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An economic and housing nightmare...from 1906

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posted on Aug, 30 2010 @ 04:02 PM
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In this thread, I will post excerpts from Upton Sinclair's classic 1906 novel, The Jungle. If you haven't read this book recently, you should...there is much in there that is relevant and worth pondering as today’s economy spirals down the drain.

The Jungle was instrumental in creating pressures for business practice reform. It is said that President Teddy Roosevelt was reading the novel at breakfast in the White House and became so disgusted that he hurled his breakfast plate through one of the windows in the White House, shattering it.

The entire novel is in the public domain and may be reproduced freely at length or in forms such as those excerpted below. A free copy of the entire book may be read online at Project Gutenberg.

Although the book touches on lots of aspects of labor and economy that are of importance today, the portions below have to do specifically with HOUSING. I am reproducing them because I find them eerily reminiscent of some of the practices we've seen over the last decade. In some ways the situation was different, but the way the scammy real estate sector operates is very telling. It is shocking how quickly people forget vital lessons. Almost exactly a century later, similar types of mistakes are still being made en masse.

The portions below are a bit lengthy, but hopefully some of you will find them as fascinating as I did. Read it and weep.




posted on Aug, 30 2010 @ 04:03 PM
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In the first excerpt, we meet Jurgis and Ona, a young couple who have just immigrated to America from Lithuania, and their family. The family is considering buying a house.



 

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[edit on Mon Aug 30 2010 by DontTreadOnMe]



posted on Aug, 30 2010 @ 04:05 PM
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In the next excerpt, the family goes shopping for real estate, encounters a real estate agent, and weighs the pros and cons of buying versus renting.

 

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[edit on Mon Aug 30 2010 by DontTreadOnMe]



posted on Aug, 30 2010 @ 04:05 PM
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In the next excerpt, the family finally bites the bullet and buys the home.

 

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[edit on Mon Aug 30 2010 by DontTreadOnMe]



posted on Aug, 30 2010 @ 04:06 PM
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In the next excerpt, the family begins to learn that their house is not all it was cracked up to be. It gradually dawns on the family that their new home is a cheaply made, shoddy thing, and certain deceptions begin to become apparent. An old immigrant woman (Grandmother Majauszkiene) who has lived in America longer than the new arrivals begins to tell them some unpleasant truths about their new home and the monstrous real estate scam underlying the entire corrupt market.

 

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[edit on Mon Aug 30 2010 by DontTreadOnMe]



posted on Aug, 30 2010 @ 04:07 PM
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In the next excerpt, Grandmother Majauszkiene continues, and she finally reveals the awful “secret catch” to the mortgage that will lead the family to ruin.

 

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[edit on Mon Aug 30 2010 by DontTreadOnMe]



posted on Aug, 30 2010 @ 04:07 PM
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In the final excerpt, from later in the book, we see Jurgis’s agony after losing the house. Unable to understand their original mortgage, they were unprepared for the consequences, and all despite sacrifice and hard work, the end was the inevitable and common outcome of the day (and of today) – foreclosure and ruin.


MOD EDIT, from the OP
'''The entire novel is in the public domain and may be reproduced freely at length or in forms such as those excerpted below. A free copy of the entire book may be read online at Project Gutenberg.

 

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[edit on Mon Aug 30 2010 by DontTreadOnMe]



posted on Aug, 30 2010 @ 05:09 PM
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Sounds like the should have educated their selves before taking on such a responsibility. Also why didn't they what till they were in a better position financially? There are a lot of expenses involved with owning a home, not just the mortgage payment. Why didn't they go get there more experienced family member to help them out?

It sounds like a lot of new owners I come in contact with all the time...they have no clue, and have not educated their selves properly.

I'm a real estate investor and I don't agree in saying that all the real estate sector is scammy, sorry if you don't mean all of it.

I have run in to investors & Realtors that have made my skin crawl, I will not do business with them and I report them to the authorities when I know they are trying to take advantage of people.

It sucks to have people in my line of work that gives us a bad name. All I can do is be honest and treat people the way I would expect to be treated.



posted on Aug, 30 2010 @ 06:05 PM
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Originally posted by topdog30
Sounds like the should have educated their selves before taking on such a responsibility. Also why didn't they what till they were in a better position financially? There are a lot of expenses involved with owning a home, not just the mortgage payment. Why didn't they go get there more experienced family member to help them out?



