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> | Mark, please find below a few comments in response. I'm a bit short on time at the moment (perhaps that was your concern as well?), but I will take another shot at this after the 10th.
-- DanKarmel - 30 Apr 2010 |
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Altercasting The Homeowner |
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Introduce Leff and explain the creation of value as being necessary to the deal |
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- Borrowers bought into this idea, but we don't care about this
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- Borrowers bought into this idea, but we don't care about this Buying into a mistaken, or at least incomplete, understanding of what happened discourages a more accurate understanding.
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- Some smart investors bought into this idea as well, but they're so smart, how can we explain this?
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< | Oh simply they didn't bear the risks. |
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> | Oh simply they didn't bear the risks. Are you suggesting that this is banal and not worth saying? Or that it's unsubstantiated? |
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< | Although Leff isn't useful to describe the deal, he's useful to describe what happened after the deal (seems to contradict what you said in the first paragraph). Also you're describing what happened after the deal from the perspective of the borrower, who beforehand you weren't interested in. |
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> | Although Leff isn't useful to describe the deal, he's useful to describe what happened after the deal (seems to contradict what you said in the first paragraph). Why is it a contradiction to explore an idea and then decide against it? Also you're describing what happened after the deal from the perspective of the borrower, who beforehand you weren't interested in. Why is it that a coherent essay can’t address the viewpoint of more than one party? The investors' perspectives should inform those of the borrowers'. Not to mention that I believe the first paragraph was relevant to the borrower’s perspective. |
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- Borrowers are altercast as homeowners, increasing their unwillingness to walk away from the deal
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- Borrowers, while not thinking they were getting a gift, could (or should?) have been aware that it was not really a good deal for them. (is this your conclusion?)
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- Borrowers, while not thinking they were getting a gift, could (or should?) have been aware that it was not really a good deal for them. (is this your conclusion?) No, that's not my conclusion. My conclusion is that, although borrowers are aware that they were making an exchange, as opposed to getting a gift, they are mistaken as to the exact nature of that exchange. If they understand that the mortgage crisis is a result of a misalignment of incentives and risk, then perhaps they can look at their own contracts, which are allocations of risk, and more accurately understand what part of that risk they bargained for, if any.
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So my take on what you said is that I don't know really what you're saying. Your essay is scattered and doesn't really finish its thoughts. I don't understand what you are trying to say. My suggestion is that you pick a thread of thought in your essay and develop it more thoroughly. Your essay needs a big-time rewrite though. Rewrite it when you get the time, and I'll do a more substantial edit. I think at this point your thoughts are too incomplete for me to really add anything of value. |