American Dream Now American Fairy Tale?

Discussion in 'Economics' started by ByLoSellHi, Jun 15, 2008.

  1. Not sure I agree with the conclusion, but this article is pretty entertaining and contains more than few grains of truths, well stated.

    Has the American Dream Become a Fairy Tale?

    by Laura Rowley

    Posted on Wednesday, June 11, 2008, 12:00AM

    Once upon a time there was a greedy young man with shiny wingtips and important degrees. His father, an advisor to the king, had paid the young man's way through an Ivy League college and got him a job managing the village's pension investments.

    The greedy young man went to his magic mirror and said, "Mirror, mirror, I'm at the top of my field, I'm entitled to a higher yield. I'd like to earn that yield today, so I get a bonus with my pay. Tell me now, because here's the thing -- I'm really entitled to earn more than the king."

    The mirror replied, "Call Wall Street please, and invest in mortgage-backed securities. Don't worry whether the yield will last, this way you'll get your bonus fast."

    And the greedy young man went on television, where the media declared him a genius.

    The Investment Banker

    Once upon a time there was a greedy investment banker with shiny high heels and important Ivy League degrees. She went to her magic mirror and said, "Mirror, mirror on the wall, I'm clearly entitled to a windfall. I'm putting upon you the onus -- what's the best way to boost my bonus?"

    The mirror replied, "Here you'll find the recipe -- sell this hot security: Bundle good and bad mortgages together, slice and dice them and sell them as treasure. Don't worry about what's really inside -- anything foul the rating agencies can hide. If you follow my advice today, surely you'll increase your rate of pay."

    And the greedy investment banker went on television, where the media declared her a genius.

    The Bank President

    Once upon a time there was a greedy bank president with a fancy gold watch and important degrees. He went to his magic mirror and said, "I find myself on the executive floor -- I'm really entitled to be earning more. If the stock went up I'd have no cares, since I own about a million shares. Ten other banks have opened on my block -- tell me how to boost my stock."

    The mirror replied, "Hand out mortgages across the land, and sell them to Wall Street as fast as you can. Heed my word in this endeavor, and your stock will go up and up forever."

    And the greedy bank president went on television, where the media declared that his bank's stock would likely go up forever.

    The Mortgage Broker

    Once upon a time there was a greedy young man with a not-so-fancy degree and a leased Porsche. He went to his magic mirror and said, "Mirror, mirror, I want to be rich, tell me where I can find my niche. I've read 'The Secret' and I'm ready for action, I'm familiar with the laws of attraction. My ambition is so thoroughly unbridled, I think you'll agree that I'm entitled."

    The mirror replied, "Now my friend don't fret or frown, but make some loans with no money down. Become a mortgage broker and get on the phone; get some expertise in the 'liar loan.' Find suckers with no income to sign on the line, tell them when the rate adjusts things will be fine. Or sign yourself, who needs permission? Just make sure the loan has the biggest commission. Since you're lending the bank's money there's no hitch, just close those loans and you'll be rich."

    And the mortgage broker went on television, where he starred in a commercial as Crazy Morty the Mortgage Broker, urging would-be homeowners to call him at 1-800-555-4567.

    The Greedy Townsperson

    Once upon a time there was a greedy townsperson who lived in his parents' basement and spent most of his time watching television. He saw the mortgage broker's commercial, went to his magic mirror, and said, "I don't have a job or a fancy degree, but I'm smarter than those geniuses on TV and I'm entitled to a home for free. Should I call the number that I see?" And the mirror replied, "Yes, and then cash out your equity."

    He bought a McMansion and, six months later, cashed out the equity and bought a Lexus.

    The Hard-Working Townsperson

    Once upon a time there was a hardworking townsperson, the neighbor of the man who bought the McMansion. The hardworking man toiled in IT for the bank, where he received raises of 4 percent a year. Unfortunately, his expenses -- food, gas, utilities, taxes, health insurance, college tuition, even the cleats for his kids' soccer shoes -- were rising much faster. He drove an 8-year-old minivan, and had scrimped and saved to buy a house he could afford -- even putting 20 percent down.

    He went to his magic mirror and said, "Mirror, mirror, I'm exhausted. Today at work I almost lost it. I come home from my toil and fall into bed. What can I do to get ahead?" And the mirror replied, "I have no schemes for such an honest dude -- I sincerely hope you don't get screwed."

    The Moral

    And as it turned out, the mortgage-backed securities were not treasure, and the pension fund went broke. The king made up for the loss by doubling taxes. The greedy young man and the greedy investment banker both got lucrative new jobs at a hedge fund run by an Ivy League pal.

