I’m counting the for-sale signs multiplying in my neighborhood, near retail spots for lease. I’m hearing from newly unemployed friends and family. Now that I’ve seen CNBC’s “House of Cards,” I’m beginning to grasp the enormous scheme that brought us here.
Not that it’s entirely comprehensible.
Even former Fed Chairman Alan Greenspan admits in this documentary, that, while he knows a thing or two about math, he didn’t understand the more complex financial instruments on the market. Nobody can fully make sense of “CDOs.”
You don’t need to understand “collateralized debt obligations” to appreciate “House of Cards,” debuting at 6 p.m. Thursday on CNBC. David Faber’s brisk two-hour exploration of the biggest economic collapse since the Great Depression works backward from case studies to give meaning to ideas like CDOs. Very human accounts by homeowners, a repo officer, investment bankers, all the way up to Greenspan give meaning to the headlines. Bits of newscasts by Brian Williams and others punctuate the personal stories.
The continuing thread, of course, is greed.
The greed of mortgage lenders handing out mortgages to anyone with a pulse; the greed of would-be homebuyers living far beyond their means; the greed of Wall Street, counting outrageous profits while ignoring a long-range systemic failure.
In the aftermath of 9/11, when President George W. Bush told Americans to go shopping, we obeyed. When the Fed drastically dropped interest rates, the country went on a real-estate binge.
People who normally couldn’t qualify for loans were buying dream houses with adjustable-rate mortgages that would balloon later. When the value of those houses became inflated, people borrowed against the equity — to put in swimming pools.
They treated their homes “like ATM machines,” a lender observes. The effects, once reality kicked in, were profound and global. Faber reports:
• Daniel Sadek was a mortgage lender with one of those screaming TV commercials inducing anyone and everyone to borrow money and buy a house. Sadek, who had a third-grade education and fancied himself a film producer, was making personal profits of $5 million a month. Sadek didn’t agree to an interview for the documentary, but footage depicts his high living, including his collection of race cars.
• Narvik, Norway, a picturesque town above the Arctic Circle, was ruined by investing in Wall Street’s scam products. Narvik Mayor Karen Kuvaas tells Faber the lesson: Don’t trust “men in Armani suits.”
The most obvious and, for some, the hardest lesson is also the simplest. As we’ve heard since childhood, if something sounds too good to be true, it probably is.
That’s where the “responsibility” that our new president talks about comes in. But that should be fodder for a future documentary.
Teen idols.
Nominee for the saddest show on television: “Confessions of a Teen Idol,” Sundays at 6 p.m. on VH-1. If you couldn’t get enough of “Scott Baio Is 45 . . . and Single,” this choppily edited “reality” psychodrama is for you. Baio mentors Chris Atkins (“The Blue Lagoon,” opposite Brooke Shields) David Chokachi (“Baywatch”), Bill Hufsey (“Fame”), Jeremy Jackson (David Hasselhoff’s son on “Baywatch”) . . . stop me if you care. All are faded former “stars” who peaked too early.
“How did your fame affect the people around you?” asks actor turned producer Jason Hervey (Wayne from “The Wonder Years”), now billed as “a therapist specializing in fame.” Using the term loosely.
Perversely all-American, this reality spectacle is the revenge of the has-beens: glib one-time personalities who love being on camera.
Joanne Ostrow: 303-954-1830 or jostrow@denverpost.com
