May 19, 2009

"I had the thought last week that this entire thing is charade designed to sell a book."

Yeah, my thought too. That's why I didn't blog about "My Personal Credit Crisis" — by Edmund L. Andrews — when I read it last week. And it's a long article. It's very rare that I go all the way through a long article and refrain from blogging it. Normally, I taste things, and the decision to consume them in full is automatically a decision to blog them. But I felt aggressively hostile to giving Andrews any attention. It was a readable article. I'll give him that. But I wanted to smack him.

AND: Neo-Neocon wants to smack him too. In the comments, Beth said...
I read this with disbelief. This guy, after child support, was bringing home less than $3k a month, and his fiancee at the time had no job at all, and it made sense to borrow HALF A MILLION BUCKS???? He keeps saying how easy it was to borrow it, but until months after the bills actually start coming in, he never thought about how hard it would be to pay back. That's the kind of thinking I've seen in friends with manic depression, in a manic phase.
It seemed to me that the guy did whatever he could get away with. And now he writes a confessional memoir about his shamelessness with the NYT as his springboard.

24 comments:

former law student said...

The Andrews article certainly showed the economic downsides of middle-aged romance.

Don't rush to spend money you don't have, was the moral I drew from it.

EDH said...

The other reader comment, beside the "charade" comment, that struck me was:

This is a guy who wanted what he wanted, knew he couldn't afford it, but found somebody else to pay for it for him. Now he's trying to cash in on that, and find ways to feel righteous in the process. It looks like the family still hasn't adjusted their lifestyle, and, worse, that they haven't even used the money they've gotten for the book to pay up what they owe. Talk about stealing with a good conscience! The ultimate entitlement mentality.

Joe said...

I heard an interview with Andrews and quickly concluded that Andrews isn't being entirely truthful about his experience. To be more blunt, once I started connecting the dots, Andrews became a total jerk. Then I read up more on him and my impression turned out to be correct.

This guy was living so far beyond his means, he makes my oldest daughter look frugal.

Andrews repeated excuse that the banks someone pulled a fast one on him is about as disingenuous as you can get. Did it ever occur to him to buy a less expensive place? Or to rent? Or to cut way back on all his other expenses? How about having his mistress get a job?

(And never mind the fact that he walked out on his first marriage and shacked up with his mistress. They guy is a total asshole and deserves what happens to him. Unfortunately his children and the children of his mistress don't deserve that.)

prairie wind said...

They bought the house in 2004 and in October 2006, he observed:
"Our stately little house looked increasingly trashy: peeling paint and broken screens on the front windows, crumbling concrete on the front stoop, a lawn that was mostly crabgrass. The furniture that Patty salvaged from her first marriage was falling apart. The cotton slipcovers on the sofa and armchair were in shreds. The frosted-crystal shade on a beloved Italian floor lamp was cracked. The dog had gnawed the leg on her Biedermeier chair."

All that damage in 2 years? That's some hard living. Just the fact that he pulls out the "shredded" cotton slipcovers to show us how bad things had gotten shows exactly why he dug himself into that hole. Poor baby. I'll bet he's missing some buttons on his expensive shirts, too.

Beth said...

I read this with disbelief. This guy, after child support, was bringing home less than $3k a month, and his fiancee at the time had no job at all, and it made sense to borrow HALF A MILLION BUCKS???? He keeps saying how easy it was to borrow it, but until months after the bills actually start coming in, he never thought about how hard it would be to pay back. That's the kind of thinking I've seen in friends with manic depression, in a manic phase.

We are cautiously considering buying a home right now. Neither of us has ever done so, but the market is very much in our favor, for the first time in many years, in our area. But the key word is caution.

When I went to the mortgage broker, she first determined a figure based on our combined incomes. Then, she used what we currently pay in rent, added $200 a month to that, and came to a smaller overall amount and recommended we aim for that, rather than the higher amount our current incomes would allow. If there were more like her in the industry, we'd be in better shape.

TosaGuy said...

'Stately' is not the word I would have used to describe this 1960s generic pile of bricks, but preening boomer idiots like him probably don't like calling such a shack a starter home.

I dated a woman in Bethesa, Md. In 2004, she bought a 900 sq ft, 1BR condo for $250K using an ARM. That was the first red flag in the relationship.

traditionalguy said...

The seller of the house and the Loan Broker made the money that the Bail Out will repay. Watch the pea under the various shells. This poor guy was a straw man they used in the great mortgage bubble of 2000 to 2006, a/k/a a pump and dump designed to catch the final overseas investors. The bail out is to keep the overseas investors from stopping all investing.

Henry said...

Maybe Andrews can get James Frey's agent.

PatCA said...