    The bank stock didn't go up forever -- it crashed to $5 a share -- but the bank president received a bailout worth $160 million and retired to the Caribbean. The mortgage broker moved to the Caribbean as well, where he was recognized by the banker who had enjoyed his Crazy Morty TV commercials. The banker got him a job running the country club's caddy shack.

    The townsperson who bought the McMansion couldn't afford his mortgage when the rate reset, so the government bailed him out. The hardworking townsperson was laid off with no severance (that money had been given to the bank president). The hardworking townsperson's home plunged in value and his taxes went up (to bail out his neighbor and the kingdom's pension fund). His IT job was sent overseas, where the bank hired a programmer for $8,000 a year.

    And the mirror just sighed at all the trouble. "Another mania, another bubble. The winners get out before it bursts, the man who follows the rules is cursed. With a sense of entitlement and plenty of greed, you can win this game with lightning speed. I've told the tale, and now I'm finished."

    And the American Dream was greatly diminished.
  2. capmac


    Why This Housing Bust Is Worst Ever: The American Dream Ends

    Posted Jul 09, 2008 11:23am EDT by Aaron Task in Investing, Newsmakers, Recession

    Related: PHM, KBH, LEN, TOL, XLB

    The current housing downturn isn't over and is "much much worse" than past downturns, says Barbara Corcoran, who built The Corcoran Group into a multi-billion firm during the real estate busts of the mid-1970s, 1980s and early 1990s.

    This downturn is "grossly different" than those past cycles because homeowners are much more willing to "walk away" from homes, says Corcoran, who sold her namesake firm in 2001 for a reported $66 million and is now an author and widely cited real estate guru.

    Just a few foreclosures - which Treasury Secretary Paulson says are unavoidable - can "put a pall on an entire neighborhood" by putting downward pressure on all local prices, she says.

    The good news is that there's a "Macy's Day sale" in housing right now and buyers are starting to step in. But there aren't enough "brave souls" to stem the decline which Corcoran says will take prices down another 5%-to-10% nationally and end next Spring - in a best case scenario.
  3. Oh definitely, the US has never recovered from a recession in its history.

    No way housing can ever become affordable, ever, ever again.

    I <3 short-sightedness
  4. Brandonf

    Brandonf ET Sponsor

    All of the people who think the American Dream is dead are lazy and or full of shit. I grew up a dirt poor farm boy in Iowa. We did not even have hot water or heat in our house until I was in 4th grade. I can remember spending half the summer chopping wood with my brother's and hating it. We ate potato soup so much I still hate potato's. I was a fuck-up half my life, got into trouble all throughout HS, but finally got my act together and I'm doing very well. In spite of what Mike Moore would have you think our health care system is just fine, I'm LIVING testimonial to the quality of care we get here, as well as the fact that insurance companies will pay what they are supposed to pay (and what they wont pay for, since I've made a good amount of money in my life I can pay for myself). I'm only 32 years old, and if I can pull it off, trust me anyone else can too.
  5. you just killed this thread. Who wants to hear; work hard and you will get somewhere, that was true before time, I am sick of hearing that kind of shit, every asshole can see that and doesn't need to hear it, a life that you earn with your own hard work sucks, sucks like shit, pleasure that comes without working without putting any effort is real pleasure not joy that comes as a result of working like a jackass
  6. Why do you need to be such a cunt to Brandon? A child that grows up without understanding the meaning of a dollar is truly poor.
  7. jem


    I think one of the greatest pleasures is getting paid for your thoughts.

    I think it is what attracts many to trading.
  8. Brandonf

    Brandonf ET Sponsor

    Would agree Jem, I really don't see what kind of pleasure one could take in reward they did not put any effort into getting. I think the poster was joking with his reply.
  9. you are right a child that grows to not know the meaning of a dollar but knows how to manage millions is a poor cunt, whereby one who is raised to think a dollar is something and realizes that anything under several millions hardly means anything only a few years before his death is truly rich

    i wonder why poor families always stuff this kind of crap in their kid's heads?!

    yes money isn't everything but is a tool that tries to trade itself with everything and practically represents almost everything even god

    it is not correct to say that we realize the value of something only if we put effort into gaining it, it might be true regarding stupid people, but is not always valid
  10. [​IMG]

    "After all the highways, and the trains, and the appointments, and the years, you end up worth more dead than alive."
    ---Willy Loman
    #10     Jul 10, 2008