December 2007 Archives

Like most people, there are some experiences in life I usually try to avoid. Most of the time it's part of an aversion to some sort of discomfort, usually phusical or psychological. Then there are those aversions which are completely irrational and get their own category:

I call one of them, "Brooklyn."

I can't really explain why I get so unnerved in Brooklyn. It could be the multi-million dollar mansions situated in anotherwise aesthetically depressed area, or the overwhelming particular Jewisness of the area one that can only be circularly defined as "Brooklyn."

Still, all fears must be confronted at some point so yesterday I joined my mother and grandparents on a little errand running excursion to Coney and J. The thinking was that while the rest of New York would be shut down - I can't remember crusing down the West Side Highway that quickly in midday - Brooklyn would be running along as usual. I didn't break out into hives or start convulsing, but there were definately some notable Brooklyn highlights:

• I was in Eichlers and overheard a father and mother (different families) with respective children recently engaged (not to each other) were comparing notes on wedding preperations (ketuvah, "backup tenaim," etc). In the course of their conversation, the woman complimented the man's tie. In the spirit of holiday, the man replied, "You like the tie? It's yours. I can get these for $5." and proceeded to take off his tie, puts it on the counter, and gives it to the dumbfounded woman.
• Waiting for my mother and grandmother in one of the Brooklyn dress shops, I noticed that the background music was not only sung by female, but the song was "White Christmas." I can excuse the vocalist because the only men who would enter the store would presumably already be beyond saving. But regarding the song choice, perhaps they consider it Jewish Music after all.
• Someone behind the counter of a pizza shop called over a teenager and asked him if he was new in town. The teen said yes and asked how he knew. The man said it was because he noticed that every time the teen got up from a table someone else came and took it, adding with a smile, "you've got to be more careful around here - don't be so trusting."
• And finally there was this priceless exchange at the same pizza store with an obviously appreciative customer:

  "God bless Christmas"
  "Yeah, only a Yid could pull this off."

You know, I may need to take Brooklyn off the list.

Maybe just for Christmas anyway.

We recently mocked big business for outsmarting themselves in the subprime crisis, but it seems that there's plenty of criticism to go around. Take for example, this powerful New York Times article of the subprime crisis' impact on communities. To be sure, people are living scared and are understandably nervous about losing their homes and even treading financial water. And we can even grant that lenders have and still do engage in predatory lending practices, including student loans.

But just as we must hold big businesses accountable for their unethical practices, we must also examine the motivations of the affected individuals involved as well. Specifically, while big businesses are motivated by profit, many "victims" sought to maximize consumption with minimum immediate and therefore minimum visible cost. For example, the article reports that one person facing foreclosure, "bought her Bronx home for $535,000 with no cash down." For many people, myself included, $535,000 is a great deal of money. To "purchase" a house for that amount entirely on credit demonstrates not just a lack of financial acumen, but the immature mentality of expectation and entitlement i.e. that desires ought to be satisfied immediately.

Worse is that people aren't even learning from their mistakes. The article continues:

In some cases they cannot even work up the money to furnish their homes. Few customers have visited Boston Road Furniture, despite a handwritten come-on taped to the window that promises anyone can “Get Up to $3,000 Instantly No Job No Credit Check.”

The proprietor adds:

“We need a government loan,” he said. “This country is falling apart. We need customers. We need some help. So many ‘For Sale’ signs in this neighborhood. People just have to leave their homes and run.” [emphasis added]

The communal mentality is firmly entrenched in credit as a normal way of operation. True credit and financial liquidity are an essential part of economic systems, but here we have the epitome of short term financial thinking. Immediate interests are always satisfied, while the inevitable costs are simply ignored and disregarded - out of sight, out of mind.

Big businesses did take a hit for their own corporate greed to the tune of several billion dollars, and deservedly so. But while there are no doubt actual victims of the subprime crisis, there are also affected individuals who are now facing the consequences of their own materialism.

I refer all others to SNL'a helpful advice.

In belatedly commemorating Rabbi Abraham Joshua Heschel's 100's birthday, the Center for Jewish History bemoans the absence of a contemporary equivalent, asking "Where are the Abraham Heschel's of today?" For many liberally inclined Jews, Heschel was the Gadol Hador - a prolific, erudite, knowledgeable scholar who synthesized traditional texts, academia, with contemporary sensibilities and ethics of activism. The problem, apparently, is that no one - or at least not enough people - has sufficiently assumed Heschel's mantle.

In the world of competitive finance, there's never a bad time to make money. Sure the subprime market has many feeling the pinch, but the real opportunists find ways to profit in any circumstance. For example, one strategy is short selling or in other words, betting on a loss. In a must read NYTimes article, Ben Stein examines Goldman Sach's practices of knowingly creating and selling flawed financial investments while covering themselves in the process.

But it's not just the Big Guys who are getting all the breaks. In my favorite story of the subprime fiasco, some people are fighting foreclosures with impressive Talmudic reasoning:

A Federal Court Judge rejected 14 foreclosure claims by Deutsche Bank, which was trying to collect on securitized sub-prime mortgage loans it acquired. The judge stated that the Bank did not really own the “bad loans” because it acquired them after defaults had already occurred. He asked the bank to prove it held the mortgage at the time of the foreclosure notices or said he will dismiss its claims.

The snowballing effect of subprime defaults is the result of repackaging, revaluing, and reselling various debts to various investors. However, once the debt is securitized and resold it can be difficult to track down who owned what and when. As a result Deutsche Bank not only loses on the initial investment, but cannot even recoup the losses through the typical hedge of property foreclosure.

Almost makes you feel sorry for them.