Monday, July 28, 2008

Blaming the Passengers

I’m starting to get more than just a little annoyed at the holier-than-thou crowd and Monday morning quarterbacks in the "news" media who are buying the industry-driven mantra that the problems in the debt markets and the economic fallout are because of mortgage lending to people who shouldn’t have gotten loans.

Trust me – it’s their PR machine at work, diligently trying to shape public opinion and point the finger at the consumers as opposed to the perpetrators. The stakes are high - as in trillions, so you can’t expect the folks who actually run Washington to shy away from getting the media to help them in pointing fingers at easy targets.

And it’s starting to work. Alleged “news” pieces are starting to appear in places other than chatrooms, forums and blogs, citing complaints from people about a bailout – as if the bailout was for the real victims. And lo and behold, “experts” are being drawn on to get the word out in the mainstream news.

But the reality is, any bailout is for the industry and the investors – NOT the borrowers. Most individual borrowers have one home to lose. The industry is facing trillions of dollars of rapidly vaporizing wealth they created for themselves and are reluctant to see stop coming their way.

Tossing ordinary people who have been taken advantage of under the bus is sickening. The industry’s well-crafted defense is taking hold in the media – people are supposedly to blame for taking out loans they didn’t qualify for and then not being able to pay for them.

But those who are hopping on the blame-game bandwagon won’t admit that the majority of people who were taken advantage of were led into adjustable rate mortgages for one reason and one reason only: There was yet another loan in the making; either the borrower would have to refi before the ratchet up or it would explode and be foreclosed on and yet another loan would be created for that property. To keep that machine churning required monumental fraud.

Spare me the “they’re just irresponsible” paintbrush. Yes, some borrowers are. But given who the squaliformes targeted and lured into the sausage machine it is nothing more than financial bigotry to simply say “they shouldn’t have signed that.” Guess what, in a lot of cases they didn’t even sign anything that was legally viable. But that didn’t stop servicers from turning the crank on the manufactured default/rapid foreclosure process, without which the machine would have clogged up and ground to a halt.

And worse, the majority of Americans who didn’t need to worry about fighting the credit scoring debacle sat back and enjoyed artificially low interest rates while the sub-prime victims (many of which should never have been there) drove profits into the stratosphere for the squaliformes and made millionaires among the legalized gamblers on Wall Street.

So give the whining about allegedly irresponsible subprime borrowers a rest - you’re blaming the passengers on the train for the sleeping engineer and the resulting crash.

The Honorable Judge Roy Bean

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