I tend to stick to
all things "Journey" on here 'cause there's usually
very little new I can offer. The one big exception was
the politics last year - but even that had more to do
with my own excitment rather than any real
perspective. However this recent Stewart vs. Cramer
debate has been fascinating to me and I really don't
see anyone taking my view. As well, when I originally
wrote about this 3 years ago I had to lock the entry
because I completely bitch-slapped the mortgage
company I worked for and unlocked it a year later when
they went out of business. So several of you have
never seen this video or what I had to say. The point
of allllllllllllll of this is that Stewart is just as
wrong as he is right and this issue is much more
complicated than anyone is expressing (that I've
seen/read/heard). So sit back and get your learn on.
:-)
This
video was done when I had just gotten the
news about America's Got Talent, was
finishing up "Let's Bomb Iran" and was
losing it at work. I didn't belong there,
I was no longer helping people - the
market had shifted and I was at a shitty
company that was clearly taking advantage
of people and I simply, couldn't, do it. I
actually love this video. Years later I
look at it and I'm proud of my heart. That
and the "Mother fucker we LIVE in an
IGLOO" line was very well deliverd. :-)
Anyway, what I wrote in the entry has
recently been described as "hilariously
accurate" and, man - I really did nail it
years before all this shit came down. I
lay it out so matter-of-factly, exactly
what was happening and why the banks were
doomed:
The leads
are gathered by a telemarketing crew and it's
actually the coolest part about the job. You get a
packet on your desk of someone who has already been
contacted and is presumably interested in
refinancing. Like any leads there's good and bad -
but that's a great start. Except for one thing:
Every single lead refinanced in the past 3-4
months. Every one. They're subprime borrowers who
are always in over their head and they get preyed
upon by broker after broker and end up using every
cent of equity they have in their house. The best
call you could make to these people is to tell them
to stop answering the fucking phone and get their
shit together. And truth be told, I've made that
call - several times. Some of the people are
actually A-paper that just financed into a 30 year
fixed and I'm supposed to give 'em a neg-am? LOL.
And people are doin' it! A BUNCH. I just
can't and won't do that.
The kicker
in all this is that they try and brainwash the
sales staff weekly about how to "Sell" which is
literally how to "lie". For example. If a guy pays
$400 a month for his car, $300 a month for his
wife's car, has a minimum payment on 2 credit cards
of $150 and $75 (but pays $400 on both to knock 'em
down), and a 1st mortgage at $2400 - we're told to
add that up to $3500 and get him to agree he pays
$3500 just on loans. Then you give him a neg-am
loan that rolls all the debt into one with a
minimum payment of $1800. Then you tell him you
save $1700 a month and you dont have any other
payments! It's a no-brainer! Yeah it's a no-brainer
alright. Especially considering you've just
amortized 2 credit cards that may have only been
$2000 total for 30 years. No brain needed for this
deal. Then you throw in that you "get to skip your
first payment! So you save $3500 immediately and
$1700 each month thereafter!" Bullshit of course
the first payment is just in the fucking loan
amount. "Then you tell 'em what they can do with
that extra money! Be sure to find out their hobbies
so you can turn those savings into tangible things
like a new car, or a trip to Hawaii!!!" And
I actually believe a lot of the salespeople
are so stupid they believe this - and speak with
utmost sincerity when completely ripping these
people off. It's like being in a
cult.
All of this
while charging a minimum...a minimum of 4 points.
Sometimes the full limit of 5 points. 2 in the
front 3 in the back. It's unREAL. And since we only
make 25%, if you don't charge at least 4 points
you're gonna be hard pressed to make much. But
that's if you can even stomach thinking of yourself
while you're putting these people so upside down
(considering they refinanced
THREE MONTHS AGO) that they will be
butt-fucked when the market turns (it's gonna get
ugly really soon 'round here). It's horrendous.
I've done 2
loans in the 2 months I've been here and I'm sure I
won't do another one. I was a 8-10 guy at the first
place (when I was actually helping people). The
ones I've done here have been people that if they
don't act quick they will lose everything. If they
take my loan and
CHILL ON THE CREDIT CARDS for a
bit, they should be fine - but a quick scan of
their credit report and you know that ain't
happenin'. So although I'm technically helping them
- in reality I'm just one more chunk away from
their equity before the foreclosure. These stupid
ass banks with their neg-am loans - this will bite
them so hard. No way we're not in a full recession
in 3 or 4 years. The government is oblivious to how
bad this is.
And it actually
bit them harder than even I thought. But I nailed the
recession part. We are certainly in it
full-bore.
Now we come to the
Stewart vs. Cramer feud. I have to tell my biases up
front. Love Stewart, hate Cramer. I think Mad
Money is the most obnoxious program I've ever seen.
I'm not even slightly exagerrating. That show makes me
feel like I'm 68. Every second I've witnessed I'm
literally thinking: "Why does it have to be so loud?
