Twisted Spinster

Insofar as I can understand it, pretty much what this guy says. On a side note, I take the opportunity to point out in the comments that I still can’t understand the whole Enron thing. (Please don’t try to explain it to me. I’ve read stuff about it, had other people try to explain it — it seems to be something to do with energy, but Enron didn’t actually have power companies or nuclear plants or anything, they just seemed to have some sort of “thing” with energy that for a while people were willing to give them lots of money for. Well, I own seven manual typewriters; everyone has a ridiculous hobby they want to throw money at, I guess.)

I can say a couple of things about the mortgage end and the housing end, though. I’ve already mentioned I worked for a mortgage company for fourteen years, and thus this sort of thing is no surprise to me. And I was just a flunky, not a loan officer or anything. You just learn stuff about a business you work for for a long time, unless you’re really stupid (or the subject is Enron). After that, I worked for four years for a homebuilding company, one of the big ones. Like all the rest of them they made all sorts of stupid decisions based on predictions even I, a keyboard puncher who had always rented, could tell were insanely over-optimistic. When the axe came down on most of us I was so not surprised.

What I don’t understand, and never will, is how the big ones in charge who actually make these decisions (lend money to everyone! build a zillion inventory homes despite the ascendant anti-cookie-cutter-home fashion that anyone with HGTV on their cable lineup knew about! Etc.) came to their decisions. It sounds more like some sort of lemming-like mass hysteria gripped the industry. How embarrassing if true.