The Two Faces of Mortgage Debt – “Return to Creditor”

Return to Creditor

Stuyvesant/Cooper Houses NYC 2006There is an interesting headline in today’s (1/25/10) New York Times, “Huge Housing Complex in N.Y. Returned to Creditors”.1 This article reports that Tishman Speyer Properties and BlackRock Realty defaulted (welched?) on their debt obligations of $3 billion for their 2006 purchase of the Stuyvesant Town/Peter Cooper Village in Manhattan for $5.4 billion. This is another example of how we think that is it merely a business decision for a corporation to shed unsupportable debt while homeowners faced with the same situation face it as a moral and social disaster. The phrase “returned to creditors” elegantly captures corporate America’s relationship to debt. Its just business.

Default on your home mortgage? What will the friend’s think? The neighbors? Seems to me that what is appropriate for business must be appropriate for individuals. After all, we have been barraged in recent years with call for every person to act as an entrepreneur, a business of one. Any business person looking at continuing to fund a business whose value has shrunk by 30% to 50% while operating costs (mortgage payments) remain fixed would immediately decide to walk away (default) from the debt.

Return Your Sunk House to the Creditors

Time for all those mortgage holders out there to return their underwater houses to their creditors and move on with their lives. This is what these two big real estate firms are doing.

More Readings

For more on the arguments about mortgage defaults see this article in the Sunday New York Times, “Underwater, but wil they leave the pool“, by Richard H. Thaler and the 1/7/10 article, also in the NYTs, “Walk Away From Your Mortgage!” by Roger Lowenstein.



  1. photo by Nicole Bengiveno/The New York Times – The Peter Cooper Village and Stuyvesant Town complex in 2006- borrowed without permission []

Jane Kogan’s 70th Birthday Party – July 2nd – Provincetown, MA

Jane Kogan invited us to her 70th birthday party in Provincetown. The event, attended by around 35 people took place at the famous Lobster Pot restaurant. Jane chowed down on a disgustingly large lobster with all of the fixings. I got a chance to discover a new crowd of of friends and cronies.

Jane Kogan

Jane Kogan with lobster headdress

















looking up the table

Friends and relatives at my table. Apologies for the lack of names.










more friends

more friends













more friends












Jane and her lobster

Jane chowing down














Jane's birthday cake

Jane's birthday cake. It was explained that Jane does the New York Times Crossword puzzles in INK and does not know from whiteout!!




















IMG_0093-2

We enjoyed the whole affair despite the bouncy weather on the ferry coming and going to Boston.















PP

The Fog of War or A Fog of Ethics?

Through our friend Esther Hanig we attended a showing of Errol Morris’s new documentary, The Fog of War: Eleven Lessons From the Life of Robert S. McNamara. at the Kennedy Library in Dorchester on December 14, 2003. This documentary is an extended adventure into the historico-biography of Robert S. McNamara, most famous as the Secretary of Defense during the Kennedy and Johnson administrations. The movie intersperses close up head shots of McNamara (always shown off center) responding to questions posed by the interviewer (never seen, but clearly the director Morris) with historical footage and graphics illustrating events or concepts.

 

 

McNamara today at age 87 McNamara as Sec. of Defense ca 1966. 
Photos appropriated from the New York Times web site  

 

One of the most effective sections reveals McNamara’s role in the planning and execution of bombing campaigns during WWII under the command of Gen. Curtis LeMay. This bombing campaign attacked 67 Japanese cities. Morris uses historical footage of the results and then flashes the names of the Japanese cities with their populations on the screen immediately followed by the names and populations of similar-size American cities. In one night a fire-bombing of Tokyo incinerated 100,000 civilians. In the movie, Mr. McNamara tells Mr. Morris. “Lemay said, `If we’d lost the war, we’d all have been prosecuted as war criminals.’ And I think he’s right. He — and I’d say I — were behaving as war criminals.” He asks, “What makes it immoral if you lose and not immoral if you win?” (thanks for this quote to the movie review article “War and Never Having to Say You’re Sorry” by Samantha Power, Published: December 14, 2003 in the New York Times)

Later, covering the Vietnam War, Morris provides audio tapes of both Kennedy and Johnson speaking with McNamara about the war. These add more fuel to the argument that if Kennedy had lived that he would not have enlarged the US involvement. And, on the other hand, Johnson comes across as clearly responsible. No surprise there.

When asked during the post-screening discussion about why he waited for over twenty years to reveal that he had come to think the Vietnam war a mistake even while still Sec. of Defense, McNamara repeated his claim that as a former Sec of Defense he could not say critical things of the war policy because it would have been giving comfort to the enemy and endangering US troops.

This is a cruel bit of logic.

When McNamara left his position roughly 25,000 Americans had died and probably 10 to 20 times that many Vietnamese. By the time the war actually ended seven years later, more than twice that many had died on both sides. It remains a galling outrage that this man, so intimately involved with the development and prosecution of the Vietnam War, could be seeking absolution twenty years later. It is the minimum we human beings owe to each other that, when confronted with obvious wrong doing, we speak up. This obligation is all the more important for those in positions of power and authority. But, one of Morris’s points in his movie is that evil and evil doers are never quite so easily categorized as might be in an old Western movie.

The end of the post-screening discussions with McNamara displayed this point with fresh vigor. After the program was officially closed, McNamara called for a few more moments of the audience’s attention. He wanted to add to his call for work on developing and deploying a real policy on proliferation of nuclear weapons with a call for international standards for behavior by political leaders enforced by international judicial tribunals. Perhaps we might think of him in the dock for his role in the Vietnam War. Just as a small starting point for the prosecution: during the movie McNamara himself pointed out that more munitions were dropped on Vietnam during the war than all that were used in the European theatre of WWII. And, this, in a country that is just about the same land area as our states of Wisconsin and Minnesota and then, as now, one of the poorest countries in the world.

But, then, McNamara seems incapable of connecting the ethical dots in his own life. How can acknowledge that his role in the fire-bombings of Japan might be considered a “war crime”, his policy in Vietnam wrong, and call for international standards of behavior enforced by international courts??

PS: I highly recommend the movie. It is challenging and very well made.

12172003

“Long Live Marmite! Only the British Could Love It”

marmitefrom the New York Times January 24, 2002: a page A4 article “Burton-on-Trent Journal: Long Live Marmite! Only the British Could Love It”

“Being British, the company has had an appreciation of the public’s divided loyalties between those who find Marmite revolting and those who think it sublime.

One campaign, a television ad exploiting the product’s notoriety for producing bad breath, showed a woman excusing herself from a sofa clutch with her boyfriend and running into the kitchen to have a quick bite of Marmite. She returns, they kiss, and the final scene shows the woman alone while the man is heard throwing up in the toilet.”