A Wall Street Trader Draws Some Subprime Lessons: Michael Lewis

Bloomberg | 09/05/2007 | Michael Lewis

[Phantom Lord]

A Wall Street Trader Draws Some Subprime Lessons: Michael Lewis

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Full commentary here

[Phantom Lord]

Great article. Read it over and over. Forward it to friends, family, and enemies.

[caltrop]

Whenever I hear someone crowing about "giving back" I can't escape the thought they're the beneficiary of some ill gotten gain and are returning something like .00001% of what they walked off. For their generosity they expect to be treated like God's gift to the human race.

I'll be happy to stand corrected if somebody can point out that his hedge fund was lending at less than prime rates to his sub prime borrowers but I suspect he was realizing a generous rate of return (probably further leveraged) and was being very well compensated as long as the gravy train was rolling.

[Phantom Lord]

The hedge fund didn’t technically lend a dime. What they did was purchase existing loans from lenders to get them off their warehouse line to free up more money for them to lend to more borrowers.

[learner]

What a great article. This guy is right.

[2banana]

So right after the Bear Stearns funds blew up, I had a thought: This is what happens when you lend money to poor people.

BS ALERT!!!! It was not the "poor." It was the greedy and people who had no hope to pay these mortgages. There are alot of "rich" people in that category...

[Phantom Lord]

I did subprime mortgages for 10 years, ending 1.5 years ago.

I can count the number of "rich" people I did these mortgage for on one hand.

[2banana]

I can count the number of "rich" people I did these mortgage for on one hand.

I can count that many greedy rich sub prime borrowers from 1 article....

http://www.freerepublic.com/focus/f-news/1887201/posts

[Phantom Lord]

I read the article from top to bottom. Did not find a single mention of sub-prime mortgages or any evidence that any property in the article was purchsaed with one.

Nice try.

[Toddsterpatriot]

Excellent article.

[Dems_R_Losers]

LMAO. Hilarious article and unfortunately true. I think the biggest mistake the mortgage people made was inventing this neutral word “subprime.” We used to call it B-C-D lending, making it clear that these borrowers had bad credit histories that most lenders would not touch with a ten foot pole. Investors found it too easy to ignore that and just reassure themselves that “subprime” was OK.

[NeoCaveman]

Wow, that’s good reading.

[2banana]

I read the article from top to bottom. Did not find a single mention of sub-prime mortgages or any evidence that any property in the article was purchsaed with one.

Yeah - I am sure ALL these loans were 30 year fixed with a 20% downpayment and the bank verified that she could afford with her verified income...

She hangs up the phone and deflates. It's not been her lucky year. Banks threaten to repossess six of seven investment properties. She slashed millions off prices, but still no buyers. Of her 40 home listings, no sales are pending.

But she wears diamonds and drives a Cadillac and lives in a million dollar home (is that poor to you?)...

[Hoplite]

The writer is also an author of books, and having read “Liar’s Poker”, I think it’s a pretty safe bet to say that he wrote this article with satiric intent.

[Jeff F]

I think some are missing that this piece is dripping with sarcasm and is largely a satirical work. Lewis makes points on both sides of the argument in the process. To strongly agree or disagree with him is to fall into his trap and become a target of his derision.

[Phantom Lord]

Yeah - I am sure ALL these loans were 30 year fixed with a 20% downpayment and the bank verified that she could afford with her verified income

You don't get to make up your own definitions for what constitutes what.

It appears you are trying to claim any loan that is an ARM and has less than 20% equity a "sub-prime" loan.

That is simply and absolutely false.

[Phantom Lord]

I mostly operate in sarcasm and love it. One of the reason I so like this article.

[Jeff F]

I see we have the take on this.

[Jeff F]

To reshape a line from Harry Meet Sally, Sarcasm is more important than sex — after all, how many days have you gone without some sarcasm.

[Jeff F]

Arrgh — make that “When Harry Met Sally”

[Gritty]