View Full Version : The Ant and the Grasshopper

6th Dec 2007, 15:10
There was an ant and it spent all summer working its bollocks off, to pay for a house so that it could be warm and safe all winter and remain a productive member of society the following year.

The ant did all the due dilligence regarding the terms of the mortgage, ensured his back end ratio was below the 28% and 36% cutoffs, signed on the dotted line and then went back to work so that he could afford to pay for his obligation.

Meanwhile, the Grasshopper saw the ant and realised he too needed a house to stay warm and safe over the winter, so he rushed out and bought the first one he could find. He too needed a mortage, but he didn't care to research the terms, and was happy to sign on the dotted line.

Meanwhile as Winter set in, the ant, who was smart enough to have bought a house he could afford continued to make his payments and generally contribute to society.

But as Winter continued, the grasshopper saw the terms of his mortgage change. This was a surprise to him, even though he would have known this would happen had he been bothered to read the paperwork.

The ant prospered, but the grasshopper soon was unable to meet his obligations and began to realize he was facing the prospect of foreclosure and eviction.

Then the Fairy Godmother, in the shape of a Republican controlled Federal government said "Don't worry little grasshopper, for even though you are in a situation of your own making, we are going to require the big bad mortgage companies to freeze the introductory 'teaser' rate on your subprime mortgage, preventing it from resetting to higher rates for five years.".

The grasshopper was happy with this and bought beer with the money he saved.

The Fairy Godmother looked at the ant and said "Sucker!".

6th Dec 2007, 15:14
All hail the ants for we shall inherit the earth.....:rolleyes:


6th Dec 2007, 15:39
in the shape of a Republican controlled Federal government

?Que? Did I miss something? Are Nancy and Harry not the leaders of their respective Houses of Congress?

6th Dec 2007, 15:41
Your entire analogy is severely flawed.

An ant does not live in an individual abode. In fact, it fares much better when living as part of a much greater community. Call it commantism... :eek:

Grasshoppers don't usually need to survive a cold winter, that is just not their way. :8

But for the sake of this debate, let's call all those sub-prime borrowers grasshoppers. These US grasshoppers currently have a life-span of about 70-80 years, though according to the latest reports concerning obesity, this life-span is in the proces of seriously shortening.

If empathy for grasshoppers, you have not, then at least consider their embryoes (children)...?! Yours sincerely, Yoda.

Two's in
6th Dec 2007, 15:48
I'm confused. I was taught that the Democrats were the left-leaning, welfare teat sucking, lefties? When did this all change?

6th Dec 2007, 16:41
Ah! The ants. Treasured memories.

One savours the Sunday School exam when a co-pupil zapped out the text the minister was on about:

"Go to the ant, thou bugger, consider her ways and be wise".

One was very young at the time, but recalls approval of the good man's sang froid. He took it without flinching.

6th Dec 2007, 18:04
They're not requiring them to do anything, they - and I mean the Bush administration (http://money.cnn.com/2007/12/05/real_estate/bush_freeze.ap/index.htm?postversion=2007120603) - are brokering a deal the lenders will go along with, because the losses they'll incur are a fraction of those they'll incur in a crash. They're simply cutting their losses.

Classic capitalism in action, albiet with a touch of politics involved.

