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This American Life tackles the mortgage crisis

May 12, 2008

If you listen to podcasts, I think you should you check out a post Get Rich Slowly wrote today, The Giant Pool of Money: Anatomy of the Subprime Mortgage Mess.

J.D. talks about this week’s episode of “This American Life“, perhaps my favorite NPR show. I usually end up downloading it through a podcast, but I happened to catch this week’s episode on my way to pick up T on Friday. It was an excellent sort of friendly view of how this whole mortgage mess came to be.

The show starts out talking to a guy with several part time jobs who was loaned half a million by the bank, though he himself admits he has friends who are essentially loan sharks, and they wouldn’t have even lent him it. It goes on to talk to a young guy who was just out of college making $75,000 a month, and when that dropped to “just $25,000” it didn’t even cover his current expenses. It talks about how the financial industry is handing out awards for creating product that almost brought down the entire economy. It talks about NINA loans, or “No Income, No Assets” where banks didn’t ask how much you made or how much you had in the bank before writing you a loan. It explains how many people knew that what they were doing wasn’t sustainable, but figured it was the problem of someone higher up on the chain.

J.D. took a lot more time than I could and wrote a great summary, so please read his post and consider listening to the episode!

4 Comments leave one →
  1. May 12, 2008 7:07 pm

    SERIOUSLY? $75k/month!? I can see how some people go insane..

    But they should’ve known it was too good to last. Nothin’ that “good” lasts for long. There’s always a bigger bitchslap in the end to match the amount of karmic crap you put out there

  2. May 12, 2008 7:20 pm

    That is what I was thinking! If I was just out of college making that kind of money, I just MIGHT think to myself, “man, is what I’m doing really worth this insane kind of money? Probably not! Perhaps I should save some of this!”

    Or you know, I could go crazy too, you never know. But wow. It was fascinating.

  3. May 13, 2008 2:57 am

    I love This American Life. 🙂

    Ira Glass has a great voice for the show. I haven’t heard this one yet, but the podcast is in my iPod for the gym today.

  4. tom permalink
    May 13, 2008 5:39 am

    The crazy part about it is that the kid was just out of college! What blew my mind was that he saved almost none of it and now he’s trying to prevent his house from going into forclosure! If I was making $75K a month I would most definitely blow a lot of it on nice stuff… but I would pay cash for it AND I would be saving a ton of it too. I can live as well off 40K a month as 75!

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