2+2=Duh?

It’s been said that there are three kinds of people in the world; those that know how to count. And those that don’t.

This old joke elegantly applies to our current financial crisis; both in real estate and banking in general.

All through the nineties and into the new millennium banks and other lending organizations we’re handing out loans like they were Halloween candy. Every half-wit who could sign his own name was getting a credit card. If you could walk upright and speak in semi-intelligeable grunts and groans, you too could get a home loan.

On May 9th of 2008 the award winning NPR program This American Life, hosted by Ira Glass, did a full, one-hour expose on why the housing crisis was happening and the financial house of cards that is starting to tumble. It was called The Giant Pool of Money. You can find it at: http://www.thislife.org/Radio_Episode.aspx?episode=355

In it, reporter Alex Blumberg describes what are called No Interest/No Asset Loans, which basically means you don’t need a job or proven income to get a home loan. Here’s a selection from the transcript:

Alex Blumberg: A guy on the phone told me that a NINA loan stands for No Income No Asset, as in, someone will lend you a bunch of money without first checking if you have any income or any assets. For example, a guy I met named Clarence Nathan. He worked 3 part-time, not very steady jobs, and made a total of 45 thousand dollars a year, roughly. He got into trouble and needed money, so he took out a loan against his house. A big one.

Clarence Nathan: Call it 540 for round figures.

Alex Blumberg: And you basically borrowed that from the bank ($540,000) and they didn’t check your income?

Clarence Nathan: Right. It’s a no income verification loan. They don’t do that. It’s almost like you pass a guy on the street and say, “Lend me 540 thousand dollars?” He says, “What do you do?” “Hey, I got a job.” “Okay.” It seems casual even though there are a lot of papers that get filled out and stuff flies all over with faxes and emails. Essentially that’s…that’s the process.

Alex Blumberg: Would you have loaned you the money?

Clarence Nathan: I wouldn’t have loaned me the money. And nobody I know would have loaned me the money. I know guys who are criminals who wouldn’t loan me that and they break your knee-caps. I don’t know why the bank did it. I’m serious…540 thousand dollars to a person with bad credit.

I remember hearing this original broadcast. I was so flabbergasted I nearly pissed myself in the middle of I-94. And the show goes on and on like that. People with no business even borrowing ten dollars from their in-laws are getting housing loans in upwards of $250,000 to $400,000. And why? Well let’s go back to the eighties, to a bobble-headed, grade B actor turned president named Ronald Regan.

See, Rah-Rah Ronnie was all about getting government off the backs of the little guys. His motto was; deregulation, deregulation and more deregulation. He wanted to free the free market and let American hard work and ingenuity grow the economy like Barry Bonds at the horse doctors. And it did. And the deregulation trend continued with George Bush Sr., Bill Clinton and up through George Dub-Ya.

But the problem with deregulation is the reason many of our institutions, like banking and housing, were regulated in the first place. To keep conniving, weasely, assholes from taking advantage of the system for their own personal gain. Because, as they say, behind every great fortune lies a crime.

In the late nineties, soulless balls-of-shit investment bankers found loopholes that allowed them to sell loans to larger financial institutions overseas and take a percentage off the top as commission. They didn’t care what you made per year. They didn’t care if you defaulted or went bankrupt. They just wanted you to sign on the dotted line so they can sell off the loan and get their taste. And they gorged themselves like Karl Rove in a Twinkie factory.

Nice. Even though I’m a devout agnostic, I sometimes pray there’s a hell with a special, infinitely horrific slot for people like that. Something with razor-sharp chains, molten hot dildos and endless loops of Tom Cruise movies.

But the banking weasels are not the only ones to blame. Can any of us do simple math anymore? Did it strike any of these “poor home loan victims” that it’s virtually impossible to make a house payment on a $7.00 an hour Wal-Mart stocking job?

Here’s a simple quiz; If you make $1200 a month, how many $2300 a month mortgage payments can you make?…I’ll give you a minute…NONE!!!

What…did you think the Magic Money Monkeys were gonna fly out your poop-shoot at the last minute, pulling gold doubloons from their cheeks?

And now the news is full of stories on how we’re all supposed to bail out these poor, misguided saps who are defaulting on their loans. My opinion? If you’re so God-awful, incomprehensively stupid that you can’t figure out you couldn’t afford the loan in the first place, you are on your own.

But for those really hurting, I’ve got some budget cutting tips:

1. Cancel your kid’s cell phones. Do you really need to be paying hundreds of dollars a month so they can text message each other about the Jonas Brothers and navel piercings? In case of emergencies, give them each a quarter and bring back payphones. They’ll be fine.

2. Cancel your cable TV. Do you really need ESPN kickboxing, endless home decorating and cooking shows and fifteen stations all showing reruns of Everybody Loves Raymond? Broadcast TV has all the info you need. It’s free. And it’s healthy. Put down your remote, get off your ass and take a walk.

3. Cancel your internet service. Come on, besides the ten minutes of emailing, all you do is surf porn anyway. Walk to the library, they have high speed connections. You can also dream up creative ways of jerking off in public. It’s free and, hey, maybe you could crack open a book or two while you’re there. Possibly one called Personal Finances For Dummies.

4. And, finally, (before you go ahead with step 3) open an ebay account and sell your 42 inch plasma TV, your surround sound system and all the Playstation, Nintendo Wii and X-Box crap you’ve got lying around. That’s at least one monthly mortgage payment right there. And you might have time to say more than two sentences a week to your kids.

I think this financial crisis might be a gift in disguise. We might all figure out how to do a lot more with a lot less.

Or I might just be talking out my assets.

I’m Anthony Wood. I’m angry. And I just had a warm M&M cookie.