Tuesday, November 16, 2010

Simple Arithmetic

 Back in the day, figuring out how much one owned and to whom was easy to figure out.
 But the the mandate became "Growth".
With most people who could afford a home living in a home - what was the next step?
Balloon payments seemed like a good idea for those seeking the American Dream.
But what happens when the note come due?
To avoid huge losses for their super rich investors - Wall Street tapped students inclined towards math and science to come up with a new formula.
After 'derivatives' became the easiest way to make money (on paper) - the super rich were granted a reprieve.
But then everyone realized that everyone had paid too much for what they'd owned.
Panic ensued and the super rich enticed Washington to come to their rescue.

Tell the truth - you knew how much your house was really worth.
You were just looking for a sucker bigger than yourself to sell it to.

1 comment:

DF said...

Of course! That's what really happened is the amateurs got in thought they could flip to another Sucker but got caught with the house. Now they want a bailout like they are kids saying the Parents shouldn't have let the cheating kids in. Knowing full well the kids were keeping the stolen candy a secret.

It's human nature but it's funny to see when it plays out. The Great Recession just shows you a true Sucker to Hustler ratio.