5 ms·

This is what happens when you lend money to poor people

27 points by dpapathanasiou 19y ago

deleted 19y ago
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deleted 19y ago
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rokhayakebe 19y ago
Clearly this guy is outside his mind. You might have a bad experience with a few white, black, poor, or rich people, but this certainly does not mean they are all the same. I have experienced similar situations several where people ask me stupid fucking questions or make ignorant comments just because of where I am from. I usually do not respond to such low level of maturity and knowledge and the few times I do I make sure they leave the room felling way less intellectual than I am (although I am not so smart, maybe a little bit). Sorry you got screwed by poor people, but not all poor people are the same. There are several stories we can tell about rich people screwing other rich people, in fct I am sure there are more of those cases than his.
- Alex3917 19y ago
  If you had read more than the first two paragraphs you would have realized it was satire.
  - andreyf 19y ago
    I read the entire thing and I had no idea. I've a habit of leading people on to see how absurd of a thing I can get them to agree to. Like go to "conservative" club meetings (in college) and see how many people you can convince that Arabs shouldn't be considered human. Or why people that can't afford health care obviously don't deserve it, or how they ought to be forbidden to reproduce, etc. It's scary.
    - deleted 19y ago
      [deleted]
    - davidw 19y ago
      The key piece of evidence that it's satire: "Michael Lewis in Berkeley, California" They would crucify him there if he really meant what he wrote;-) I didn't find it particularly entertaining, though.
rms 19y ago
...no. What about kiva.org?
trekker7 19y ago
I really hope this is a joke... even then it isn't funny.
jsnx 19y ago
It is precisely because there is risk involved in giving a loan that there is any profit to be made. If the legal system actively enforced repayment through debtors' prison and the like, there would be no basis for interest.
- neilc 19y ago
  Well, there would still be a basis for some interest, because the lender could make more money on their capital by using it for another purpose, such as buying T-bills or some other security with essentially zero risk. Intuitively I'd think that part of the interest charged on a loan is literally just to "rent the money", preventing it from being used for another purpose; the rest is to account for the possibility that the loan might not be repaid.
- deleted 19y ago
  [deleted]
cmars232 19y ago
Regarding the subprime fiasco, it should read "This is what happens when you build an entire industry based on tricking people into borrowing more than they can afford!"
- gwenhwyfaer 19y ago
  Or "this is what happens when you lend money to people who can't persuade anyone to lend them money"...
gojomo 19y ago
Frickin' hilarious. Through thought #1, it's just a bit wry and tongue-in-cheek, but by the middle of thought #2 -- "I trusted these people to get their teams of lawyers to vet anything before they signed it" -- it's high satire. I laughed out loud at its continuation: "Turns out, if you're poor, you don't need to pay lawyers. You don't like the deal you just wave your hands in the air and moan about how poor you are. Then you default."
henning 19y ago
Us poor people aren't too dumb or disorganized to burn the Hamptons to the ground if pushed too far. Note: this is the same guy who wrote Moneyball, which is an interesting book about applying a bit of reason to an insane market (baseball recruiting).
deleted 19y ago
[deleted]
jey 19y ago
> By poor, I mean anyone who the SEC wouldn't allow to invest in my hedge fund This dipshit classifies everyone who doesn't qualify to be an Accredited investor as poor? Wow. He also thinks its the poor people's fault for taking sweet deals that were offered to them? If you look at it from an economic perspective, all they had to lose was the property on which they took out the loan and a bad credit rating, but their credit rating sucked already anyway. (Granted, this may have emotional consequences as they foreclose and have to move out, but that doesn't really impact the economics of it.) In contrast, the lenders are losing their investment! Isn't it the responsibility of the lenders to invest in, uhm, sensible investments? OK, I should stop bitching about this troll's obvious flamebait. [EDIT: after reading the rest of the piece, I see that this is satire. he sure got my blood boiling as I read it.]
- cellis 19y ago
  You do know who the writer is, dont you?
yters 19y ago
I like what they do with microfinancing in india. Give someone a little bit of money to start a simple street business, i.e. food vendor, and only give him a bit more if needed to help his business run. The real problem is throwing money at problems without much thought. We westerners have done this way too much.
- gwenhwyfaer 19y ago
  Credit unions are useful too, for similar reasons. There's a difference between borrowing a little money to lever yourself out of poverty, and borrowing an obscene amount of money so you can buy that dream house your salary won't stretch to half of because You're Worth It.
brlewis 19y ago
In college sometimes my housemates would buy this tabloid called the "Weekly World News" that always had ridiculous stories. One of the regular features was editorials by "Ed Anger" that were obviously trolling for angry letters to the editor. This looks just like an Ed Anger piece.
deleted 19y ago
[deleted]
mynameishere 19y ago
Weak satire. Really, though. If a credit-unworthy person can't pay back a loan, and a lender takes a bath on it, well I'm fine with that. Let the one declare bankruptcy. Let the other write it off his taxes. Fine. There's just one thing I don't want to do: Have money stolen out of my pocket to ensure that either or both of the above idiots are protected from their own bad wagers.
sethg 19y ago
The comments here by people who don't recognize TFA as satire are funnier than TFA itself.
pg 19y ago
So far this thread is setting the record for deleted comments, as people who responded angrily realize it was a parody. Perhaps the reason people reacted so violently is that they can imagine some reasonable arguments that sound like these. I.e. this is a case of people being made maddest by statements they worry might be true.
- tyler 19y ago
  To the contrary, what angered me ( yeah yeah, I also didn't realize it was a parody ) was the over generalization and the possibility that someone actually thinks like this. That being said, I could see the statements being true to an extent. Probably even a greater extent that I'd like to admit. Its just the generalization that gets me... I think you'd get much the same reaction from people if you replaced "the poor" with, "the mexicans", or "the blacks", or "the rednecks".
- nandan 19y ago
  To be honest, I somehow missed the possibility that it was a parody, as well. Which brings me to something a little 'meta' as far as this goes: What are some good heuristics / algorithms to determine if something is a parody? :)
  - jey 19y ago
    With the current political climate, I don't think such a litmus test actually exists.
    - byrneseyeview 19y ago
      "When Henry Kissinger won the Nobel Peace Prize in 1973, the distinguished musical satirist Tom Lehrer decided that he could no longer perform. "It was at that moment that satire died," says Lehrer, "There was nothing more to say after that."" http://www.bbc.co.uk/bbcfour/documentaries/features/feature_kissinger_profile.shtml http://www.bbc.co.uk/bbcfour/documentaries/features/feature_...
  - gojomo 19y ago
Agathos 19y ago
The irony is that "the rich," or at least those who own mortgage-backed bonds, probably do want a bailout for "the poor." They get the money in the end, and a lot more of it than they can recover from foreclosures. If somebody owed me a lot of money and had no prospect of paying it, I'd love to see a third party step in and pay with no strings attached.

