Where is the Bottom?
I don't often watch "60 Minutes" these days.
But what's a fellow to do when Dallas is beating the Giants and they keep cutting to beer commercials?
What I learned through sheer Sunday sloth (Don't you just LOVE it!) was frightening.
Ever hear of NINJA loans?
No Income, No Job or Assets.
Yet these are exactly the buyers who big banks and other responsible lenders "qualified" for 100% mortgages on stacks and rows and entire neighbourhoods of new condos and homes in the USA.
One fellow has a job. He empties 20 apartments a day of its furnishings so that real estate agents can try to sell on these foreclosed units. Twenty a day, and his business, one of hundreds, is booming.
What happens to the furniture?
It is stacked on the front walk and the vultures, formerly known as friends and neighbours simply walk over and cart off TVs and couches and coffee tables.
I learned that many of these houses and condos were sold in a kind of circus atmosphere with fake paparazzi snapping fake pictures and party girls and boys and balloons and booze and flashy cars at the curb adorning the event.
Stupid, often young, greedy and anxious people snapped up the opportunity to live by the sea in South Florida or up the road in the desert from the glamour of Las Vegas.
And they were encouraged to do all this by real estate operators right out of Glengarry Glen Ross, mortgage brokers and bankers and hedge funders right our of Rikers.
The failure and repossession rate of these "units" has surpassed a million and we are told that the next big tsunami will be even higher when it hits about a year from now.
This is not just about real estate or losing a few dollars or an investment. It is about the most venal criminality, about a cancer eating away at the fabric of neighbourhoods, about people's hopes and dreams and avarice and stupidity.
But mostly it is about a model of enterprise that is more than deeply flawed. With little or no regulation or oversight, money lenders have been able to create a house of cards that is collapsing a huge chunk of American life.
Now, of course, with great hindsight, Washington, led by the very people who were at the steering wheel of the runaway bus in the first place, is coming to the rescue of banks and lenders and others with taxpayers money.
The circumstances in Canada may not be quite as ugly or as bad, but do not forget that the US is our first and primary trading partner and you can be guaranteed that we will feel the heavy splash of the American tidal wave over the coming months or years.
