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Friday, February 27, 2009

WAH! Wall Street Whiner Wants 15 Years of Fame

It should come as no surprise that Wall Street Whiner Rick Santelli wants more than his 15 minutes of fame. Greed has been the mantra on Wall Street for so long that it appears to have rubbed off on the CNBC Correspondent… Not only does Santelli feel entitled to throw stones at the houses of the less fortunate, he also wants to garner sympathy for his own mortgage foreclosure rant, claiming that the attention it drew was a personal attack on his name.

Rick should get a grip … other than the one he was using when he pretended to think Press Secretary Robert Gibbs’ reference to his luxury home was a public threat. To harm him how, exactly? Ring his doorbell and then break his kneecaps with a Louisville Slugger while security cameras recorded everything? Send Child Protective Services to remove his children from an atmosphere of hysterical overreaction? Throw red paint on his wife’s favorite, full-length fur coat? (Assuming that Santelli’s high adrenaline levels haven’t ruled out the possibilities of marriage and procreation)

By going ballistic over the use of taxpayer money to help strapped homeowners avoid foreclosure, when the very industry on which he reports and which he appears to champion has accepted billions in bail-out money, Santelli perfectly illustrates the attitude of self-centered entitlement that has made Wall Street so notorious. “Reward people that could carry the water instead of drink the water,” he said. Uh, Rick? How many more rewards do you want? It is easy to imagine him home alone with his remote, replaying that scene from the 1987 movie Wall Street, in which Gordon Gekko crows, “Greed is good.”

By seizing upon Press Secretary Gibb’s allusion to the obvious… that in Santelli’s own pricey neighborhood it is unlikely that anyone needed an ill-advised home loan to add a second bathroom… or pay for childcare or groceries or a parent’s medical bills… he also illustrates the reluctance of Wall Street to acknowledge that privilege is not inherently a virtue, and that empathy, when missing, can skew perception.

Santelli was happy to be in the center of a media spotlight when he ranted that he didn’t want to pay for his “loser” neighbor’s imaginary mortgage. But he was outraged by the response that maybe that foam of spittle in the corners of his mouth was the result of drinking too much coffee instead of actually reading the Homeowner Affordability and Stability Plan.

Since 15 minutes of fame isn’t enough for Rick Santelli, and since everyone from Kato Kaelin to Joe the Plumber can tell him that flash fame is not a big slice of cake one can have and eat too, here is some advice: Pull up your big-boy skivvies, Mr. Santelli, and help America deal with the mess that Wall Street helped create.

And for God’s sake… stop whining.

18 Comments:

Blogger San Diego Farmgirl said...

The sad thing is there is no good solution. Obama's plan has a lot of problems, but I haven't seen a better one. For too long, our economic growth hasn't been growth at all, but people living increasingly beyond their means on credit, which isn't wealth, it's the exact opposite. How do you correct 30 years of short-sighted economic policy and a culture that rewards immediate gratification? Obama's spendy plan might bankrupt our country, but we're headed that way anyway. May as well swing for the fences I guess.

*sigh*

1:52 PM

 
Anonymous Anonymous said...

I was outraged by that guy! And he thought he was being funny! Let's not forget that it was his greedy wall street banks and their greedy brokers that PUSHED...like drug dealers, these loans on EVERYONE.
Even those that couldn't afford them...or even if they could BARELY afford them, they had to slide (or outright lie) to people and push them in arm change loans, balloon payment loans, huge early pay off fee loans...people that if they just would have had a regular, run of the mill, no points, no frills loan...while tough (with rising gas prices)COULD have made it.
Did the banks try to help those people out before it was too late for them??? You guessed it, you whiny 'fat cat' Rick..NOPE!!!!
SO maybe if you, and all those guys watching you laughing, had a FLIPPING BRAIN...or actually learned something in your Finance classes, that I assume you took, you could have forseen this coming.
Oh well, I guess they were too busy living LARGE and laughing behind our backs on how STUPID we all were to agree to these loans.....NOT SO FUNNY NOW>>>>>Mr. Santelli, is it??????

6:04 PM

 
Blogger San Diego Farmgirl said...

I don't understand people who worship money and Wall Street. People who keep one eye on the ticker all day long. Seems like insanity, to be so possessed by something so inorganic.

Slimy Wall Streeters are easy to blame, and I'm not saying they don't deserve their fair share - they do! However, anyone who has debt and lacks savings must also take some blame. We Americans, as an overwhelming majority, not only bought into the idea of credit and immediate gratification, we went so far as to demand that it's our right.