6th Dec 2007, 18:38
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks heís a fool, and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others less fortunate like him are cold and starving.
CBC (Canadian BBC - the leftist breeding ground) shows up to provide live coverage of the shivering grasshopper, with cuts to a video of the ant in his comfortable warm home with a table filled with food. Canadians are stunned that in a country of such wealth, this poor grasshopper is allowed to suffer so while others have plenty.
The NDP (the most left leaning political party), the CAW and the Coalition Against Poverty demonstrate in front of the antís house. The CBC, interrupting an Inuit cultural festival special from Nunavut with breaking news, broadcasts them singing ďWe Shall Overcome.Ē
Svend Robinson (NDP MP) rants in an interview with Pamela Wallin (CBC) that the ant has gotten rich off the backs of grasshoppers, and calls for an immediate tax hike on the ant to make him pay his ďfair share.Ē
In response to polls, the Liberal Government drafts the Economic Equity and Grasshopper Anti-Discrimination Act, retroactive to the beginning of the summer. The antís taxes are reassessed and he is also fined for failing to hire grasshoppers as helpers. Without enough money to pay both the fine and his newly imposed retroactive taxes, his home is confiscated by the government. The ant moves to the US, starts a successful agribiz company.
The CBC later shows the now fat grasshopper finishing up the last of the antís food though Spring is still months away, while the government house he is in, which just happens to be the antís old house, crumbles around him because he hadnít maintained it. Inadequate government funding is blamed, Roy Romanow is appointed to head a commission of enquiry that will cost $10,000,000.
The grasshopper is soon dead of a drug overdose, the Toronto Star (AKA Red Star or Toronto Pravda) blames it on obvious failure of government to address the root causes of despair arising from social inequity. The abandoned house is taken over by a gang of immigrant spiders, praised by the government for enriching Canadaís multicultural diversity, who promptly terrorize the community

6th Dec 2007, 18:53
They're not requiring them to do anything, they - and I mean the Bush administration (http://money.cnn.com/2007/12/05/real_estate/bush_freeze.ap/index.htm?postversion=2007120603) - are brokering a deal the lenders will go along with, because the losses they'll incur are a fraction of those they'll incur in a crash. They're simply cutting they're losses.

Classic capitalism in action, albiet with a touch of politics involved.
if it was such a good deal, and was capitalism in action, then why would they need to government to make them do it?

and where's the capitalism in someone signing a contract, being unable to meet the contractural obligations and then being bailed out by yet another big government welfare project?

What's next? I should buy a high end sports car at $400 a month and then when the $30,000 balloon payment comes due instead of selling it I should expect the government to tell the finance company that I should still be able to pay at the original rate? :yuk:

6th Dec 2007, 19:06
if it was such a good deal, and was capitalism in action, then why would they need to government to make them do it?
and where's the capitalism in someone signing a contract, being unable to meet the contractural obligations and then being bailed out by yet another big government welfare project?

They can't, and aren't, making them do it, they're co-ordinating them doing it. Why government, because they're there and can provide the focus to bring all the interested parties together.

Where's the capitalism? The acceptance of the principle of cutting your losses.

The old story, if you owe the bank $100 you have a problem, if you owe the bank $1 billion, then the bank has a problem....

If you want the socialist solution take the example of Northern Rock and sink over $80 billion of tax-payers money in with no guarantee of getting it back...

6th Dec 2007, 20:29
There, that told you.

Howard Hughes
6th Dec 2007, 20:33
The last three interest rate rises in Australia have been blamed on the sub-prime lending 'crisis' in the US.:confused:

Reading between the lines here it seems that some sort of deal has been brokered? Anyone have any links, I woud like to read a little more and hopefully their won't be anymore interest rate rises for me, not because we can't afford it, but because I don't want to give the bank anymore of my hard earned cash than I have to...;)

Peter Fanelli
6th Dec 2007, 20:49
Aaaaaaaaaaaaaaaargh! it was going well until you tried to throw shit at the republicans for doing this, but the Hilderbeast(Clinton) would have done it as well.


Do you really want a glut of foreclosed homes on the market driving down your property values?

I agree that it sucks to see the idiots get a reprieve, and that's what it is a reprieve not a bailout.

All they are getting is a longer term at their low interest rate. Now when the freeze ends and the interest rate on these loans DOES go up, do you really thing it will go up to the same planned level as before?
Of course not, it will go even higher so the lending institutions will recover what they would have made during the freeze.

End result, the idiots WILL pay unless they get smart and sell these houses while they can during the freeze.

