Unbelievable. (Updated)

UPDATE: Thanks to Raina and Decorno for the update to this post. Apparently, Patty Barreiro, the author's wife (pictured above) has a history of multiple bankruptcies which was intentionally, some might say egregiously, left out of the article. Can you imagine?

Megan McArdle from The Atlantic monthly uncovered the dirt. Here's an excerpt:

"In September 1998, California bankruptcy court records indicate that Patty and her first husband declared bankruptcy. The financial statement they filed with the court indicated family income of $174,000 in 1996, $87,000 in 1997, and $126,000 in the first nine months of 1998. The income fluctuations are not surprising, given that her husband was in the film production industry. By the time of the filing, the couple owed about $30,000 on 8 credit cards, over $200,000 in back taxes, and almost $15,000 in private school tuition, as well as substantial car and mortgage payments.

[Then] In 2007, nearly as soon as she was eligible, Patty Barreiro filed again in Montgomery Country. ...The bankruptcy code requires filers to wait 8 years after a previous Chapter 7 discharge. Barely four months after she became eligible, Patty Barreiro filed again."

Here's a link to The Atlantic Monthly article.

Here's the original article from the New York Times Magazine:

My Personal Credit Crisis by Edmund L. Andrews

If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the paper’s chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben Bernanke at close range. I wrote several early-warning articles in 2004 about the spike in go-go mortgages. Before that, I had a hand in covering the Asian financial crisis of 1997, the Russia meltdown in 1998 and the dot-com collapse in 2000. I know a lot about the curveballs that the economy can throw at us.

But in 2004, I joined millions of otherwise-sane Americans in what we now know was a catastrophic binge on overpriced real estate and reckless mortgages. Nobody duped or hypnotized me. Like so many others — borrowers, lenders and the Wall Street dealmakers behind them — I just thought I could beat the odds.

For the entire article, click here.

If you are not personally going through it, this article will illustrate how the mortgage crisis happened: one stupid decision mortgage at a time.

I saw this coming. I did. My husband is a real estate lawyer and he would come home with tales of refinances that made my head spin. I remember asking him in the late spring of 2007, "What if it all came crashing down at once? Could we have another depression?" He said, "It couldn't happen. There are too many safeguards in the system to allow a total financial collapse."

Right.

On a related note, I'll bet this guy sure feels stupid (his book was published in Feb. 2006):

Doh!

Subprime Primer.

Oh, it gets better. To see the entire slideshow, click here.

Tuesday Ugly.

They are bailing you out, you idiot.

In an effort to avoid panicking Mom and Pop America, Congress has allowed this to be called the "Wall Street bailout" rather than what it really is, the "Main Street bailout."

While I absolutely agree with caps on executive pay and accountability, the bailout is a necessary evil. Without it, the credit markets will (and have) seize(d) up. And as an American/consumer, you understand that the need for credit is everywhere and that you cannot have capitalism without it. Credit is needed between banks, between banks and consumers, in fact, all market participants require credit in the form of small business loans, mortgages, auto loans, student loans, the list goes on.

Those not in favor of the bailout clearly do not understand the potential fallout. The first wave has already crashed on the beach and the beach is now littered with the debris of financial institutions. The next wave may very well take out your job, your car, your home and your bank account.

So should the bailout be approved? As my brilliant husband summed up: "It's like if your teenager comes home drunk. If he is merely drunk, you let him sleep it off and suffer the consequences; if he is toxic and his life is at risk, you take him to the hospital and have his stomach pumped. It would be great if the economy could just puke its guts out but it's already on life support."

And if you're worried about the $700 Bill? Don't worry. You'll pay for it one way or another.

*UPDATE: Okay, assholes, it passed. You had better not make a fool out of me.*