This is about much more than just bad mortgages. If it were only mortgages, we could handle it. But we're too weighed down with other debt and expenses (not just citizens but our government, too, a double whammy), and we forgot the difference between needs and wants. We knew we were supposed to save for a rainy day, but we chose instead to live in the apartment we couldn't afford, finance the new car we didn't need, buy the giant, electricity-sucking TV, invade Iraq coz that muphuka dern near kilt my Daddy, whatever we wanted today, we put on credit. Worry about tomorrow when it gets here, we said.

I'm not judging, I've done my fair share. I have waaaaaay more debt than savings, I said 'fuggit' and charged the $200 shoes and the Vegas trip, too.

And, I think television commercials have a very real element of hypnotism to them. We've been brainwashed to consume. Disconnect your cable for a few months and you'll be amazed at how clear headed and disciplined you'll become.

The sad truth is, nobody deserves a mortgage, nobody deserves a nice car, nobody deserves to buy themselves a new trinket because they had a bad day. And, I dare say, nobody deserves a check every month from the government because they can't find a job. Not that I think people should starve and suffer, either. But throwing money at a problem never solves it. Hence the anger some people have toward the bailout packages from both Bush and Obama. Just more of the same that got us into the mess in the first place. It's great that Obama's plan includes jobs, not just handouts. More of that, please.

Ultimately, we need an attitude adjustment. If Americans were more self-sufficient and discplined, this wouldn't be such a crisis. (and, we'd all be a lot happier even when times are good)

7:26 AM

 
Anonymous Anonymous said...

I only hope the mortgage broker who lied and cheated me on my last loan that I had to "bail out" myself on...I pray she is in Foreclosure Hell right now...and that nice little company she started off of her lies and cheating people out of their money...I hope, well let's just say I hope Karma really is a bitch! Do I sound bitter at all???!!!!!

9:15 AM

 
Blogger Yakpate said...

To what SDFG said, I would like to add... BOTH of us write for the credit union industry. I don't know about you, but for the past eight years, there hasn't been a single newsletter I produced that didn't have a "Tap the Equity in your Home" article, usually as the front page lead.

Some of the "People Helping People" credit unions were more responsible than banks, emphasizing that a HELOC was a lien on the borrowers property, and should not be used lightly... but just as many took a "Woo-Hoo" approach, pointing out that borrowers could use HELOC funds to "Purchase a Car" or "Take that Dream Vacation," and get a tax deduction that wouldn't be possible with a regular consumer loan.

So, I think a BIG part of the responsibility for the over-extension of home equity credit lies with the lenders... they told members and/or consumers who trusted them that HELOCs provided a tax advantage and were a "smart" financial tool.

Consumers are a lot like kids. If the store puts the candy on the lower shelves where the kids can see it... and then beg Mom to buy it... is it the kids' fault they are eating too much candy?

If the current economic crisis doesn't whirl everyone down the drain, it can be a make-lemonade-from-lemons opportunity. Cases in point: SDFG's amazing home gardening blog; Yak's realization that she doesn't need more shoes; Nikki's hard work to balance her budget and pay down her credit card debt... it goes on.

Finally... like an earthquake or the 9-11 tragedy, today's horrible economy has given everyone something in common. If that increases empathy it will have a positive outcome.

11:03 AM

 
Anonymous Anonymous said...

Pat:

I kinda have to take exception with you here. Having a home loan and it's associated payments and deciding based on my HELOC marketing that you want to borrow is not the problem. The problem is people who will not take responsibility for their own financial well being. Why is it my fault if a person taps all their equity? Why is it my problem that a person can't figure out if she/he can really afford the loan.

Yes, we (I) do say a HELOC has certain tax advantages, but no where ever did we (I) imply that those advantages offset taking the loan to begin with. I'm sorry, but generally speaking it is not HELOCs that did this but people with ABSOLUTELY no self control. They had to have a NEW car and waverunners and new clothes and vacations to fancy places and new furniture and a pool and more diamonds and on and on and on.

Where's the self control and responsibility Pat?

2:21 PM

 
Blogger Yakpate said...

Roy... You're right that home equity lending is not the source of our economic implosion... I was just using that as an example, from my own personal experience, of how marketing drives demand.

However, consumers did not just wake up one day and say, "Gee, what if my mortgage lender could give me a sub-prime or interest-only loan." The banking industry CREATED this loan category to tap every last dollar in the Credit market. Then they presented them to borrowers, and since they were working on commission they pushed them... and pushed them hard. I know, I had one pushed on me.

Maybe some consumers COULD have exercised better judgement, especially those who, as you said, transacted refi after refi to take out mortgage equity to buy more diamonds, Porches, European vacations, etc.

