The Hollow Men
"The ultimate result of shielding men from the effects of folly, is to fill the world with fools."
A relatively short note tonight. I will hopefully be posting a new podcast tomorrow, which I intend to annotate, so stay tuned…
We identify occupancy fraud — borrowers who misrepresent their occupancy status as owner-occupants rather than investors — in residential mortgage originations. Unlike previous work, we show that fraud was prevalent in originations not just during the housing bubble, but also persists through more recent times. We also demonstrate that fraud is broad-based and appears in government-sponsored enterprise and bank portfolio loans, not just in private securitization; these fraudulent borrowers make up one-third of the effective investor population. Occupancy fraud allows riskier borrowers to obtain credit at lower interest rates. These fraudulent borrowers perform substantially worse than similar declared investors, defaulting at a 75 percent higher rate. Their defaults are also likelier to be “strategic,” suggesting that they pose a risk in the face of declining house prices.
"The Fed had unique authority...since 1994 to regulate every single mortgage lender in America."
Thank you, Tyler Cowen.
The Obama Factor : A Q&A with historian David Garrow I will be referring to this gem in the future.
What do the Obamas and their circle have in common with each other? They are Ivy League people, who ran away from whatever they came from in order to become members of the credentialed elites, whose loyalty is to the system that gives them prestige—or rather, gives prestige to their degrees, of which they are the holders. Once they pair off and reproduce under the seal of Harvard or Yale, they may find it seemly to donate money to an NGO that offers microloans to female entrepreneurs in Pakistan. So why should Obama, the ultimate winner, carry on the charade that he’s part of a community, whatever that means, with these people? He’s happy to go on NPR and talk about meaning or Marilynne Robinson novels or whatever, to make the wine moms identify with him, so he can put one over on them. Just don’t ask him to visit the hospital when you get cancer, because he’ll be hanging out on someone’s yacht, with the other winners…
They’re all hollow. That’s what the system produces.
Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
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