Why are there so many graphics on the screen? Does he
have to yell so much?" But whatever, it works for him.
And The Daily Show, I mean come on... it's brilliant.
When Stewart first
slammed CNBC I actually had mixed reactions. Santelli?
Of course - that was a bullshit move he pulled on the
floor of the stock exchange and completely
hypocritical to whine about bailing out homeowners
after the bank bailouts. I personally feel several
homeowners DO need to lose their homes just as I feel
several banks DO need to fail... but it's not a black
and white issue and those acting like it is don't know
what they're talking about. Again, I did some of these
loans and trust me - these people knew what they were
getting into. They were way too risky and they failed.
That's a free market. I was responsible and paid a lot
more for a 30 year fixed... and I'm sitting in my
house right now.
My problem with
Stewart's initial rant on CNBC was that it undermined
just how difficult it was to forecast the Bear Stearns
collapse. You highlight one call Cramer made out of
thousands and it becomes his entire career as a
pundit? It's a little nearsighted. No matter how
annoying the man is, I don't believe he is inept.
It was never his job to do investigative journalism...
he's not a journalist. The CEOs lied, everyone got
completely hoodwinked and he actually nailed it in
Thursday's interview when Jon said "Why would you ever
believe a 35-1 leverage would work out" (paraphrasing)
and Cramer replied: "'Cause from 1999-2007 it did.".
That was the system, the problem is the lack of
oversight and complete eradication of regulations
allowed those banks to hide a shiiiitload.
The point Stewart
does have, in spades, is the lack of the
business media's motivation to BE journalists. That is
a gigantic issue. It might be the biggest loser with
this whole shift to entertainment news. We can bitch
all we want about the obvious bias of Fox News and
MSNBC... but when those covering the business world
are more concerned with making things "look good" we
alllllllllllll suffer.
Then came the
"Cramer Tape". Whew. The same day he is to appear on
The Daily Show, a tape comes out of Cramer admitting
that as a hedge fund manager he manipulated stock
prices and that it's just part of the business.
Suddenly Cramer is an insider who is thinking only of
big business, not the little people. Believe it or
not, I completely disagree - and you have to really
take your emotion out of this to see why. If I'm gonna
get advice about Wall Street, guess who I'm gonna talk
to. The guy that understands how it works. The guy
that was/is in it and can read what it means.
I am not gonna sit here and say: "How
unfair! You're manipulating stock prices? You're using
clout and power to change the market?" Who doesn't
know that? When has it EVER been an even playing
field? The rich and powerful stay rich and in power. I
want to understand how it works. Which is what made
him a good pundit... and which is why I believe him
when he says the Bear Stearns collapse was a shock.
What would his motivation possibly be to say BUY when
10 days later it goes from $60 to $1? It's his
reputation on the line. Business is not a place to get
caught up in "well, that's not fair". Its the
government's job to set the rules and regulations...
and then it's your job to find a way to meet your
goals within that world. I want a guy managing MY shit
who knows those rules and regulations and knows every
possible way (within the law) to maximize my earnings.
If you're gonna be angry at anyone... you get angry at
a government that was in bed with big business to such
a degree that it turned a blind eye to something as
fucking obvious as repackaging and reselling mortgage
loans as "A-Paper" when 30% of the package was neg-am
loans. Fucking. Duh.
My biggest kudos
to Stewart however is not just the balls to do it (no
matter how simplistic he painted this incredibly
complex issue to be) but the way he talks. Him
saying: "This makes me fucking livid." is what we
ALL want to say to these people but it's always
"polite" when other broadcasters do it. Stewart is not
polite... and it's incredibly refreshing. However, the
whole "this is not about you..." line made me want to
punch him. And I was so pissed Cramer didn't attack
him back with: "You're slamming me, asking me to
defend myself... and then when I DO you say it's not
about me? Fuck you." It's a completely manipulative
move and I've seen Stewart do that before. It's so
disingenuous and faux "populist" and really, really
upsets me.
And that's the
thing... this is completely "gray". There are shades
of white in this entire debate, but it gets so clouded
by black bias it's hard to see. The more you learn
about it, the more complicated it gets. Im happy
Stewart brought the issue to the forefront but it's
slightly akin to pointing at the weathermen for not
forecasting 40 days and 40 nights of rain while Noah
went a-sailing. At some point you need to realize that
this is kind of a HUGE event and that it goes far
deeper than weather patterns. Yes, CNBC has far
more effect on the market than the Weather Channel
does on weather patterns... but in the end - the blame
lies with the corrupt CEOs and the inept
government.
And finally,
whether you like it or not Mr. Stewart... you've now
entered an entirely different realm of TV. Gone are
the excuses you had on Crossfire in '04 for why you
gave Kerry a powder-puff interview. "We're preceeded
by puppets making prank calls" is no longer gonna fly.
You are capable, you just set the precedent, and you
are gonna get RAILED if you don't continue.
You've added an exponential amount of pressure to your
show...
