Risky Loans Hurt Lender in California

This has got to be my favorite quote, from the recent-former-Chairman and founder McAlister:

“With the benefit of hindsight, there are lots of people who have comments to make,” he said recently in a telephone interview from his home in Bullhead City, Ariz. “I don’t know if anybody would have known that the price of houses would go down 30 percent. Nobody would have known that so everybody did it.”

With all due respect, what the hell is this coot talking about? Anyone who glanced at a long-term chart of home prices to incomes could have seen we were way way above the trend in a very serious and fundamental sense, and would have to revert 30-50%.

I am going to hazard a guess here that McAlister did not look at any such charts, because he reasoned wishfully that "innovative" (and very profitable) products like Downey's Option ARMs would keep home prices rising Forever, perhaps ascending directly to some sort of debt Mecca or heaven in a kind of crony capitalist rapture.

Give me a break!

There certainly is no shortage lately of captains of economic (and political) ships who refuse to take the blame for steering us into the icebergs. And many of them were first to bail upon signs of terminal troubles.