Well, crap

So, we just got off the phone with Mrs. Drang's dad, concerned about his money "what with Washington Mutual Bank being bought and all."

OK, so we knew our bank was on the market, but I didn't realize it was so... shaky. (Bloomberg: "JPMorgan Buys WaMu's Deposits as Thrift Is Seized")

What I had not realized was that WaMu "was the second-biggest provider of option" Adjustable Rate Mortgages

behind Wachovia Corp., with $54 billion held in its portfolio in the first quarter, according to Inside Mortgage Finance. Of the $230 billion in loans secured by real estate at the end of the second quarter, $16.9 billion were subprime mortgages. WaMu, which ranked sixth among U.S. mortgage companies last year, was the 11th-biggest subprime lender in 2006, according to Inside Mortgage Finance.

If I'd realized that they were that big in ARMs--which led directly to the current economic mess--I'd've been pressuring Mrs. Drang that we needed to find a new bank months ago.

Tamara posted a quote by Larry* Jerry Pournelle yesterday pointing out that this has been building for years. I recall being assured when I was growing up (and this may be the first time I've used the term publicly) that there would never be another Great Depression, because of all the safeguards now built in. Sardonic sayings regarding the trouble with fool-proof systems comes to mind...

One thing that has me almost amused is the way that so many in the media are trying to blame "De-Regulating Republicans" for the current mess; just who was it leading the charge for affordable housing and easy-to-get unsecured loans, so even the poor could buy their own house?

And, yes, I know Republicans were also advocating home ownership. Still, the attempt to paint Democrats as fiscal conservatives is, well, piquant, to say the least...

Meanwhile, Greenspan got panned a few weeks ago for suggesting that, if someone took out a mortgage they could not pay, they deserved whatever happened to them, and any business that had such a poor business model that they covered such loans, ditto. Thought he was going to get lynched. In the long run, he is right; in the short term, even if the government did take a "Devil take the hindmost" attitude that the rest of us would still suffer.

I dunno. I don't think this is the end of The Republic, let alone of civilization. But I have a feeling that we will not be seeing the prosperous times of the 70s through the 90s, the sheer materialistic orgy of owning the latest and greatest, everybody expecting to own TVs and VCRs and DVDs cable and satellite and multiple computers and a car for every family member over the age of 16 and ipods and MP3s and microwaves and convection ovens and pills for everything (oh, wait, I forgot, socialized medicine) and personal watercraft and dirt bikes and ATVs and quads and skis and snowboards and...

Not for a while.

EDIT TO ADD: Frank R. James has an excellent run-down of the run-up to the current mess.

*Inside joke for trufans...