Apologies in advance, I do not know what kind of ethics you practice in your business but this needs to be said,....

Typical real estate or banking response, too bad for them, they should have known better and done their research.
Many loans over the past 10 years have been predatory in nature, and the real estate agents are the front men and women. The promotion of homes for "investments", flippers and fraudsters looking to make a quick buck, driving up prices to the point where hard working people can't afford a home to actually live in.

Interesting how history repeats itself, disgusts me to read about it then as it does in today's news. If banks told folks the actual price of the home after a minimum down payment and a 30 year mortgage few would buy.



[edit on 30-8-2010 by slane69]



posted on Aug, 30 2010 @ 08:29 PM
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I guess we will agree to disagree...no problem.


I wish people would take responsibility for their own actions instead of pointing the finger at someone else.

The people that bought these properties didn't do any research or educate them selves before buying....they got greedy and thought they could buy something for nothing.

They bought a property they could not afford. I do agree that these loans should have never went threw.

Income properties are the best investments you can have, but the retail buyer doesn't understand how to buy them as an investment. As long as you buy right you can make an incredible amount of money with real estate. I always encourage people to pull there money out of the market and buy income properties. Only after properly educating them selves.

They bought the property 100-120% leveraged....what did they expect to happen? Its like someone buying stock, you buy it for 100% of value (I have never understood buying stocks), so you run the risk of it going down and losing money. Not Good!

The word "Adjustable" in Adjustable Rate Mortgage should have been a red flag to everyone, but when you have greedy eyes and live in the moment you tend to ignore reason.

So instead of fixing a property in your neighborhood, you would rather have it become run down and effect the value of your property?

I do rehab properties and make a great living doing it, it bets having to punch a clock and get told what to do. There is nothing quick or easy about it. You must have been watching to many TV shows.

The price we sell the properties we rehab are already set by the market when we buy them, we don't just make up a number, we go by comps in that area. When we are done with that property, it adds value to all the surrounding properties

It is interesting how history repeats it's self, and it's even more interesting how we tend not to learn from it.


My phone rings from sun up to sun down with people wanting to sell there property. Over the years I have noticed one thing just about all of them have in common, debt.....and lots of it. I think the majority of people lack proper financial management, they over spend constantly.

I know people only buy because of three reasons:

(1) Need
(2) Greed
(3) Want

I agree the lenders knew what they were doing, but the buyers of the properties had big GREEDY eyes and did not think a head, or educate them selves properly to know what was going on. You should always protect your self.



posted on Aug, 31 2010 @ 08:20 AM
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reply to post by topdog30
 



need, greed, and want about sum it up. And personal responsibility is key here.

However, people are the product of the culture from which they hail. Our culture is based on abject consumerism. The health of our economy is based not on cash reserves held by The People, but rather how much money The People are spending and how much cash the banks have.

Currently we are told that there is a recovery, yet none of us really see it. Why? Because the money is being sat on by corporations.

I would have liked to have read the FREE USE book, but it was edited away. The OP needs to just host it on a site of his own, or not reference another website when referencing the book.

ATS, i understand you feel like you "dodged a bullet", but if the work is in the public domain do you really have to remove it from your site for fear of violating Fair Use?



posted on Aug, 31 2010 @ 09:04 AM
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Originally posted by topdog30
I guess we will agree to disagree...no problem.


I wish people would take responsibility for their own actions instead of pointing the finger at someone else.

The people that bought these properties didn't do any research or educate them selves before buying....they got greedy and thought they could buy something for nothing.

They bought a property they could not afford. I do agree that these loans should have never went threw.



I saved myself from problems by being heads up and demanding a traditional fixed loan. They tried, my broker, to get us to get into an ARM for many weeks.

Not patting myself on the back here...but some thing to think about.

Brokers were telling many that they didnt rate a traditional fixed load....when in fact they did. Why, so they could rip them off. The folks that they were working for, leanding institutions were pushing these crap loans with high commision rates.

It should be law and probably is somehwere that you can sell a loan to someone that doesnt understand whats about to happen to them when the fine print kicks in. And we have to ask why someone would sell a loan for a 250k house to a man and wife making 50k (and in may case much less)

Why...everybody knows stupid is where the money is and the unwritten law is that the stupid are free for the taking.



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