Arts & Culture

The Ira Glass Infatuation Post/This American Life Review: Toxie

It’s the kind of quality raunch session that is a hot dream, but would fizzle out quickly/ make you a ruined woman if pursued too often: that’s a pretty succinct synopsis of this week’s Life. In the words of one … Read More

By / November 10, 2010
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It’s the kind of quality raunch session that is a hot dream, but would fizzle out quickly/ make you a ruined woman if pursued too often: that’s a pretty succinct synopsis of this week’s Life. In the words of one tweeting TAL-fan, “don’t think This American Life understands I’ve always loved them most for NOT being abt politics, financial distress, x current problem. :(”  Cheer up doll, Ira knows what’s good for you in the long run, joining Planet Money in giving you the behind the scenes of the usually taboo topic of toxic assets.

In a marathon of acts “serialized like a Dickens novel,” David Kestenbaum and Chana Joffe-Walt throw you around the previously anonymous world of the source of the economy’s demise by personally making a purchase of the sludge.

“Mortgage-backed security, basically a bunch of Wallstreet guys grabbed up thousands of mortgages from all over the country, threw them in a pile, and sold off pieces to investors. So big pension funds bought them, insurance funds bought them, banks bought them.”

“And you guys bought them,” said Ira of their new cash baby dubbed Toxie. Like archaeologists, as described by foxtrot Ira, the team tracked themes on various levels common to the crisis, making it a true slice of American life.

Act 1: Hey man, half a cent on the bond.

Step 1: Buy the goods. Your tour guides trudged south through the swamp that is toxic assets to an unmarked building in Kansas. Tres mafia, appropriately. There, they were able to “rifle through the bargain basement” of bonds with lawyers and investors who aided in their purchase of a severely clearance-priced-to-sell mortgages on 2000 homes from around the country. No one really knows what they’re worth: “We’re basically buying garbage and it is taking two days to do.” #fml.

Act 2: First of all, he doesn’t look like a deadbeat.

Ira introduces the act: “An old man chooses between logic and morals. Logic wins.” Nothing gets a girl going like a boo with his priorities straight. Toxie is an erratic little number, and with 1/3 of the mortgages in its DNA being strategic defaults, David and Chana go on tour to speak face-to-face to the homeowners. They come across the first of several Floridians, Sarasota’s Richard Koenig, whose mortgage costs more than his house. And at 82, after weighing incentives to keep a perfect credit score versus shelling out earnings to a nameless leech (“a bank is a blank face, it’s a nonliving creature”), his logic is sound. Yet, the team’s approach to their relationship with Koenig comically refutes that one, speaking as if he owed them money personally. “It’s not illegal to breach a contract, and that’s what this is…a business decision.”

Act 3: These weren’t geniuses

Back to the phallic peninsula that screwed the rest of the world, “In Florida, mortgage fraud appears to have been widespread and organized.” Countering strategic defaulters who were individual homeowners deserting their own property, these hooligans include the “King of Flip,” Craig Adams, who specialized for years with his cronies in buying low from homeowners and selling high–over and over. We also meet allergist Dr. Bloom whose home was resold for $125,000 more than he had sold it to Adams just weeks before.

The best part: like matter, save government forgiveness, debt cannot be destroyed, and Craig Adams is certainly not a chess player as thinking a few moves ahead is not in his repertoire. Now an FBI informant/ easy-way-out, Adams did his patriotic duty in contributing the the growing hemorrhoid that is the bubble of American and world economies. Ouch. And doesn’t it hurt so much more when the dumdums make the rest of us feel like suckers?

Act 4: Is it hard sometimes to figure out who to sue?

How do you prove that you’ve been misled? The attempt to dig one’s self out of the grave of the kafkaesque is done best with lawyer and paperwork in hand. Some services are worth paying for.

Act 5: Something big happened

At the bondcave in Kansas, the Planet Money team was told they would receive regular checks monthly with no fluctuation, despite the reality that they received $0 the first month. “Something big happened,” said Samir Noriega, trader of 2005 mortgage Toxie’s ancestors. As investors like our team stand in line to get their money back, loan modifications affect them most. It turned out that a Brentwood mortgage of 200 G’s was forgiven, hitting Planet Money with an asteroid of in-the-red blues.

“With Toxie’s demise, we are one step closer to the end of this financial crisis,” say the team now that they can trace some lines behind the investment scenes. In the end, they wisely pull out, only to put it back in the rockhard yet bloating Ron Jeremy of an investment.