Random Noodles

Some loosely conjoined observations on a tulip-killing April morning.

Is it just me, or does the current moment feel like a lull before (maybe) many shoes begin to drop?

We still don’t know who the Democratic presidential candidate is going to be, and we may not know for some time. There don’t seem to be any new explosions in the financial sector—just the soft sound of brooms and dustpans working away at those massive dust bunnies (CDOs, etc.) before they start reproducing. And though the indicators are far from rosy, we’re not sure we’re in a recession yet.

So what’s next? There’s absolutely no way to predict. Anything can happen.

• You might have seen the recent series in the Strib about the new “ghost towns” in Wright County north of the Twin Cities. These were developments put up in the building frenzy just before the bubble burst, leaving only a few people dwelling there, stuck with a big house (or more than one, in some cases), maybe an adjustable subprime mortgage, and with no prospect of making money out of the deal - or even being able to unload the place.

Call me hardhearted, but in these articles and others I’ve read recently on the housing price slump, I find it difficult to feel bad for many of these folks. In most cases, they simply wanted bigger houses than they really could afford, then used their inflated house values as a big piggy bank.

My wife, a professional observer of the real estate scene, says that during the housing bubble, there was greed on both sides. The lenders: "You can afford much more house!" The buyers: "Yeah, we deserve that big new house, and besides, house prices will rise forever!" As the Strib series notes, some people bought houses as investments or as part of get-rich-quick schemes.

Maybe the reporters are having a hard time finding real victims. There have been homebuyers who were cheated by shady mortgage lenders — those people certainly deserve government help. But should others who've been thrifty and lived within their means help out those who jumped on the latest version of the pyramid scheme?

Comments

[Whatsername]

I take responsibility for my decisions, including whether or not I choose to read the fine print, do the math, or purchase the extended warranty. I certainly don't excuse the deceptiveness likely employed by some mortgage lenders, and hope those who were truly deceived find justice. Overall, though? PT Barnum's Law has been proven this decade, beyond the mortgage crunch. The premium brands, alone, diluted themselves to the masses (Tiffany, Coach, and other luxury labels). Thus, we have a glut of Chevy Cavaliers with Caddy logos on the road - BMW 3 series, Audi A4s, and the monstrous luxury SUVs - driven by twenty- and thirty-somethings who live in big houses with no furniture, eat out every night, and have nothing in the bank for themselves or their families. People went nuts on a lifestyle that actually still was, and is, beyond their reach. My gut tells me most are paying for it now. I pity the kids and the throw-away accessory pets that have to live through it.