These aren't the people I'm letting off the blame hook, however. Upper income, educated consumers are in a better position to appreciate the risks inherent in exotic loans. Working people borrow for completely different reasons... and they also tend to trust their lenders more, or feel too unempowered to ask questions.

Honestly, I don't think the majority of people who will benefit from Obama's mortgage relief program were flippers. Mostly, they are people who have lost their jobs or are in debt for basic necessities like child care and medical bills, not luxury items.

Compare over-extended mortgage holders to the Wall Street traders who ran, in effect, legalized pyramid schemes and left retirees to hold the bag. These are the people I hold most responsible. And Rick Santelli is their cheerleader.

Nikki is going to write a post about what happened to her when she refinanced. Take a look at it, and see if it doesn't alter your perspective, at least a little.

3:19 PM

 
Anonymous Anonymous said...

Pat and Nikki: Perhaps I wasn't clear and/or misunderstood your post. Of course I believe and witnessed unscrupulous lenders who blatantly took advantage of people with sub prime, liars loans and Alt -A loans. And yes, those lenders should be held accountable; it's why we have a laws that say you can't yell fire in a theatre when there isn't one just because you have the ability to yell. .it just isn't right.. People should not be allowed to hand a loaded weapon to a person who is mentally challenged just because they can hold it and I equate what many lenders did to be equal to that but with a few exceptions I don't see HELOCs or home equity lines the same way.

3:47 PM

 
Anonymous Anonymous said...

The point is...it was many, many things that FINALLY broke down our economy...I agree with SDFG...GREED was the main one. However, greed can come in many forms, greed came from the TOP (White House) and worked its way down. I guess I'm taking up for the little guy...BUT, I think the greed in the oil companies, the banks and the mortgage brokers and credit card (loan shark) companies caused the economy to finally take that final nose dive. I mean seriously, can't they just charge a $5 late fee versus $39???? SERIOUSLY!!!!!
I just don't beleive a few *poor* people who managed to get a mortgage loan caused the final blow!! I believe they were barely scraping by and then suddenly when gas shot up to nearly five dollars per gallon...it was too much...I can promise you I am way more in line with and able to stay within my budget now that gas is under $2 (well, In Ky it is)...it makes a HUGE difference...and being able to drive to work...yeah, employers usually like it when you are able to show up!! LOL!

6:32 PM

 
Blogger Laurie Allee said...

It's interesting to read about credit mania from the perspective of neuroscience. Some people have more dopamine activity and less pull from the prefrontal cortex. The whole instant gratification stuff can blind people to reason from a purely neurological standpoint in a similar way to the fact that some people are wired more for alcoholism or ADD. To judge everyone equally from a "why can't they control themselves" standpoint is missing, to some degree, the fact that some people are clearly less able to DO THAT and that our culture has made it easy to sink. Also, the prefrontal cortex does not fully develop until around the age of 30 -- one of the reasons for most teenagers to act out and many first marriages to break up. We just don't make great decisions, as a rule, before we have full reasoning capacity.

I've been reading a lot of neuroscience lately. Can't handle politics these days.

9:45 PM

 
Blogger Laurie Allee said...

Oh, and I think marketing is largely to blame. There have been studies where people were asked, "If you bought a movie ticket for $10 and then lost it, would you buy another one and still see the show?" Most people say no. But phrased, "If you lost $10 on the way to see a movie, would you still go see it?" MOst said yes even though the loss was exactly the same. It's all about the way you sell money issues to people.

Incidentally, I've written a lot of stuff for the financial industry as well and I think people were manipulated, to a great degree, to looking at their homes as ATM machines and their credit cards as the American Way.

9:48 PM

 
Blogger San Diego Farmgirl said...

Roy, I'm glad I don't work for you anymore, because I'm going to disagree with you on the marketing bit. ;o)

Please keep in mind both Pat and I produced the same kind of marketing you did, so we're not judging you here. We're looking in the mirror, too.

However.

Equity is NOT credit. Equity is capital, and to build wealth, you're supposed to hang on to it, not leverage it to buy a bunch of worthless crap.

Credit unions are supposed to educate their members to know the difference. Even mortgages aren't 'good debt'. There is no good debt. That's an idea spun and sold by bankers and credit rating agencies, and shame on credit unions for being seduced by the promise of growth and going along with it, promoting loans more than budgeting and thrift.

Of course, it's not as easy as credit unions deciding one day to not push loans. Credit unions need loan income to keep the lights on. Credit unions as I'm describing them, all boring and stodgy, that business model doesn't pay the bills. Nobody is going to give their money to a financial institution that doesn't offer branches and ATMs and online banking; without loan and fee income, no financial services provider can offer those things.

