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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (51353)	1/25/2006 2:17:10 PM
From: GraceZ	Read Replies (1) \| Respond to of 110194

Again, with your logic, there is no drug problem, no alcohol problem, no tobacco problem. Agreed? Not at all. The cumulative negative effects, incidence of death and disease related to drugs, alcohol and tobacco dependency are far more easy to predict than a negative outcome from buying a house at zero money down. We can reasonably predict the negative effects of drug dependency, over large populations of individuals. Still, some individuals will use all these things and never experience the negative effects. Plus, some individuals might even experience positive outcomes. Maybe one of Shades crack whores might be so grossed out by the experience of having sex with him that she might decide then and there to "turn her life around" and wind up doing great things. Economics can't answer ethical questions. The two different transactions, one between the crack whore/John and the other between the lender/borrower are similar from an economic stand point, but most would argue different from an ethical standpoint. Many years ago I tried my best to talk some friends out of buying a house using an interest only loan. They went ahead and did it against my advice. None of the things I warned them would happen, happened. Does this mean that my arguments were wrong, no. I merely laid out the risks using the best estimation of future events (from previous history) and came up with the high probability of a negative outcome from those scenarios. They did not materialize. Just as Shade's hooker might not wind up dead from an OD, but the probability is certainly increased every time he hands her money. He expressed some concern about the negative externality of drug addiction in his community, I was merely pointing out that he was inadvertently contributing to it.