HA HA.
Building on atrios’ observation that more and more people are walking away from their mortgages they can’t afford, I had a nice chuckle at this:
“We’re seeing people who are current on their credit cards but are defaulting on their mortgages,” Mr. Lewis says. “I’m astonished that people would walk away from their homes.”
Mr. Lewis is “astonished”. If he was reading either atrios or Bloomberg a few weeks ago, he’d be yawning:
Washington Mutual Inc. got what it wanted in 2005: A revised bankruptcy code that no longer lets people walk away from credit card bills.
The largest U.S. savings and loan didn’t count on a housing recession. The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code, said Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank.
“Be careful what you wish for,” Westbrook said. “They wanted to make sure that people kept paying their credit cards, and what they’re getting is more foreclosures.”
Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.
The banks are still paying for that decision. The surge in foreclosures has cut the value of securities backed by mortgages and led to more than $40 billion of writedowns for U.S. financial institutions. It also reached to the top echelons of the financial services industry.
I hate to go all Nelson Muntz on these poor banks and their financial problems, because lord knows if the shoe was on the other foot and ordinary Americans were suffering the banks would help US…
Oh wait a minute. That’s the LSD talking. The banks went out of their way to screw ordinary Americans, making sure that it was harder for individuals (but not corporations) to declare bankruptcy, with no exceptions for medical emergencies or anything like that.
And now, because housing debts are SO MUCH BIGGER than the debts most credit card holders ring up, the banks are taking a major hit. $11 billion and counting at Citibank. Merill Lynch looking at another $7 billion down the crapper, on top of the $8 billion they already lost.
Couldn’t have happened to a more deserving bunch of assholes. And now I’m going to place a call to Joe Biden’s office: he thought bankruptcy reform was a SWELL idea in 2005 because his financial backers are credit card companies.
Not so smart now, are ya Joe?
One Response to “HA HA.”
Leave a Reply
You must be logged in to post a comment.
December 21st, 2007 at 4:36 pm
when you could buy cheaper than rent, they bought (with little down); now renting is cheaper than owning, so they walk away.
It’s the new rentership society!