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View Diary: They Are the 1% - A Really Scary Follow Up (95 comments)

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  •  One of my pet peeves . . . (26+ / 0-)

    . . . as I've watched the housing market tank is the kind of "morality play" that apologists for the banks put on whenever there is talk of people simply walking away from their mortgages.  'Coupla things:

    (i)  The banks are supposed to be really, really good at their jobs; that is why they are supposedly entitled to the big bucks.  If the banks gave away a lot of money to people who couldn't pay it back, then that fault is on the banks for being bad at their jobs, and not on anybody else.

    (ii)  The banks never, ever, get anything less than what they bargained for.  When a corporation walks away from a bad real estate investment it does so because that is the smart business move for the corporation.  It pays whatever it has to, which it calculates to be less than it would have paid had it stuck to the contract, and the non-breaching party is made whole.  And nobody ever thinks to suggest the corporation has done anything immoral -- it's business.

    But, somehow, that is supposed to go right out the window when people are involved.  I'm sorry (and pardon the language) but that is Bullshit!  When a person walks away from a home loan, the bank gets exactly what the bank bargained for:  the home itself (which was the collateral used to secure the loan) and a personal claim against the borrower in the event the security is insufficient to pay back what remains on the loan.

    The Bank gets exactly what it is entitled to get under the contract it signed.  The bank hasn't been cheated -- the bank's contract has been performed in full.

    Now . . . if it turns out that the contract the bank signed wasn't a good deal under these circumstances because the bank ends up getting less than it thought it would when the contract was signed -- then the bank is a (again, pardon the language) just shitty at doing business.  It hasn't been cheated, it just should have been smart enough to strike a better bargain.

    But there's no morality involved here.  None whatsoever.  It's still just business.  And the idea that banks that aren't very good at their jobs would try to make anybody feel guilty for the banks' own failings . . . well, that kind of grift is probably the real reason they can be so profitable.

    Not because they are so good at business, but because they are so good at scamming others by exploiting the sense of honor and virtue that most individuals have, but that no artificial entity like a "bank" or a "corporation" can afford to indulge.

    Screw 'em.

    Politics is the neverending story we tell ourselves about who we are as a people.

    by swellsman on Sun Oct 09, 2011 at 09:22:10 PM PDT

    [ Parent ]

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