deleted 19y ago

[deleted]

deleted 19y ago

[deleted]

rokhayakebe 19y ago

Clearly this guy is outside his mind. You might have a bad experience with a few white, black, poor, or rich people, but this certainly does not mean they are all the same. I have experienced similar situations several where people ask me stupid fucking questions or make ignorant comments just because of where I am from. I usually do not respond to such low level of maturity and knowledge and the few times I do I make sure they leave the room felling way less intellectual than I am (although I am not so smart, maybe a little bit). Sorry you got screwed by poor people, but not all poor people are the same. There are several stories we can tell about rich people screwing other rich people, in fct I am sure there are more of those cases than his.

Alex3917 19y ago
If you had read more than the first two paragraphs you would have realized it was satire.
- andreyf 19y ago
  I read the entire thing and I had no idea. I've a habit of leading people on to see how absurd of a thing I can get them to agree to. Like go to "conservative" club meetings (in college) and see how many people you can convince that Arabs shouldn't be considered human. Or why people that can't afford health care obviously don't deserve it, or how they ought to be forbidden to reproduce, etc. It's scary.
  - deleted 19y ago
    [deleted]
  - davidw 19y ago
    The key piece of evidence that it's satire: "Michael Lewis in Berkeley, California" They would crucify him there if he really meant what he wrote;-) I didn't find it particularly entertaining, though.

rms 19y ago

...no. What about kiva.org?

trekker7 19y ago

I really hope this is a joke... even then it isn't funny.

jsnx 19y ago

It is precisely because there is risk involved in giving a loan that there is any profit to be made. If the legal system actively enforced repayment through debtors' prison and the like, there would be no basis for interest.

neilc 19y ago
Well, there would still be a basis for some interest, because the lender could make more money on their capital by using it for another purpose, such as buying T-bills or some other security with essentially zero risk. Intuitively I'd think that part of the interest charged on a loan is literally just to "rent the money", preventing it from being used for another purpose; the rest is to account for the possibility that the loan might not be repaid.
deleted 19y ago
[deleted]

cmars232 19y ago

Regarding the subprime fiasco, it should read "This is what happens when you build an entire industry based on tricking people into borrowing more than they can afford!"

