Cause Everybody Know, Stawberry, Strawberry Is The Neighborhood Ho.

It’s a big f’n mess. And I don’t feel bad for Bear Stears, they were shitty neighbors in the financial district who lived by a strict regimen of greed. Take this:

“Back in 1998, when Long Term Capital Management was about to go under, all the major banks were brought together by the head of the New York Fed. The only one who refused to take further risk and participate in the $3 billion bailout was Bear Stearns — and they were Long Term’s prime broker! They generated all the fees and captured all the money they could from LTCP, but when push came to shove they told the rest of Wall Street, “Screw you.””

When this debacle first came to light, I didn’t understand how far reaching it was. I knew that many had paid more for their homes than they were currently worth, but I figured the market would eventually correct and it wouldn’t matter unless they were desperate to sell.

Then I learned about ARM’s. Your payment just went up. Even that didn’t seem so horrible to me, because I didn’t think people would take out a mortgage which stretched them to their last dollar. Holy shit was I wrong. You people are stupid.

And what about the many who have owned their home since before the boom? Well you’re still way up in value, even after the correction, so you should be doing great. Wrong again. It seems that many pulled the equity out of their homes to buy frivolous shit:

“I really wish more folks understood the concept of MEW, or Mortgage Equity Withdrawal. A few years ago, lots of people looked at the value of their home and said, “Gee, I bought this for $90,000 in 1995 — and now it’s worth $300,000!” And so they took out $175,000 in a home equity loan and bought cars and vacations and plasma screens. They financed their lifestyle with what has always been a savings vehicle. It’s one thing if they used the money for “improvements” — fix the driveway or remodel the kitchen. That adds value. But they didn’t — they ate their seed corn. You’re supposed to raise your standard of living by working harder, being clever, earning more income — not by using your long-term savings. And now this current generation is pretty much fucked. When push comes to shove and they go to take money out of their houses at retirement time, they’re going to find out that there ain’t a whole lot there.”

Are you kidding me? This never crossed my mind (before 2007). It didn’t seem possible because it is so fucking far out of the scope of common sense. This country is just screwed if that’s the way you think. Pulling equity to buy depreciating consumer goods?!?!? How stupid do you have to be?

{Read: “Don’t Fear the Bear” from Esquire}

{Read: Strawberry picker makes $15,000 a year and qualifies for $720,000 house}

{found in (the always excellent) the New Shelton Wet/Dry}


4 responses to “Cause Everybody Know, Stawberry, Strawberry Is The Neighborhood Ho.

  1. time to buy bear stock!

  2. Shares of the stock are selling for $12 on monday, one year ago they were worth $152, buy now.

  3. At $5 I was thinking of buying a thousand shares, which would be a lot of my liquid assets. If I had done so, then sold today, I’d be up $7,000.

    Unfortunately, I didn’t do that.

  4. Dont buy now, i think it might be too risky now. Its hard to say what the future holds. It looks like the 10.00 value might stick around.

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