Posts Tagged ‘underwater mortgages’

So I’m having my cup of Joe this morning while I’m watching Morning Eeejit on TV, hoping to get at least a little real news, but finding only not-even-half-baked opinions about how Obama has ruined the economy and such.  So I decide to see if there is any real news being reported on the Vapid News Network (VNN) but the ladies are just chit chatting about this and that when one of the other ladies comes on to talk about the economy.  I’m thinking, “Oh boy, here we go again with some more absolutely mindless advice about investing in stocks or bonds that no self-respecting Wall Street shark would even consider for a heartbeat.”

Suddenly a piece of real economic news (sort of anyway) accidentally slips into the morning news discussion. It seems that Deutsche Bank has made a projection that nearly half (actually 48%) of U.S. home mortgages will be underwater by the time the current recession ends. That’s a lot- as the VNN announcer hastened to add.  However, that wasn’t enough.  The VNN person then felt compelled to opine on the prediction and then predict the dire results of the prediction – sort of predicting the prediction’s possible extrapolated ancillary effects in the years to come.  This is what passes for news in the United States of America these days.

Our Lady of the News went on to inform me that having half of the mortgages underwater would mean that half the people with mortgages would probably not have the ability to get a home equity loan and therefore they wouldn’t be able to send their children to college and besides that certain other very bad things will happen because housing prices have collapsed in the Great Recession.  She neglected to note that it was the ballooning of housing prices in the Great Bubble that was the proximate cause of the Great Recession and that the underwateriness of today’s mortgages is nothing more than an overdue correction that was the result of our collective irrational exuberance.   It seems that she has forgotten that only yesterday (it seems) our economy was in a screaming nosedive because of liar loans and lying bankers and lying insurance companies and lying rating agencies and lying government regulators.  And now it sounds like she is wishing for the good old days of artificially inflated housing prices so we can all borrow money and live the good life.  And VNN calls this news.

The simple fact is that underwater mortgages are a necessary and painful part of the correction process.  After all somebody has to pay the bill and it might as well be you.  What?  You didn’t really expect the banks to pay, did you?  No, you have to pay. Either through your mortgage or your taxes or pay cuts or layoffs or higher bus fares or something.  The point is: you have to pay.  I hope that’s not news.

Here’s another thing that’s not news: television news. At least the non-stop, daily sort of stuff that used to be news.  The half hour deals on the major networks are still pretty good.  So is the BBC – if you can get it.  So is PBS – if you watch it.  But, if you want up to the minute, late-breaking headlines, it seems to me that the best place to find that these days is the internet.  All the news services and newspapers race to get their headlines on the net first, while the talking heads on television pseudo-news opine and chit chat their way through the day spreading drivel at best and deliberate propaganda at the worst.

As for the half of us who will have underwater mortgages by the time the recession is over – look on the bright side.  First, be happy you even have a mortgage or a house.

Second, remember that inflation is always with us – it’s a necessary component of a growing capitalist economy – so you’ll soon be paying your mortgage with dollars that are continually decreasing in value. So you actually beat the banks! You’ll be paying with worthless money!  (Actually, not really – but it won’t be as bad as it looks right now).

Third, you’ll have a real house to live in and not a bubble.

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