gwenhwyfaer 19y ago
Or "this is what happens when you lend money to people who can't persuade anyone to lend them money"...

gojomo 19y ago

Frickin' hilarious. Through thought #1, it's just a bit wry and tongue-in-cheek, but by the middle of thought #2 -- "I trusted these people to get their teams of lawyers to vet anything before they signed it" -- it's high satire. I laughed out loud at its continuation: "Turns out, if you're poor, you don't need to pay lawyers. You don't like the deal you just wave your hands in the air and moan about how poor you are. Then you default."

henning 19y ago

Us poor people aren't too dumb or disorganized to burn the Hamptons to the ground if pushed too far. Note: this is the same guy who wrote Moneyball, which is an interesting book about applying a bit of reason to an insane market (baseball recruiting).

deleted 19y ago

[deleted]

jey 19y ago

> By poor, I mean anyone who the SEC wouldn't allow to invest in my hedge fund This dipshit classifies everyone who doesn't qualify to be an Accredited investor as poor? Wow. He also thinks its the poor people's fault for taking sweet deals that were offered to them? If you look at it from an economic perspective, all they had to lose was the property on which they took out the loan and a bad credit rating, but their credit rating sucked already anyway. (Granted, this may have emotional consequences as they foreclose and have to move out, but that doesn't really impact the economics of it.) In contrast, the lenders are losing their investment! Isn't it the responsibility of the lenders to invest in, uhm, sensible investments? OK, I should stop bitching about this troll's obvious flamebait. [EDIT: after reading the rest of the piece, I see that this is satire. he sure got my blood boiling as I read it.]

cellis 19y ago
You do know who the writer is, dont you?

yters 19y ago

I like what they do with microfinancing in india. Give someone a little bit of money to start a simple street business, i.e. food vendor, and only give him a bit more if needed to help his business run. The real problem is throwing money at problems without much thought. We westerners have done this way too much.

gwenhwyfaer 19y ago
Credit unions are useful too, for similar reasons. There's a difference between borrowing a little money to lever yourself out of poverty, and borrowing an obscene amount of money so you can buy that dream house your salary won't stretch to half of because You're Worth It.

brlewis 19y ago

In college sometimes my housemates would buy this tabloid called the "Weekly World News" that always had ridiculous stories. One of the regular features was editorials by "Ed Anger" that were obviously trolling for angry letters to the editor. This looks just like an Ed Anger piece.

deleted 19y ago

[deleted]

mynameishere 19y ago

Weak satire. Really, though. If a credit-unworthy person can't pay back a loan, and a lender takes a bath on it, well I'm fine with that. Let the one declare bankruptcy. Let the other write it off his taxes. Fine. There's just one thing I don't want to do: Have money stolen out of my pocket to ensure that either or both of the above idiots are protected from their own bad wagers.

sethg 19y ago

The comments here by people who don't recognize TFA as satire are funnier than TFA itself.

pg 19y ago

So far this thread is setting the record for deleted comments, as people who responded angrily realize it was a parody. Perhaps the reason people reacted so violently is that they can imagine some reasonable arguments that sound like these. I.e. this is a case of people being made maddest by statements they worry might be true.

tyler 19y ago
To the contrary, what angered me ( yeah yeah, I also didn't realize it was a parody ) was the over generalization and the possibility that someone actually thinks like this. That being said, I could see the statements being true to an extent. Probably even a greater extent that I'd like to admit. Its just the generalization that gets me... I think you'd get much the same reaction from people if you replaced "the poor" with, "the mexicans", or "the blacks", or "the rednecks".
nandan 19y ago
To be honest, I somehow missed the possibility that it was a parody, as well. Which brings me to something a little 'meta' as far as this goes: What are some good heuristics / algorithms to determine if something is a parody? :)
- jey 19y ago
  With the current political climate, I don't think such a litmus test actually exists.
  - byrneseyeview 19y ago
    "When Henry Kissinger won the Nobel Peace Prize in 1973, the distinguished musical satirist Tom Lehrer decided that he could no longer perform. "It was at that moment that satire died," says Lehrer, "There was nothing more to say after that."" http://www.bbc.co.uk/bbcfour/documentaries/features/feature_kissinger_profile.shtml http://www.bbc.co.uk/bbcfour/documentaries/features/feature_...
- gojomo 19y ago

Agathos 19y ago

The irony is that "the rich," or at least those who own mortgage-backed bonds, probably do want a bailout for "the poor." They get the money in the end, and a lot more of it than they can recover from foreclosures. If somebody owed me a lot of money and had no prospect of paying it, I'd love to see a third party step in and pay with no strings attached.