NY Times sob journalism

But that's a recipe for disaster, Rick!!!!

 

Seriously now. You kept it fine for yourself. But folks who scrimp and save and don't buy stuff don't help the economy any.

Someone who buys a new car every two years and eats dinner out three times a week and buys a new boat helps the economy.

And if that person pays his notes, why scoff?

 

Yes, but it'll be a disaster on a smaller scale than 100% will inevitably be. And I'm assuming that, being a little older, they are pretty set in their ways and I wouldn't be able to suggest anything radical like moving.

 

Yeah, IJAG. Suggest they move further from work and hitchhike.

 

They moved 14 months ago because the place they had been renting-to-own for 10 years decided to sell the house. So they had to start over again, and move further out of town because real estate had risen.

 

If that person can afford to do all that stuff in good times and still save up enough money to keep things going in the inevitable bad times, more power to them.

We didn't have that in America. We had a lot of people (myself included) trying to live to a standard that could only work if absolutely everything went 100% perfectly for the next 50 years.

At those who said saving doesn't help the economy: The more money people save, the more banks have to lend, which drives down the price of debt, which makes things easier on entrepreneurs*, the true engines of the economy.

* - it took me four tries to get spellcheck to stop red-lining that word. sheesh.

 

I realize you are being sarcastic, but you are right on the money.

If I lose my job tomorrow, god forbid, I will not be in debt, I will be able to pay all of my bills and I won't ruin my credit or burden anyone.

I've been lucky enough to save, but also smart enough not to spend like Michael Scott and live above my means.

 

For younger people, I'd suggest something more radical like moving to an entirely different area where the cost of living is lower.

For older people, I still bet I could trim a fair amount of fat from their household budget. But I'd really like to get this away from something as personal as your parents and back to more polite generalities.

People in America refuse to manage their money properly because they've never been taught how. Trying to live on 100% of your income will fail 100% of the time. If your situation is such that you can't possibly live on less, you must change your situation or accept the failure.

 

My post, if you read it, was more about the lady in the story - and people of her type. Not those who have done all they can to make ends meet and can't for reasons beyond their control.

She had, presumably, a well paying job at a university and is now crying poor and asking for handouts in a story run with a photo of her in front of several knicknacks she could have lived without.

But you keep getting angry at me IJAG. I'm used to it.

 

Let me point out that I don't feel that "stupid" is the right term.

If you grow up around people who don't save properly, if you are never given proper financial education, if none of your friends save properly, then how are you going to learn to save properly?

Trust me, I doubt there are many on this board or elsewhere who could claim a more checkered financial past than me. I learned these lessons the really, really hard way.

The problem is cultural, not personal. And I don't mind helping people, but I also want to help prevent more from following their path. I want both prevention and a cure.

 

When I left the j-industry some months back, the job I landed was in auditing. Forensic accounting audits of defaulted mortgage loans, to be precise. The job has opened my eyes to a lot of things about what went on in the financing industry over the past 10 years. Yes, I knew it was filled with crooks. I did not understand that these "crooks" usually perpetrated their "wizardly fraud" but writing in additional '1s' on their bank statements (that's another $10,000 in assets they suddenly magically have!) or stating they made $14,000 per month as a manicurist.

I can't comment on this specific case, but I can comment on at least 80% of the cases I audit (I deal primarily in "stated income" loans, so I get the dregs of the liars). In almost every case, the broker/bank knew these people could not afford these loans and assisted in perpetrating fraud on them, sometimes without the knowledge of the borrower. (Example: You go into a bank to try and get a loan on your $20,000 per year reporter salary. You, of course, cannot afford anything roomier than a cardboard box. You provide correct pay stubs and try to do things legit. Your originator sees that he's not going to get paid his commission on your sorry ass, so he suggests you go stated income. Or sometimes he just writes in whatever the hell he wants on your application without telling you.)

Yes, people should read the documents they sign. Certainly not saying these folks weren't stupid or parties to it. And those who got legit loans they knew they couldn't afford should not have done so. But there was a market of predatory lending in play for the last decade, encouraged by the government and lovingly indulged in by local banks, that encouraged and pressured consumers to do this shit with credit card and mortgage loans. And what's happening to the real estate professional who perpetrated the rape of our economy? Not a whole hell of a lot, I can tell you. At worst, they're crying about no longer making $10,000 a month. I work on behalf of mortgage insurance companies who're trying to save a little money (they don't have to pay out claims on frauded loans). But nobody's putting these broker assholes in jail on any grand-scale level.

As for the borrowers? Yes, most of them should've known better. But they're being punished. They're losing their houses, their credit ratings are shot, they're stuck with inflated loans that were processed specifically to make brokers a buck. And nobody's bailing them out, and that sucks. So, I have some sympathy for them.

I'd love to see the FBI put a concerted effort behind putting liar loan brokers in jail, but that'll never happen.

This is absolutely true, but the culture was promoted and pumped for a specific reason (the push for the "ownership society" that led to these loans is largely responsible for easing the immediate impact of a recession post-9/11). It goes a lot deeper than stupid people buying houses they couldn't afford is my point.

 

I also learned the hard way Rick. I was in debt, screening calls from collectors, the whole bit.

But then I sat down, wrote out every expenditure, calculated total income and cut costs and got out of it.

Recently, I saved two months worth of receipts just to see where my money was going. And I'm still pissing too much away on snacks or sodas at the gas station, etc.