When I learn the NYT pays this guy over $120K per year to write about economics, I understand why they're going out of business. The one smart thing he did was cash out his NYT stock before it totally tanked.

An appearance on Oprah will surely be next.

Mom said...

"When I learn the NYT pays this guy over $120K per year to write about economics, I understand why they're going out of business."

PatCA wins the thread!

essaybee said...

He doesn't even have the decency to be ashamed of himself.

Rabel said...

Since this reporter chose to take his private life public for personal gain:

Per Montgomery County tax records and the Washington Post, the house is at 323 St. Lawrence Drive in Silver Spring, Md. It's 1,500 sq. ft. and was built in 1946. It's in a stable neighborhood of similarly priced homes. Of course their could be another Edmund L. Andrews who paid exactly $460,000 for an identical house in Silver Spring in 2004.

He paid far too much for the house in 2004 at $460,000 and it only appreciated 10 percent in the boom years of 2005 and 2006. Lucky for him it has held its value fairly well during the bust that followed.

As a bonus, the new wife's name is not on the tax records and so not on the mortgage.

Judging from his story, he's headed for a bankruptcy to be followed shortly by another divorce.

Something poetic about fools, love and money should be added here, but it's not my thing.

essaybee said...

Wait a minute. This guy is paid $120K a year? That's 10K a month, yet he claims to take home only 3k per month after child support.

His child support is $700 a month. He has a mortgage and dependents. There's no way he is paying $6300 a month is taxes.

Balfegor said...

His child support is $700 a month. He has a mortgage and dependents. There's no way he is paying $6300 a month is taxes.

He is apparently paying something like $4,000 a month in alimony.

Pogo said...

The funniest part of the story is that the chump left holding the bag is everyone else, the average joes and janes who did the right thing.

Last night I saw a commercial for a development offering low-down-payment houses "even if you have bad credit or no credit". That's your tax dollars, replaying the Edmund L. Andrews scenario.

A gummint Ponzi scheme; well somebody's laughing.

essaybee said...

Ah, that explains it. thanks Balfegor.

Beth said...

The $700 child support figure is for his second wife's ex-husband, and was figured into this guy's income.

$120,000 a year salary does not add up to buying a $500,000 house.

Big Mike said...

Succinctly put, Beth.

Now you're starting to sound like me.

Not that there's anything wrong with that. ;-)

Jennifer said...

I heard an interview with him on NPR the other day and could not get over how childish he was. He kept saying that it wasn't that he thought borrowing a half million was a good idea but blah blah something about being in love.

Because you just can't be in love without spending well beyond your means.

PatCA said...

Why thanks, Mom!

Henry said...

I sure hope the "I'm a bankrupt asshole" genre of memoir writing has a short run.

former law student said...

$120,000 a year salary does not add up to buying a $500,000 house.

The house they bought is very affordable at $460K, provided they didn't have any big payments to make. His main problem was that he was sending $4K a month to support his ex and his kids.

From mortgage-calc.com:

See if Your Income is Sufficient to Qualify
Desired Mortgage for New Home $394K (90%)
Mortgage Length
Years 30
Interest % 5
Annual Tax $5K
Total Monthly Payments in Non-Mortgage Debt (i.e. car, student loans, credit cards, etc). -0-

Summary
Monthly Principal + Interest $2155.08
Total Housing Payment (tax & insurance included) $2531.74
Required Salary $108,503.31
Your salary must meet the following two conditions:
Your gross (pre-taxes) monthly salary must be greater than 28% of the sum of the monthly mortgage and monthly tax payments.
Your gross (pre-taxes) monthly salary must be greater than 35% of the sum of the monthly mortgage, monthly tax and other monthly debt payments.

former law student said...

Andrews was really living off the equivalent of $48K before taxes. He could have bought a $180K condo on that income, assuming he was fairly frugal.

Florida said...

I disagree with most of the commenters.

This article was like most NY Times articles ... you have to read between the lines to figure out what the story is really about.

What the story is really about isn't money, or loans, or financing.

It's about what a gross barely literate NY Times columnist with a second rate financial education will do to try to keep a girl who shows interest.

He'll do anything. Especially after having to go all the way to Argentine to find a girl too stupid to Google her date and figure out he has no money.

Most NY Times' newspaper reporters are morons. Else, they wouldn't accept $100K to live in NY City, where you need a minimum of $500K/yr to live a decent existence owing to the amount of taxes paid and the cost of housing.

Newspaper reporters elsewhere in the country are so stupid they actually ASPIRE to this poverty - unable to understand "cost of living.

NY Times reporters are too stupid to be able to understand the ratio between borrow and spend. They spend all day defending Obama borrowing and spending with no way to pay it back and they think that's the way life works.

They're morons.