in yet another claim by an individual or couple that the devil made them do it. The devil made them borrow money to buy a house which required payments beyond the reach of their wallets.

Of course the more disturbing part of your story about the couple buying a $335,000 house on a $30,000 income was the fact that this is ONE example that MIGHT have involved fraud.

People in financial straits lie through their teeth every day. Some lie to get the money that puts them in their tough position. I don't know what happened with this couple. They claim they were deceived. Maybe they were, maybe they're lying.

Meanwhile, many financial institutions have built successful businesses on lending money to people with non-standard credit profiles.

GreenPoint Bank in New York City was a prominent lender to people who had sketchy credit histories. Many were recent immigrants. Some owned cash businesses like convenience stores, dry cleaners and restaurants.

Greenpoint offerred LOW-documentation loans and NO-documentation loans. Lots of people prefer to keep their financial facts to themselves and are willing to make big downpayments and pay higher mortgage rates in exchange for no probing into their affairs.

It worked. Greenpoint was so successful that several years ago it was acquired by another bank.

Of course journalists are almost always total idiots with numbers. Hence, they assume many strange ideas.

Ten years ago blacks and hispanics complained they were suffering from discriminatory lending practices that shut them out of the real estate market. In response, credit was made available. Blacks and hispanics began buying homes in much greater numbers in the last ten years.

To expand lending among blacks and hispanics, lending standards were lowered. Smaller and smaller downpayments were required. IN lots of cases, even the downpayment was borrowed.

As a result, some people assumed debt they cannot repay. Big deal. Lenders speculated a little too much. They gave money to people who were bad bets.

Now, again, it is lenders who are flayed in the press. Not borrowers who engaged in Predatory Borrowing. But lenders who gave money to people with questionable credit.

Then you cited an article claiming the Affluent are losing their homes. Nonsense.

If someone is Affluent and he is about to lose his home, he has made an asset-allocation decision to let it go. He has decided the best use of his assets is elsewhere. If the market value of a house is below the debt held by the owner, the owner has a good reason to default, especially if he is "affluent."

He'll have no trouble buying another house -- for a lower price.

Sue J said...

odds-maker, I didn't bite when you tried to start trouble over at Yikes! with your ridiculous comment that there have been no successful women scientists, business leaders, or even athletes. And I won't bite here. But thanks for taking the time to write.

odds-maker said...

sue j, believe what you want, but there are no top female scientists -- like I said, no Einsteins, no Newtons. I can't think of a single scientific or mathematical formula named for a woman.

Can you name a major scientist, engineer or mathematician who is female?

As for female business leaders, Meg Whitman is probably the top of the heap. But she's alone. The fact that someone has worked his/her way up the ladder is one thing -- and it's a good thing -- but like I said, there's no female Henry Ford or Walter Chrysler, no female Warren Buffett or Bill Gates.

Meanwhile, those women who have made it to the top of some of the country's largest corporations have performed no better than the males who preceded them.

donald said...

have a nice weekend, going to stay out of this one! LOL

Sue J said...

odds-maker, I'm not going to engage in this ridiculous argument with you. Do some research before you come here and make these outlandish statements. Here's a site to get you started:

4,000 Years of Women in Science

Then, please stop saying these false and insulting statements that there are no successful women, or you will find yourself deleted at yet another blog.

Now I'm going to take Donald's advice and have a nice weekend.

odds-maker said...

sue j, your list of 4,000 women in science supported by original statement.

Women have done little to advance science. Madame Curie is probably the head of the pack.

One entry is for a woman who patented the corset in 1841. That's good as far as it goes. But that was a time a increasing mechanical innovation. Steam powered machines were turning up everywhere. But your heroine was busy cinching waistlines.

A corset qualifies as a simple device. A very simple device that combines some obvious characteristics. Its development did not require a knowledge of engineering mechanics or physics.

Another entry noted the first female engineering graduate in the US, an event that occurred in California in 1876. Ms Bragg. But her date of death was not listed. For someone who actually accomplished a female first like this, I would expect much more. Like a mention of some devices she engineered in her career. However, there was nothing reported.

Are you willfully missing the point?

I don't have an explanation for the near absence of women in the pantheon of scientists and engineers. But I do know there are none in the upper ranks.

Meanwhile, as your linked article noted, 50% of medical students are female. But doctors rarely advance medicine. They practice, and medical researchers take it from there.

The sisterhood would benefit far more from facing facts instead of attempting to massage history with sometimes silly facts.

For whatever little it's worth, one of my female forebears was a prominent doctor who died while treating patients in the huge flu pandemic that hit the US in 1917.

I dind't check, but she's probably on your list.

Sue J said...

odds-maker, it's called 4,000 years of women in science. Out of 4,000 years you pick the invention of the corset to highlight? I don't know, and honestly don't care, why you seem to have a personal need to dimish women's sucesses in the world. But I find it insulting and pointless. If you continue to leave comments along this line, they won't be published. I suggest again, go start your own blog for this nonsense.