Howard Hughes
6th Dec 2007, 20:56
Thanks for the link Mr Fanelli. What are the chances of this becoming legislation, or is it merely a grab for the Democrat Presidential nomination?

6th Dec 2007, 22:39
Hey just because I think the republicans are the spawn of Satan doesn't meean I'm any fan of the democrats. Quite the contrary in fact. It's just that all the reports I've heard so far, has the Smirking Chimp (Bush) claiming the glory.

Plus it was a gratuitous poke :E

Yes I want a glut of foreclosed homes on the market so that I can buy them at depressed prices, wait it out by renting to all the people who used to own them and then make money off the sales once the market finally rebounds. I don't care if the value of my own home goes down because the one I want to replace it with will have gone down similarly.

Reprieve, bailout, what's the difference? The market is being manipulated and debtors are getting a free pass. I don't care if the lenders go belly up because that's the free market consequence of their bad load decisions.

I mean do you people want capitalism or not?

7th Dec 2007, 00:18
You have to laugh. The Smirking Chimp read out the wrong phone number. He told people with problems to call 1-800-xxx-HOPE and he should have said 1-888-xxx-HOPE

You couldn't make it up, but I wonder who's going to pay the bill for all those toll free calls :}

Buster Hyman
7th Dec 2007, 01:03
...as well as the beer, the Grasshopper bought a can of Mortein & now he's comfotably squatting in a house that belonged to a recently deceased ant.

The End.

7th Dec 2007, 05:50
The current Bush administration's monetary policy is the latest and probably last, given its extent - outgrowth of a Texas-based kleptocracy that took root in the 1960's with Lyndon Johnson's selection as Vice President -- a selection that was required to gain votes by alliance with the Western factions of the party and so to push the relatively inexperienced JF Kennedy into the vote-gathering zone where a presidential win was possible. LBJ and Texas were amply compensated by massive long term Federal investments in the state for the space program infrastructure - NASA. Fderal program expenditures in TX compounded during the Johnson administration after JFK's demise. Similar has happened in the Bush2 administration, but with much more emphasis on use of private corporations to front the graft process.

Papa Bush did his bit to move the program forward during his presidency, but Baby Bush has taken the prize. By losing political control of Federal budget expenditures due to his un-financed (i.e. with taxes) military adventures, George II has completely lost effective political control over US finances in recent years. The only way he could get it back was to turn the Treasury over to the descendants of the same Wall Street Mafia that helped elect Kennedy and Johnson.

With Wall street grads running the Treasury and the Fed, and nobody of any independent standing in a position to interfere, the long-honoured tradition for a small clique on the Eastern Seabord to engage in rapid-fire looting of the entire nation's wealth is once again in play. Their method is to manipulate commerce rules and markets - with advance notice to cronies who invest ahead of the change announcements and benefit magnificently from their inside information.

All the high-sounding talk about helping out poor crippled old black grannies who paid a few hundred K$ more than they should have for a cold water flat is cover for a methodical redistribution of one or more trillions of US$ into the pockets of the very grateful (for a minute or two) Wall-Streeters and their allies, domestic and foreign, who have, in return, bought the junior Bush some respite from complete collapse of his power.

Loose rivets
7th Dec 2007, 06:19
Here in about >1980, there was a huge crash. Shortly after I tried to borrow from a bank, a sum to let me build houses on a patch I owned. The vice president stared across his desk, looking at me as though I was mad.

I put forward a plan that showed that there would be far more equity in the site at any stage than would risk them losing their investment. Nothing. Not even goodbye.

Five Texas banks had failed and fantastic houses stood on their lake-side properties half finished. Some of the radio controlled gates hung half closed with the wires sprouting out of the junctions. Deer walked the gardens in perfect peace. It had to be seen to be believed.

They are determined that it will not happen again, and one of the ways that there are doing this is to charge kids have to pay a stiff 'insurance' to the mortgage company until they have paid off 20%

Other ways are to get non payers out more quickly. Pain for the young families, but the banks are determined not to be hit again, so any plan that will just reduce their income rather than see it stop will be the way they go.

