A truly scary story

[germdoc]

I got panic attacks just reading about this guy's problems:

http://www.nytimes.com/2009/05/17/ma...pagewanted=all

Obviously the guy got himself in hot water through irrational exuberance. Ironically, he was a NYT economics writer, so if anybody should have known better, it was him.

Here are a couple of random observations:

--Divorce pretty much decimates your income. If you start out as slightly upper middle class, you don't end up there--you end up in the lower half.

--There are people out there who will sell you anything (e.g., mortgages) regardless of whether it's in your best interests or not.

--The most dangerous kind of financial thinking is the kind that says you SHOULD be able to afford something or live a certain way, in spite of reality.

[crokett]

He took out a mortgage he knew he did not qualify for and rand up gobs of credit card dept. Now money is coming out of my pocket (and my children's pockets) to put things right. I won't lose sleep over his problems, especially since he knew better. The only folks that MIGHT get my condolences are those who were outright decieved by predatory lending.

[BobSch]

I am of two minds about stories like this. The buyer/borrower (especially the guy in this story) should have known better and the guy who conned him into the deal should have been charged with fraud, and probably would have been in years past.

I'm sooo glad our house was paid off years ago.

[crokett]

I am not condoning what the lender did but he did not 'con' the writer. The writer knew he didn't really qualify for the loan and yet he accepted it anyway.

[LCHIEN]

the writer and the lender both should have known better, the lender was just after commissions and refinancing expense, every time he modified the guys loan he made money even though he knew (or pretended not to know) that the borrower was getting worse off each time. the banks and the borrower boith should have known better, they were all betting on the come, so to speak, an ever-increasing real-estate value, this to me is no more than a dang ponzi scheme.

Now I'm paying for all of it though increased government spending and depreciation of my stock values, and none of it is my fault. For whom am I supposed to feel sorry? I think I'm the real victim. everyone else in this story had it coming to them.

[Russianwolf]

The only ones I feel sorry for in all this are the people who are loosing their home due to them loosing their jobs. They didn't cause the problems that are effecting them, but the domino effect is sweeping them up with all the rest.

[Hellrazor]

Everyone involved is at fault. You know you can't afford the payments & they know you can't afford the payments.

[pierhogunn]

what is it about the perception of a saftey net that puts humans in the mood to partake in risky behavior?

be it financial, moral, or sexual, saftey nets are not to be used unless something unforseen happens...

Are we as a society now so immature that we, en mass, believe that there are no consequences for our actions? I wonder how painful our wake up, and it's aftermath is going to be...

[Uncle Cracker]

While taking responsibility for his current financial predicament, this guy still makes it sound like his life went to he11 in a handbasket overnight and behind his back. He's a financial professional, and still got tied up in the "I can handle the payments" game that forgets that unexpected expenses happen, unexpected lapses of income happen, and not all money is smart money. He didn't stop to think that people selling him things weren't doing so to help him, but because that's how they get paid... While I have sympathy for him, he has been able to talk himself into getting pretty much anything he wanted, even if there were consequences. Now the piper must be paid...

[pierhogunn]

not exactly on topic

Now the piper must be paid...

you know, as a veteran of several highland games, I can say from first hand experience, that you pay a piper to make them go away... and the reason that when you march around the field with your pipers in front of you is so that you can enjoy the thought that the pipers are actually leaving...

[jackellis]

It's all about incentives and behavior. For better or for worse, government efforts to create safety nets and to "protect" consumers often have perverse side effects. I'm not opposed to consumer protection nor am I opposed to safety nets like social security, unemployment insurance and medicare, but there's a fine line between helping people who really need help and providing get-out-of-jail-free cards for people who behave irresponsibly.

[Ed62]

I'm 100% in agreement with the post above. Well said.

Ed

[pierhogunn]

It is unfortunate that we have traded in leaders that we elect who use judgement to balance compassion against the law of unintended consequences for those leaders who rule solely on the basis of compassion with no regards for justice, or the dangers of those unintended consequences...

The need for compassion is why we must choose those that lead us carefully, and why we will never be successfuly ruled by machines

[germdoc]

Well, this has digressed a bit from where I intended. My point was not that this guy was at fault--he admits it in the first sentence. Or that he does or doesn't deserve a bailout. Or government financial policy. It's about the lure of irrational thinking when it comes to money, especially ironic since this guy's a financial writer.

I applaud everybody here who has paid off their house, has no debts, etc. However, I suspect many if not most of us have had some financial struggles from time to time, gotten in over our heads on houses or other purchases, made some bad investments because we didn't stop and think rationally.

If you have never made any financial mistakes, you probably have never gotten a speeding ticket or made any misrepresentations on your income taxes or torn off those labels on the furniture that say "under penalty of law"...

[bruce hylton]

I think I have made every mistake it was possible for me to make when it comes to finances. I have yet to file for bankruptcy and until the day I die I will still be paying my bills to the best of my ability.