AAPL of My Eye in Today's Market Meltdown (Plus Subprime Rant)

As of 12:53pEST the market is MELTING DOWN. However, AAPL shines (up 7.25/+5.36% at $144.91). See the bright green boxes in my Technology (middle left), Random fave stocks (middle middle), S&P500 (top center), and SmartMoney1000 (upper right) mapstation maps -- AAPL is the only company that's strong green.

[Full Disclosure: I do not presently own AAPL stock, but that can change at any time. This blog is being authored on an Apple Macintosh, however.]

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My (admittedly biased) rant on the greed aspect of the vaunted subprime/credit shutdown ripple effect influencing today's massive selloff: Imagine you are an unremarkable and unscrupulous loan officer working for a big unremarkable and unscrupulous bank at the height of the post-dotcom-bust real estate speculation bubble. Imagine years of pent up envy at all the twenty-something Internet brats who got rich and you didn't.

Imagine all the checks and balances in responsible lending getting thrown out the window because your even-more unremarkable and unscrupulous superiors rewarding you to approve more mortgage applications than not. Imagine you do this with aplomb, mining a huge market of not-so-well-off and credit-compromised immigrants or minorities who all want a piece of the "American Dream" of owning homes that they cannot possibly afford. Imagine it being easy money because all this time you've been rejecting their applications and suddenly they're your best customers. Imagine all the fudging of applications you do on behalf of your applicants, and all the fees you are going to collect selling these bad mortgages on the secondary market.

Then imagine that a thought does actually cross your mind that these people are probably going to default on their mortgages because they are almost always interest-only with a short balloon period, a balloon that will double their payments within a few short years. But you don't mention that to them - no, you artificially suppress the interest rate to give an equally artificial sense of invincibility to these people (despite their willingness to roll-the-dice). You simply tow this despicable line, emphasizing the upside and not the downside, like the thousands of other predatory lenders like yourself reaping the short-term benefits of a raging bull market in real estate.

Next, imagine that all these easily-acquired houses have more than proffered up a bubble pricing period, and that not only are the poor defaulting on their loans, now the middle-class mortgagees with (once) good credit are also getting hit by these balloons and cannot make their payments either. And imagine all the American Family divorce rates skyrocketing because of the stress at not being able to sell their houses (to get out from being underwater) because nobody's buying houses now and the millions of personal bankruptcies that will need to be declared.

Imagine your contribution to capitalism at its most elite-serving finest in your complicity with your equally lax and unscrupulous cousins in the real estate biz (agents, brokers, and appraisers) as well as Wall Street. Imagine how hard it's going to be for an honest person to get a mortgage now since the blowback rules following this mess are going to be utterly applicant-hostile in our typical hyper-reactionary American response to anything scary.

Then imagine the Federal Reserve's estimate of $100 billion worth of loss these defaults will create, leading to astronomical amounts debt being written off, record foreclosures, entire neighborhoods getting boarded up, big banks like the one you work for shutting down entire lending operations, hedge funds tied to packaged subprime mortgage-backed securities blowing up, 2nd and 3rd party mortgage companies filing for bankruptcy, senate hearings and federal investigations, Bernanke needing to account for it about it every week for the past year, your shenanigans making lots of headlines around the world about how this may even exceed the S&L disaster only a few decades ago, and the large-scale Fear, Uncertainty, and Doubt in the American Banking System that led to today's market meltdown. Imagine the huevos grande you have in being able to undermine THE MARKET itself.

Imagine you ultimately washing your hands of any wrongdoing and blaming the victims for "not reading the fine print," or "hey, they lied about their income." Imagine your smugness in being so able to game the system, a system that is based on the noble vision of enabling home ownership through federally and securities backed leveraged debt instruments. Imagine that today the Financial Times would actually report on t-shirts made by traders betting against mortgage-backed securities cheerfully proclaiming, "I Short Your House."

Are you imagining all this while you are swinging on your hammock on an empty beach somewhere in the Caymans where all the money you made from flagrantly abusing financial naivete is earning lots of nice returns in securities rather than real estate? No? You mean today's 300+ point drop fucked your portfolio, too?

Now, finally, imagine that your name is on each one of those bad mortgages you underwrote, and imagine your heart stopping the moment you realize the massive paper trail you left behind (in triplicate) for all interested federal regulatory investigators to audit, you stupid greedy fuck.

But, sadly, imagine that you're ultimately going to get away with it, because greed is like a weed -- it's always lurking, waiting to spread again after the next rain, even when we've done our bloody best to root it out of our garden. Imagine that.

CNN: The Subprime Blame Game

Senator Dodd on Mortgage Market Turmoil 

FT: Subprime Coming Home to Roost?