Posted by: Christine Johnson | September 29, 2008


I posted a link to a couple of posts at the Darwins’ place on the financial crisis, but saw this at National Review Online today and wanted to share:

Thursday, September 25, 2008


Picturing the Subprime Mortgage Meltdown and Rescue as a Bedtime Story

Perhaps we can understand the current credit crisis if we simplify the terms and picture it on a much smaller scale…

I’m Johnnie Bank.

A couple of years ago, I went on a drunken bender and authorized five mortgages of $500,000 each to Joey Irresponsible and his four brothers. I loaned out $2.5 million in mortgages which the Irresponsible Brothers used to buy five townhouses.

Joey Irresponsible and his brothers, it turned out, put no money down. I didn’t verify their income, I didn’t verify their assets, and they quickly found themselves with mortgages they couldn’t pay. Refinancing wasn’t an option as they simply didn’t have enough monthly income to pay any type of mortgage for a house that cost that much. Four of them have gone into foreclosure and the last one is behind in his payments and looks very iffy. …

Be sure to read the rest, too.  I’m starting to really think this is not just necessary, but a good idea.  Just remember to stop saying that the “taxpayers” will make money.  We. Will. Never. See. A. Dime.  But maybe the government would start acting more responsibly and stop spending like drunken sailors.  You know, maybe they should listen to Dave.

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