So it's not a simple problem to solve. I sure don't have the answers. But credit unions can't stand back wearing halos and claim they didn't participate in this mess. We drank the koolaid too. I've covered this and even sourced some industry folks who admit they would have done it differently. One of the biggest SoCal credit union mortgage partners was Countrywide, and that didn't turn out too well, either.

Furthermore, home equity lending has absolutely kicked the CU industry's butt. As you know, when a homeowner short sales and is upside down, the holder of the 2nd gets the shaft: credit unions.

Nikki, I can't wait to read your blog entry! That's one area I think the government is trying to ignore - all the crooked loan brokers who lied to people. I know so many people who didn't get the mortgage they thought they were - but the brokers are nowhere to be found these days, it would exhaust the FBI to track them all down. Thanks for keeping this issue in front of us!

9:54 PM

 
Blogger Yakpate said...

I think everyone is feeling the anxiety caused by our economy, one way or the other. Speaking to Roy's "Where is the responsibility" question... I can't even imagine how I would feel if I had practiced a lifetime of financial discipline, slowly built a comfortable retirement through the investments I made instead of buying a closet-full of shoes... and then watched it all go down the drain over three months as the stock market bled to death.

If that happened to me, I think I'd want somebody to blame for it... and it would make me insane to see the banker villains get billions while I had to deal with losing everything.

5:54 AM

 
Anonymous Anonymous said...

I agree that the actual consumers who bought houses they couldn't afford have a responsibility in all of this. Even if they were completely fooled and lied to by greedy lenders. However, I think we (Americans) have a responsibility to help our fellow citizens in times of trouble. Whatever the reason, greed, loss of job, no healthcare etc.. these people need help. I am not in danger of losing my home right now (thank God) but I sure would hope that someone would help me instead of throwing me and my kids out in the street to live because I made a mistake and got a loan I could not afford. Where is people's compassion???? One day these same people who are screaming "I didnt take a loan I couldnt afford, why should I, or the govt. help these people? It's their own fault" are going to need help......then what???

7:06 AM

 
Anonymous Anonymous said...

Yes exactly, and I didn't see this same whiner...whining when Wall Street got their big Bail Out!!!

7:34 AM

 
Blogger Laurie Allee said...

I think something else that needs to be addressed is the equating of home ownership with The American Dream. Going back as far as I can remember, "owning your own home" became synonymous with somehow having made it, or being secure. A lot of people I know bought into this and got screwed -- not understanding adjustible rate mortgages, not really wanting to be forced to buy but feeling pressure from society not to rent anymore, especially once kids came along. I really don't understand why owning a home -- incurring that HUGE debt -- has been shoved down the throats of this country to the point of brainwashing an entire generation, many of whom still had huge student loans.

People who were afraid they were throwing their rent money away instead bought, often in the Exurbs, at inflated prices on the idea that real estate "always" goes up and they could always tap into equity. Now, those homes are valued $200K less than their mortgages and the homeowners would have been better off renting.

I'm glad I own my house because it's a place I never intend to move out of. But if I were still stuck in the house I sold to get this place, I'd be pretty unhappy being stuck there.

9:23 AM

 
Blogger San Diego Farmgirl said...

Laurie: Home ownership is the cornerstone of a healthy community because it promotes stability and a nice tax base. Not a bad thing for any society to promote.

However, promoting a mortgage as a status symbol and "good debt" you must have ... you can thank bank marketing and the "mortgage industry" for that one. Yet another industry supported by nothing concrete, so it went *poof* overnight.

I have begged so many people to stop and realize that they're "throwing away" far more money on mortgage interest than they ever did renting. An interest-only mortgage loan is merely a tax-deductible, yet ridiculously expensive, rental agreement with a bank. Those tax deductions everyone crows about don't even begin to cover your property tax bill and maintenance. It's like having kids to get the tax deductions - the math simply doesn't work out!

Home values have dropped so low, it's once again a better deal to buy than rent. But for the past 15 years, you would have been better off renting in California, and putting the extra you would have paid for a mortgage, taxes and maintenance into a savings account. You'd be able to pay cash for a foreclosed home by now, imagine that!

Now THAT'S wealth! A nice $200K asset owned free and clear, and not a dime wasted making bankers richer. What a concept, eh? LOL

11:19 AM

 
Anonymous Anonymous said...

SDFG--I was just LMAO at your analogy to have kids for the tax deduction....SO TRUE!!!!!!!!!!!!!!!!

7:09 PM

 

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