12.13.2007

It's Yellow

The world is going down the economic khazi as we speak. ARM loans are going into default, foreign countries are bailing on the dollar, central banks are having to bail out sub-prime lenders, and millions of people are maxing out credit cards to keep up with the Joneses.

Question: What do we have to do to get things back to the way they were? Return to the Gold Standard? Would it be so hard to let people default on their loans instead of the .gov bailing them out with fixed rates? Hello, McFly? You bought into an ADJUSTABLE RATE MORTGAGE when the rate was at a 40 year low. What made you think it was going to go lower?

I've been in banking long enough to see how far some people go to live beyond their means. Shit, Brittany Spears is the prime example of it. This woman earns more in a month than most people will see in a lifetime of hard work. From the reports, she pisses it all away on shopping, food, clubbing and whatever else makes her happy. Not one dime goes towards a retirement plan. Not one dime goes towards a college tuition fund for her children. Not a single dime used to establish a scholarship fund, or charitable trust, or even an endowment for the arts. Trailer park done gone and moved off to the big city and livin' it up.

A financial broker came to my desk one day years ago wanting one of those Home Equity Lines of Credit. That was the precursor to the ARM. Banks wanted to see if an adjustable rate loan against a home would work. It doesn't work, but the banks didn't tell their customers that. Anyway, he wants one of these newfangled loans and doesn't care how he gets it. I look at the financials and see he's got no chance. The man lives on 1099's and comission draws every quarter. We're talking about a person who advises other people how to invest their money. I weep for his client base. What does he want to do with the loan? Build a bigger house. *blink blink* As if the gargantuan pink stucco monstrosity you are already mortgaged to the hilt on isn't big enough.

For the love of Cthulhu, the six bedroom monster you share with your two toddlers and trophy Barbie Doll aren't enough. Why do you think it is so important to have such a worthless status symbol? You could do so much more with the money you'd save in property taxes alone. In the neighborhood you live in, the taxes are astronomical and going higher. Hell, your neighbor bought two lots next to his so he could build a bigger backyard....ALL ON BORROWED MONEY!

Move to the sticks and buy ten acres with the proceeds from the original house. Bank the extra cash saved from property taxes and pay off your credit card debt. Live free of the worry about car notes and phone bills and bill collectors. Teach your children the value of a dollar and hard work to earn it. Go out to an expensive dinner with the family and feel great about paying cash. If I sound like a Dave Ramsey commercial, it is because what I'm telling you is common-freakin' sense.

It took this dipshit three tries to come up with enough POI (Proof of Income) before our underwriters gave him an 80%LTV HELOC. He had to dig up 1099's from ten years past showing that he was earning what he claimed. Butt-head lied to me at first when he claimed to clear seven figures in commissions the previous year. Debt to income ratio was so high, we had to get his wife to co-sign the note anyway. The in-laws had to fork over money for origination and appraisal fees. One point on a six figure home is a hefty chunk of an origination fee. See where I'm going with this? His isn't an isolated example. This happens the nation over.

We're spiraling down the debt drain. Even I'm guilty of it. Come the end of the month, I have to fork over close to 10K to my 401(k) plan administrator because I got greedy and took loans against my retirement plan. I was caught up in that greedy attitude that catches so many with the "Gotta have it right now" mentality. I would have been fine had I not lost my job this summer. Miserable, but fine. I was so broke then, I couldn't buy a vowel. This will kill our joint savings. There's enough left for taxes this year, but we have to start over from scratch to bring the balance back up. I'm earning more money, so that will help the bottom line, too.

By New Year's I will have paid off that loan. Around the Ides of March, my credit card will be cut up and zeroed out. Same with my Personal Line of Credit. I'll keep that active. You never know when the house may need a new roof, or I need to take an emergency trip to Sweden. It serves as my overdraft protection, too. Not that I need it. My current bank forbids me from bouncing checks. Do it twice and I'm fired.

What pains me the most, as I sit and struggle with the mortgage and my personal debts, is that everyone around me is cheering because the .gov came to the rescue again. That further strengthens my theory that society as a whole has lost touch with individuality and self-reliance. It all started with Nixon killing the gold standard. Jimmy Carter joined the fray by making it illegal to stockpile tangible wealth and assets vital to existence (Peanut thought those self-reliant folk might not come to rely on dear old Uncle Sam). People didn't want to fall back on the government to survive. They read the writing on the wall and realized 'Just-in-Time' accounting methods wouldn't bail a community out in a disastrous event (ever tried to buy food at a grocery store the day before a hurricane? That's Just-in-Time accounting at work for you). Former Wisconsin Governor Tommy Thompson got it right. He's the only man I know who took the bull by the horns and won. He did away with the standard welfare program in Wisconsin. He was tired of freeloaders, and believe me, there were plenty when I lived there. The state of Wisconsin took away the handouts and gave a hand instead. He instituted welfare-to-work programs that forced people back into the working community able to fend for themselves. Sure, there were still people on the dole, but he made it harder to stay there.

That's the kind of .gov we need around here. Not just some jackass who's going to write a blank check to whomever wants it. Someone who is going to give us the supplies needed to build ourselves up. Know why Hurrican RITA victims don't get news coverage? They told FEMA to F.O.A.D. They rebuilt their own communities with limited government intervention. KATRINA Evacuees...still bitchin 'bout the free rent they be gettin'...and not gettin' 'nuff of it, neether.

I truly hope and pray for the day when our economy collapses. Let the trains stop running. Close down the money houses. Let's see how long it takes for the cotton-headed ninny muggins' to get off their fourth points and bring the country back to life. They are weak. That is why they are on the government dole. They will do what so many weak men and women do...try and take what doesn't belong from the strong. Darwin will be laughing when that day comes. Then, he will truly see 'survival of the fittest.'

5 comments:

Ambulance Driver said...

"Know why Hurrican RITA victims don't get news coverage? They told FEMA to F.O.A.D. They rebuilt their own communities with limited government intervention. KATRINA Evacuees...still bitchin 'bout the free rent they be gettin'...and not gettin' 'nuff of it, neether."

You said a mouthful there, Shooter.

the pistolero said...

I truly hope and pray for the day when our economy collapses.
Some of us need a battle rifle and a proper amount of food for it before that happens...

shooter said...

AD: Should I have said ESBAM instead? Too subtle? No? I still wonder how Houston would have truly reacted if Rita were a direct hit.

Pistolero: We all talk big about when the balloon will go up, myself included. 100 rounds of .30-06 a good knife, and a strong head on your shoulders are all anyone is ever going to need at that time. Let's all pray it never comes to that, but pray we are strong enough if it ever does.

Hammer said...

I see people with good jobs and big incomes spend every dime of their paycheck on interest. Then they keep borrowing more and more.

That's just too much stress to live under.

the pistolero said...

We all talk big about when the balloon will go up, myself included.
I know, but now and then I think about immediate post-Katrina New Orleans and wonder to what extent it will have been a mirror for the United States after the economy really tanks. As for me, I have my eye on the Springfield Armory M1A in .308...