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Tuesday, October 11, 2011

Why am I not surprised?


Higher credit risk buyers who used the government's cash-for-clunkers program last year to buy a new car had higher repossession and late payment rates than those who didn't use the program, a research firm finds.

Gee, ya think?

I always wondered why people who were driving clunkers could suddenly afford a new car if someone (read: Taxpayers) made the down payment.

Just as I always wondered why mortgage companies thought they could loan people money who couldn't qualify for a standard loan and make money by charging them higher interest rates which meant higher payments when they couldn't afford the lower payments??

I figured it out years and years ago. Some people will struggle and make the payments because of improved personal economic conditions. Other people won't. But the mortgage companies found a bigger fool and the government backed them. That would be Fannie and Freddie and the various folks of Wall Street.

The smart people made money as the bubble expanded.

The really smart people made money when the bubble burst.

The Big Short

"Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them." - Karl Popper

“Necessity is the plea for every infringement of human freedom. It is the argument of tyrants. It is the creed of slaves.” - William Pitt

"Logic. There is little logic among the cultural elite, maybe because there is little omnipresent fear of job losses or the absence of money, and so arises a rather comfortable margin to indulge in nonsense." - Victor Davis Hanson