Tuesday, August 21, 2007

Lost another one to Ditech!

"Neither a borrower, nor a lender be; For loan oft loses both itself and friend"

And sometimes your shirt. Remember weasel-faced founder and CEO of Ditech, J. Paul Reddam who back in the 90's urged us to borrow up to 125% of our home values to "jump on a hot stock?" That was of course, just before those hot internet stocks tanked. You'd think that would have been a lesson, but although Reddam bailed out of Ditech right before the illegal kickback indictments were handed down and any number of people began to question the wisdom of listening to him, borrowing seems to have become as fashionable as trucks and the folks who have been living by borrowing increasing amounts on their ever rising home values are beginning to feel a truck is parked on them. Foreclosures are booming in my area and retail sales are down.

Of course the credit crunch, the decline of earning power of the American worker and the other financial woes in the papers today are bringing back the crackpot attacks on capitalism itself. Barbara Ehrenreich at the Huffington Post has an amusing take on the current "revolution" by the working poor but she agrees that the credit crisis doesn't signal the end of capitalism any more than did the crash of 1929. What it does signal is the need for responsible regulation and the need to strangle people who insist that the market will take care of itself and everything else from hedge funds to the Mexican guy that rims your hedges. What it proves is that cheap credit is not a substitute for income - at least not in the long run and that we need to get rid of a government that favors corporate profits at the expense of wages, investment, safety, public health and national security.

1 comment:

ditech said...

good thought.. i tried calling them.. they kinda fishy i think