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Post a Comment On: Steve Sailer: iSteve

"Bankrupt Stockton: Was the mortgage meltdown a government-sponsored affinity scam?"

11 Comments -

1 – 11 of 11
Anonymous Dave Pinsen said...

If memory serves, Barry Ritholz was skeptical that pro-diversity policies played a significant role in the mortgage bust when you first blogged about this. Now that quantitative research is lining up behind your thesis, have you considered reengaging with Ritholz about this?

4/2/13, 4:53 PM

Anonymous Nair said...

It can't be that minorities would hurt other minorities, so it must be that evil white men were intentionally hiring minorities, knowing that those minorities would intentionally scam other minorities and make loans that would seriously screw up the banks the white guys work for in the long run and have their pensions tied up with, er, uh something like that. Except for that last part. Down the memory hole with that.

4/2/13, 5:08 PM

Anonymous countenance said...

As we've seen in very recent political history, "Doubling Down on Diversity" and "Libertarianism" are one and the same (cough cough, Rand Paul, cough cough)

May I be so haughty as to offer a third (or should that be second?) option to the "choice" between DDOD and libertarianism?

White nationalism.

4/2/13, 5:59 PM

Blogger sunbeam said...

That's a lot of words to basically say (even if it wasn't what you thought you were saying) that mortgage lenders had a product to push, so they picked the most effective people to sell to the target.

Where I live, I kind of cringe when I see a sign for a "Christian" business, or hear someone use that as a selling point.

Kind of like how there used to be a correlation between being a Deacon in the church, and also being an insurance salesmen.

To go back to your argument, these lenders weren't holding the mortgages. They were being sold as quickly as they got them made, in ungodly combinations of financial instruments only a quant could love.

Anyone who knew anything at all about this, knew it was going to blow up.

If anything, I kind of think some of these minority salesmen probably didn't really understand the whole system. Their job was to make reassuring noises, make sure everything was signed. I doubt many of them really understood interest, or where these mortgages were going to go. They probably got a genuine warm fuzzy from thinking they were helping people and making a difference.

And a few did understand what was really going on, and cynically played the "race card" to rip off members of their specific ethnicity.

So what? A story as old as the hills.

You might even say it is the American Way.

I don't see how anyone puts the blame for this on anyone but the lenders, the regulators, the elected officials who set up or allowed to be set up the whole system, and the Fed that threw a lot of low interest rate gas on the fire.

These people knew what they were doing. And they had a pretty good notion how it was going to end I wager.

Yet they did nothing. And why not? It's not like it was any skin off their ass after all.

When you make arguments like this, you can't have it both ways.

Or do you really expect people that buy lottery tickets to understand that paying 70% of your income on a mortgage payment is a bad idea, or that that balloon payment is going to explode like the hammer of the gods in two years.

After all, the sales guy probably told them "you can always renegotiate" or "we can do something in a couple of years."

What is scary to me is that I really think a lot of them believed their own bullshit.

4/2/13, 6:02 PM

Anonymous Bill said...

Heartiste/Roissy published a very instructive inside look at this a few years ago:

My Time Inside The Housing Bubble

...the Vietdon looked carefully around the room, eyeballing each one of us.

“This is good, very good.” He was smiling and nodding his head. “The way it works here is simple. Trust. You earn the client’s trust and your business takes off. They trust you, they sign on the dotted line. So, for instance…” He pointed at the Asian women. “These ladies are assigned to female clients. Asian women in particular. They will trust them.”

The Asian girls snickered and one uncrossed and crossed her legs. I watched her crotch as she did this.

The Vietdon continued. “And my boys over there…” The Hispanic guys laughed. “They get the Hispanic clients. This is the way it works in this business. Now let’s be real. Most of our Hispanic clients aren’t high rollers. They’re struggling, making ends meet. They got families. They need houses to put those families in. They work hard. To get them to sign on the dotted line…” (He loved that expression.) “…you’ve got to put their minds at ease that you’re looking out for them. They trust someone who looks like them, you know?”

More nods of agreement from the Jose contingent.

“Then we’ve got our white guys.” At saying this, the Vietdon smiled broadly. “You guys, you go out in the field with a casual button down, one button at the top undone, nice shoes, real tall all-American look, and people with money trust you. I get some white clients… not too many because, you know, we mostly deal with the underserviced community…” (The group chuckled.)

4/2/13, 6:41 PM

Anonymous Mr. Anon said...

They unwisely chose to be members of the wrong ethnic group.

4/2/13, 9:06 PM

Anonymous jody said...

perhaps the poster who pretends to be nick diaz will comment, as stockton is the hometown of the real nick diaz.

want to take credit for mexicans bankrupting stockton, nick diaz? or do you only post when you're not recovering from getting beat down by plucky canadians named georges?

4/2/13, 9:16 PM

Anonymous ben tillman said...

And a few did understand what was really going on, and cynically played the "race card" to rip off members of their specific ethnicity.

Where's the ripoff?

They put no money down for a chance to flip a house for several hundred thousand in profits. That's a bonanza.

4/2/13, 10:30 PM

Anonymous Anonymous said...

Steve: Have you read the Michael Lewis book The Big Short? It provides an interesting account of the other half of these deals; namely, the manner in which these mortgages were packaged and sold as bonds by Goldman Sachs et al and insured by the likes of AIG and how it all fell apart to the cost of everyone other than those who looted the system.

4/2/13, 10:45 PM

Anonymous Anonymous said...

Stockton is not a "exurb" of SF. It's a town/city in its own right that goes back almost to the Gold Rush. It's well situated at the northern end of the San Joaquin Valley amidst rich farmland and on the San Joaquin River, which connects via the Delta through the Suisun Bay into the Eastern SF Bay. It is, or was, one of the busiest inland river ports in the US for well over 100 years.

None of that is to take away the point that the city has been overwhelmed by demographic disaster.

4/3/13, 4:08 PM

Blogger Dutch Boy said...

Interesting that members of ethnic groups from "low trust" societies grow trusting in the good ol' USA. Perhaps a tad of "Americanization", e.g., like the absurd amount of trust Americans have for government officials and government in general.

4/4/13, 12:23 PM

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