7th Dec 2007, 07:52
Here in about >1980, there was a huge crash. Shortly after I tried to borrow from a bank, a sum to let me build houses on a patch I owned. The vice president stared across his desk, looking at me as though I was mad.

Most of that problem can be laid at the feet of W. Michael Blumenthal, President Carter's first Treasury Secretary. With The global economy gyrating over oil and gold and dollar issues, plus the debt echo of the Vietnam War and the disco-fed gyrations of twenty-something boomers , WMB took a "what, me worry?" approach to US monetary policy for most of his two year tenure. Result was similar to leaving a fresh fish in the sun for days. His successor at Treasury, William Miller, tried to tighten money some, but Carter was a populist and didn't consider fiscal constraint a high priority. Meanwhile, street-level inflation had gone from 3 or 4 percent at begin of the 70's to 10%-15% by the end. Collectibles were in style, people wanted to hold anything but money, real-estate prices in many areas had doubled in a few years, even air travel discount coupons were being monetised in lieu of the dwindling buck. Paul Volker became Federal Reserve Chairman in August '80 and shortly after the Fed commenced to ramp its own rates (http://www.federalreserve.gov/releases/h15/data/Monthly/H15_FF_O.txt) upward, far beyond historical limits.

When Don Regan took over Treasury in '81 at the start of the Reagan Presidency (confusing names, wot?) He quickly took the lid off interest rates and let them rise into the stratosphere. Eighteen percent asking rate on a mortgage loan was not uncommon. Can remember this well, because I bought a house that summer .. and wanted to sell another to pay for it, but the liquidity was totally gone from the US real-estate markets.... because no financing was available on sober terms to eager buyers & willing sellers. The way any property deals at all were done was by artistic measures.. where the parties worked out something between themselves without including the usual intermediaries. (In my case, buying, it was a cash down payment, interest only loan for 5 years at around 10%, to be followed by a balloon payment.) Never did get around to selling the other house.... it was hopeless at the time, so one became a reluctant long-distance landlord, just as many others are now doing. Not for the faint of heart.

Bottom of that mess seemed to be the winter of '83. One remembers visiting a small town where half the shops on the half-mile shopping zone of an old-style Main street had closed up and gone under. Very quiet it was, and quite scary with no end in sight.

Track Coastal
7th Dec 2007, 16:34
The Grasshopper best not buy 15 cases of Bud and five 200s of Winston lites yet...


8th Dec 2007, 21:23
Another interesting Texas connection in the ups and downs of US financial markets is the long-running tale of the Hunt Brothers, who collared a substantial portion of the market inventory of silver and nearly pulled off a spectacularly profitable commodity squeeze - causing quite a bit of economic distruption along the way. The tale of their adventure has many parallels to the current global oil price situation.

Here are two versions of their colorful story:



NNOTE: the pprune forum software would not allow entry of the actual link address as an actual URL or a comment!!!!!! (for reasons unknown) -- try cut an paste or Google ( Hunt Brothers or 1980-silver-corner ) if you want to access it. Am wondering if this is part of the NEW Pprune makeover?

Loose rivets
8th Dec 2007, 23:41
I remember that happening. You couldn't make it up.

"I just wanted to make some money." :rolleyes: Sheeeeeeesh!

Track Coastal
17th Dec 2007, 06:40
"Mommy, mommy look at the size of that wave coming..."

Hmmmm, cutting interest rates to stave off the sub-prime fiasco, But, one increases interest rates to control inflation taking off. Which way does "Blackhawk" Bernanke go? Stop rampant inflation or save the sub-prime sector?




17th Dec 2007, 08:14
"coffin corner" meets econ 303

Track Coastal
17th Dec 2007, 10:27
It is going to be just plain ugly IMHO. Damned is he ("Blackhawk") does and damned if he doesn't.

Dubya's going to be remenbered for lots of things - none good IMHO.