rant · moment 10 of 14
Matt Taibbi, the Mortgage Crisis, and Adjustable Rate Mortgages
from The Montauk Project · #95
Audio-only archive episode — no video to seek.
11 minDrawing on his own past as a mortgage salesman, Tim pushes back on Matt Taibbi's framing of the 2008 financial crisis as pure racialized predation, explaining how adjustable-rate mortgages, Alan Greenspan's rate cuts, FHA loans, and universal belief in refinancing before rates adjusted set up the collapse, while acknowledging real racial harm and fraud existed.
- 35:43Alan Greenspan created the entire mortgage market by slashing rates, and then Wall Street did what Wall Street does.
- 36:05Everybody wanted adjustable rate mortgages because they were cheaper, not because they were being tricked.
- 36:36At every closing, a closing attorney explained the terms to you and asked if you understood the rate lock period.
- 37:09Nobody predicted a worldwide financial crisis would drop house values 50 percent—if they had, the rich people would have made the Big Short bet.
- 38:11People weren't choosing between a fixed seven percent rate and an adjustable five-point-five percent; the gap was huge.
- 39:03The Taibbi narrative says rich people systematically suck money from the middle class, but the actual story is more complex.
- 40:01Tim took an adjustable rate mortgage because he believed he'd refinance into a fixed rate and sell the house successfully.
- 41:04If fixed rates had been given to the majority of borrowers, they would have been fine—adjustable rates are what destroyed people.
- 42:40Rich people disproportionately benefit from bubbles and insulate themselves from busts, and they lobbied for these things to be allowed.
- 45:03A lot of the mortgage crisis came from speculation—people buying second and third homes, not poor people being duped.
- 45:41If something seems too easy to make money on, that should be a red flag that something corrupt is happening.
- 45:52People with no qualms about corruption were willing to flip multiple houses, but Tim recognized the scheme as too simple to work.
Matt Taibbimortgage crisisAlan Greenspanadjustable rate mortgagesBethany McLeanMoody'sGoldman SachsChristian BaleIceland