Columbia Savings Revisited

Several memorable things in my life were tied to Columbia Savings. The first was the explosion of the space shuttle Challenger. I was a recent college graduate working for a large international accounting firm, KPMG Peat Marwick. I remember sitting in a conference room, clad in a conservative business suit, already on hour 5 of an 18-hour workday. These were the days before the Internet; we still relied on the Big 3 to provide us with news. One of the higher ups came into the room, solemn look on his face, and turned on the television. The ten of us sat there and watched hope gone awry....seven lives gone due to an improperly sealed O-ring.

A few years later, the "Feds" came in and took the CEO, the CFO, and several others out of the building in handcuffs. It was a scary sight. These were our friends...our role models. What the hell? What was going on?

The S&L crisis changed the American way of life. Without an extensive legal or financial background, you may not understand how. But, trust me, rules were changed. I worked for the next several years with the Resolution Trust Corporation (RTC), the branch of the government created to ensure that we would all enjoy a safe financial future. They were a bunch of dumbshits who had absolutely no chance of being hired by Peat Marwick, or any other reputable company. Like so many, the government is a safe haven for idiots who crave authority.

Moving on. Despite the noble efforts of the RTC, the country is facing another financial crisis. As interest rates have gone down over the past several years, a new brand of leech has been unleashed on the unsuspecting public. The mortgage broker. We are in a housing crisis due to the prevalence of SUBPRIME loans. Let me explain. In the past, a family had to meet certain requirements in order to obtain a mortgage. They had to earn enough income, own assets, show that they would be able to meet ongoing financial obligations. Banks and S&Ls had strict underwriting requirements. They extended credit and collected interest in return. Borrowers had to be a PRIME candidates to qualify for a mortgage loan.

Today, the mortgage industry has gone wild. There are zillions of mortgage brokers who can find ANYONE a loan. They shop around for a third tier underwriter who is willing to lend the money. The broker receives a large commission. The underwriter receives an origination fee and various other payments. Neither care if you are in over your head. They will offer you an initial rate of 2 or 3% with adjustable rate mortgage (ARM), and convince you that rates won't go up much. You can afford it. Buy that bigger house. Once the deal is inked, the lender simply takes the cruddy mortgage portfolio and sells it to the next prick in line, greedy for the soon-to-be usurious interest payments.

For the past two years, mortgage rates have increased. Over a trillion dollars of ARM loans are due to reset in the next 18 months. Homeowners' adjustable payments have gone from $400/month to $600 to $1500. With no end in sight. Foreclosures are at an all time high. Too bad for the idiots, you say? Well, I would normally agree with you. But let's hope that you don't have a house to sell. As the banks divest themselves of the properties they've foreclosed on, real estate prices will be driven into the ground. The lenders will have to write off trillions of dollars of bad loans, likely rendering many of them insolvent. Huge investment funds tied to subprime loans will become worthless. Many Americans will lose their homes, their market investments, and their ability to obtain future credit. I'm predicting another bail out that will cost the taxpayers billions.

Meanwhile, my best friend saw the potential in the industry, despite the fact that she knew nothing about mortgage banking, and earned $18,000. Last month.

Super Duper Heroes

Let's grieve for Ken Jordan. Let's grieve for him as a beloved son, a cherished brother, a loving boyfriend. But must we grieve for him as a slain police officer, one who died to protect us? He didn't give his life. His life was taken from him by a drunken asshole. Just as the lives of the teachers at Columbine were taken, the lives of relief workers and journalists in Iraq and elsewhere are taken, the lives of nuns caring for the downtrodden in dangerous countries are taken.

Since 9-11 we've been conditioned to worship the "public servants" who fight our kitchen fires and bust our teenagers for tinted windows. Does anyone really believe these guys chose such a career because they care about us? The same can be said about our soldiers. With rare exception, men who choose a career in police/fire/military do so because it works for them. They don't want to work at Wal-Mart, can't work at Apple. The idea of carrying a gun appeals mightily to the kid whose head was bashed into the gymnasium locker by the big jock with the cute cheerleader on his arm. The idea of dressing up in a dapper uniform and becoming part of a powerful club resonates with the guy who has a lot of testosterone, quite a bit of adrenaline, but little else to distinguish him. They love their institutional authority. They enjoy pulling over the red BMW and watching the rich guy quake in his Bruno Maglis. They relish wiping the tears of the pretty girl who didn't give them the time of day in Junior High.

I saw the procession for Officer Jordan yesterday. And, yes, it brought a tear to my eye. But not because he was a cop.

Sorority Girls

This post was made by a friend of mine on his blog, notmytribe.com

I have nothing, nothing, nothing against sorority girls, nor society girls, they’re just fine.

I remember sororities at college. They provided camaraderie and support for women in educational institutions that had only comparatively recently become co-ed. And sororities prepped girls for the veneer surface of — I don’t know — a life of little academic enterprise after college?

Sororities taught girls social skills and cemented a community fashion. Not fashion in the creative sense but rather a pageant of the accepted norm. Beauty as a dress code that everyone could feel excited about despite it being ludicrously conformist. Sororities also reinforced the preening considered necessary to attract the ambitious corporate male who sought a domestic arrangement in much the same way that he courted a career. For girls who were neither creative, independent, nor perhaps all that complicated, sororities extended the home economics lessons to the prospect of hiring maids.

What do sorority girls do after college when their only idea of extra-curricular means to hold an ice cream social? I don’t want to demean what they do, they have children of course, and run communities. And when there is time, they do lunch. And when there’s charity afoot, these girls do as their sororities did and conduct a benefit.

I saw such a benefit recently, an enormous social function, an annual society event, the cumulative product of countless sub-subcommittee meetings. I could say that the beneficiaries of the charity could have mattered not the least, but that would in this case be most inaccurate. Two factors:

At Newborn Hope the fuzzy bunny factor is in overdrive. Money raised is “for the babies!!!” Specifically babies born prematurely in rural areas without access to urban hospital programs. The money goes for brochures and nurse training programs which teach, basically: Get that baby to the city stat!

So it’s not just that the NBH charity is for a demonstrably compelling, in-your-arms-tangible cause, but the chief beneficiaries, as with traditional sororities, are the sorority girls themselves. Making a rough estimate of the figures, I can approximate that well over half of the resources generated by NBH go to feeding itself. Throwing the big party, holding all the planning meetings, that’s the primary function. The money these women spend goes to pay for the luncheons and the overhead. It’s a great boondoggle for The Broadmoor and the shops which get to advertise through the annual function, the NBH fashion show.

The time which the girls expend toward putting it all together is also a large resource redirected. The girls are not driving the taxis nor holding any babies. These philanthropists are holding lunches, paying for the lunches themselves, eating the lunches themselves, and planning for themselves the next one. While it might be uncharitable to ask these ladies to give directly, albeit unselfishly to a good cause? Do premature babies have to settle for only a fraction of their self-serving dollar? Such sorority-style events are very similar to a retail store charity model where an advertized small percentage of sales, nothing extra from the customer’s pocket, is promised to go to a charity.

And what about the charity of premature babies? Wouldn’t a public health matter be best addressed by a public health program? Here you have rich Libertarians who would rather contribute their table scraps to the cause, rather than support taxes to improve the health system thereby resolving many health problems, among them premature births.

And in Colorado Springs there is the Christian Anti-abortion element. NBH plays straight into the hands of the Respect Life crowd. Anything that forces a pregnant woman to commit to her pregnancy, prematurely.