A few times I have caught Storage Wars, a television show on A&E. When storage units customers do not pay their fees, the contents are auctioned off by the storage unit company. The show follows professional treasure hunters who bid at these auctions. The catch is that the treasure hunters are purchasing the unit without full knowledge of the unit's contents. With all the drama of finding out what was behind door number three on Let's Make a Deal, viewers get to watch these treasure hunters paw through the storage unit's contents and try to profit by finding items of real value. Every now and then, an item of tremendous value might be uncovered. A few days ago, I started wondering how this was legal.
Category: Books and Movies about Debt
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Must-read Crisis Book
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Today's mail brought my hot-off-the-press copy of the essential crisis reference, The Subprime Virus by Kathleen Engel and Patricia McCoy. Subprime Virus chronicles the rise and fall of the subprime market and the regulatory (non) response, from the Clinton Administration through the 2007/2008 financial crisis, the bailout and the Dodd-Frank reform legislation. The most vital contribution comes in Part III, where the authors relentlessly catalog the missed opportunities, systematic capture and complete failure of one regulatory agency after another, including the Federal Reserve, the banking regulators and the SEC. The authors, of course, enjoy a unique credibility for having warned us early and often about the dangers of subprime lending and securitization, for both homeowners and investors. For those looking for an authoritative, scholarly and accessible account of the subprime crisis from its origins in the predatory lending of the 90's through the bubble, blow-up and bailouts, look no further.
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Subprime Crisis Books
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As the subprime crisis enters its fourth or fifth year, depending on when your version of the story begins, there is an ever-expanding menu of crisis books to choose from. I have particularly enjoyed the less scholarly and more journalistic tales set in the boiler rooms of Orange County California (the Monster, by Michael Hudson) and the towers of Wall Street (Griftopia, by Matt Taibbi). Others on my list include Dan Immergluck’s Foreclosed, and Thirteen Bankers, by Simon Johnson and James Kwak, which tell the stories of mortgage regulation/deregulation and the financial-regulatory complex, respectively, less colorfully but more exhaustively. Next on my list: The Big Short and Too Big to Fail. The bookshelves are also bulging with chronicles of collapsed (or nearly collapsed) companies—Lehman Brothers, AIG, General Motors, etc… So gentle readers, which are your favorite crisis books?
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Credit Crunch
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For virtually every hobby, interest or passion, there are bumper stickers, posters, Christmas tree ornaments, and desk knick-knacks. I like golf; I like to knit; I like basset hounds, and I have a haphazard and modest-sized collection of stuff that represent those hobbies. But for those of us who give the term "credit junkie" a different spin, it's pretty slim pickings. What am I supposed to do, collect discarded credit cards?
So I was delighted to find the "Credit Crunch" t-shirt, advertising "Crispy Sugar Coated Nuggets of Nothingness." It's sized just right for my sons, one of whom models it below. I dutifully explained to my children that this shirt is about what Mommy teaches. They nodded politely. Later my 4-year old told the grocery store clerk that his mom is a Professor of Cereal!
p.s. I have categorized this post under "Fine Arts and Credit & Bankruptcy" because I have no idea why we have that category as a blog!
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Some Thoughts from Ray
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While consumer credit was booming a couple of years back, I posted about one of my favorite tunes, "Master Charge," by blues legend Albert Collins. This evening, I've been sitting here writing with my iTunes list going, and a different tune hit my ears as more appropriate for today. It's "Busted" by the great Ray Charles:
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Bankruptcy Bill, the Cartoon
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For those of you who have not found it, take a peak at Bankruptcy Bill, a comic strip by Gideon Kendall and Steven Horowitz. Five strips have appeared so far. You’ll have to click through to read them. I won’t post any of them here because I don’t want to be forced to proofread every Excel file that has been filed in the Lehman bankruptcy (the bottom of this post explains). I especially recommend Bankruptcy Bill‘s bankruptcy haiku page, which builds on a literary tradition from the contract-law focused Raintree County Memorial Library Occasional Paper Series. By the way, thanks to Bankruptcy Bill for the shout out to Credit Slips on its blog roll.
(For the uninitiated, the Raintree County Memorial Library Occasional Paper Series can be found at the following citations: Douglass G. Boshkoff, Selected Poems on the Law of Contracts, Raintree County Memorial Library Occasional Paper No. 1, 66 N.Y.U. L. Rev. 1533 (1991); Douglass G. Boshkoff, More Selected Poems on the Law of Contracts, Raintree County Memorial Library Occasional Paper No. 2, 91 Nw. U.L. Rev. 295 (1996); and Douglass G. Boshkoff, Constructive Haiku and the Law of Contracts: Raintree County Memorial Library Occasional Paper No. 3, 39 Ariz. St. L.J. 135 (2007).)
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Contracts in Crisis: Variations in Z and S
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Luigi Zingales of Chicago GSB put out a mortgage modification proposal about a month ago that got a bit of attention, but deserves more even if it has no political prayer. It is one of a genre — advocating across-the-board contract change in response to a macro shock — that has at least two other prominent exponents, Randall Kroszner and Joseph Stiglitz. I am noodling this literature for a U. Conn. symposium paper.
Zingales proposes legislation to allow homeowners to reduce the loan principal in line with the drop in home prices in their zip code from the time of purchase (as measured by Case-Shiller). Creditors would get an equity kicker TBD.
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Maxed Out
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The luncheon speaker for the conference was James. D. Scurlock, the director and producer of Maxed Out, which airs this month on Showtime. For those of you who haven’t seen the documentary, it’s a scathing, eye-opening depiction of how the financial services industry (most notably, credit card issuers, debt collection agencies) treats ordinary, hardworking Americans and how people are seduced into debt. He expressed his gratitude to the sponsors for inviting him to a conference where he was sure his talk wouldn’t be the most depressing.
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The Daily Show on Subprime Lending
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On last night’s The Daily Show with Jon Stewart, the hilarious Larry Wilmore explored the racial link to subprime lending. The show bills Wilmore as its "senior black correspondent," and his appearances are always a highlight of the show. Watch the video here and learn the difference between "ghetto judo" and "judo ghetto."
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Rembrandt, the Bankrupt
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Among the list of famous persons who have declared bankruptcy is Rembrandt van Rijn. A book by Washington University’s Paul Crenshaw, Rembrandt’s Bankruptcy, explores the reasons and effects of Rembrandt’s financial troubles. The book was first published in February 2006, but it just came to my attention today. Thus, I have not had a chance to read it, but the comments are open for those who have and want to offer their own thumbnail review.
As with any literary or other of my posts that even remotely have a touch of the fine arts, thanks to Buce over at Underbelly for the tip.