Michael Hiltzik says the much-discussed trend of "jingle mail" or "walkaways" where homeowners who could afford to make their monthly payments simply choose not to because declining home prices have made it not worth their while may not be a real trend at all -- there's no real evidence that this is happening.
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Jingle Mail
11 May 2008 10:22 am
Comments (11)
So why did Jose Canseco just tell us this week that this is precisely what he did? Oh and that's what my uncle did too?
Tanta at Calculated Risk has been saying this for quite some time.
Actually, on reading the article, it's unclear just what "trend" the reporter's debunking. It does seem that "jingle mail" exists; the question involves whether it involves people who actually buy their houses to live in or people who bought houses on spec and just taking the loss. It's hardly surprising that flippers are doing this. And, Marshall, I'm not sure I understand you. Are you saying that it would be good for ordinary people to behave more like "human-devoid corporations?" Shouldn't it be the other way around?
Somebody around here should read Bill James. and "Money Ball" which is about Billy Beane's exercise of applying statistical data and Bill James thinking methodology, rather than idiot anecdote, to the operation of a basesball team. With somewhere between 1/6 and 1/4 of the Yankees payroll he produces a playoff team almost every year.
The point is that most of these anecdotal stories --like Jingle Mail --do not represent statistically significant trends. In the same way that many "traditional" baseball management concerns (RBIs, stolen bases, "manufacturing runs" via sacrifice bunts, blah blah blah) have very little to do with success in baseball, "jingle mail" has almost nothing to do with the fundamental issues of the housing meltdown.
It probably is true. If anyone can demonstrate that occurs on even 1/10 of 1% of all mortgages, I will be shocked beyond measure.
Well, I guess I conflated to points. Here is what I think:
1. Households are being rational in defaulting on mortgages that are uneconomic, just as businesses regularly try to walk away from commitments that turn out less rosy than predicted.
2. We tend to condemn households for such typical behavior but excuse it in corporations. If anything, we should be sympathetic to the economic hardship of human beings and have a less tolerant attitude when it comes to faceless corporations.
Somebody around here should read Bill James. and "Money Ball" which is about Billy Beane's exercise of applying statistical data and Bill James thinking methodology, rather than idiot anecdote, to the operation of a basesball team. With somewhere between 1/6 and 1/4 of the Yankees payroll he produces a playoff team almost every year.
The point is that most of these anecdotal stories --like Jingle Mail --do not represent statistically significant trends. In the same way that many "traditional" baseball management concerns (RBIs, stolen bases, "manufacturing runs" via sacrifice bunts, blah blah blah) have very little to do with success in baseball, "jingle mail" has almost nothing to do with the fundamental issues of the housing meltdown.
It probably is true. If anyone can demonstrate that occurs on even 1/10 of 1% of all mortgages, I will be shocked beyond measure.
Of course it isn't a real trend. This is from the same class of crooks and liars who brought us the bankruptcy reform. Mortgage bankers are building on the same foundation of nonsense that credit card bankers built to get legislative relief from their derelict party-throwing, cruise-sailing, houseful-of-new-furniture-splurging customers.
here's an article i saved about Jose Canseco's recent action. lost the link, sorry.
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By Mary Kane 05/02/2008 05:01PM
Baseball's Jose Canseco is making the news again,
this time for the fact that his $2.5 million Encino,Calif. house has been foreclosed on.
But some of the remarks made by the former American League MVP, who once earned $6 million at the height of his career, has more than a few people wondering whether he might have done an intentional walk.
Like millions of homeowners, he apparently realized he owed more on his mortgage than his house was worth.
Did he decide to just walk away? Speaking to the
television show "Inside Edition," Canseco said it
didn't make financial sense for him to keep paying on a home "that was basically owned by someone else." He said he realized he's in a better position than most when it comes to facing foreclosure.
Then, he added "Like I said, my situation was a little more different than most. I decided to just let it [the house] go, but in most cases and most families, they have nowhere else to go."
Just another reason why Canseco isn't a likely
candidate for the front of the Wheaties box anytime soon.
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i agree with the other comments that 'jingle mail' is probably more hype than reality.
in other news, the times this morning has an article on how people downsizing after a foreclosure who stashed their stuff in a storage unit are now losing their possessions because they can't keep up the payments on their space.
this is great news for those 1.3 million Americans who make their living on eBay, though.
I'm sure McCain is smiling.
Marshall,
If you haven't noticed, "corporations" don't give most folks the warm & fuzzies (even though they give us the products and services we need, pay taxes, provide us jobs, etc.), so your fear that public opinion is more tolerant of wrongdoing by corporations than individuals is ludicrous. The folks at Calculated Risk even have a running series where they point out how the NY Times's business columnist Gretchen Morgenson is often full of crap when she writes a "corporations bad/home owners innocent" story.
As for jingle mail not being a major trend, I'm not surprised. The practical issue for most isn't whether their house is worth less than their mortgage, but whether they can get a better deal renting; if not, why move?
Just another reason why Canseco isn't a likely
candidate for the front of the Wheaties box anytime soon.
Perhaps we need to find a cereal to fill the opposite role of Wheaties. Wheaties for Olympic gold medalists and such, while disgraced assclowns get their picture on a box of store-brand fruit loops.
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Heads in the Sand
If it's not a trend, it should be. What we condemn in household economic decision-making we laud as sound business practice by corporations. Why does our society have such a tolerant attitude to empty, human-devoid corporations and such an eagerness to insult our fellow men as immoral?
Posted by Marshall | May 11, 2008 11:05 AM