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                      From the back pages of the National Post

                      The irritating face of economic havoc
                      Cosh, Colby. National Post [Don Mills, Ont] 19 Sep 2008: A.18.

                      As the American financial system goes up in flames like a tissue-paper fairyland touched by a stray match, I can't help thinking back to the first time I thought to myself, "It's time to short Uncle Sam."

                      It was when I first read about Casey Serin -- a name that is not likely to mean much to you now, unless you are a true connoisseur of miscellaneous Internet phenomena. Today, Casey, pictured below, is forgotten, but one day, his curious story will be re-examined with intensity and amazement; for he was the canary whose plummet from the perch disclosed that the world's major financial organs were sucking methane.

                      Casey's remarkable adventure was, by and large, already over when he first became famous in the autumn of 2006. That was when the young Californian started his blog, IAmFacingForeclosure.com. The site was one of a number of "housing bubble blogs" run by troubled investors that had begun to attract a following at the time.

                      Two things made Casey's site stand out so far from the rest that journalists described him as "on his way to becoming the most hated blogger on the Internet," and an exemplar of "irritainment": the depth of the hole he had dug for himself and the complete lack of self-awareness with which he described his predicament.

                      A veteran of get-rich-quick real estate books and seminars -- of the sort that gets nobody rich quick but the authors and presenters --Casey, a newlywed Uzbek immigrant then aged 23, had quit his job in the fall of 2005 to become a full-time property speculator. Using none of his own capital, he had been able to purchase eight houses across the U. S. southwest in just eight months. Total value: roughly US$2.9-million. How was a former Web developer who had never earned more than $50,000 in a year able to build such an empire? The question was once an idle conundrum, but today it seems somehow imperative that a full answer be found.

                      The short, ostensive answer, of course, is mortgage fraud-- though it was fraud of a sort that, as Casey has insisted all along, no American authority has been very interested in prosecuting or preventing. With encouragement from mortgage brokers, Serin lied to lenders about his income and abused subsidized loans intended strictly for owner-occupants. Making multiple purchases before the initial ones could filter through to his credit reports was crucial to the process. Later, when he managed to unload some of his properties, he would use up-front cash from sellers to bankroll other purchases (as well as his own expensive lifestyle), failing to give the required notice to increasingly anxious creditors.

                      Serin was so unaware he'd done anything wrong -- ethically or legally -- that he openly blogged about all this behaviour, defiantly arguing with Web visitors about his refusal to find a job, his carelessness about reporting to creditors, his reliance on patient friends and relatives and the inane purchases he would make whenever some scrap of cash fell in to his hands. He became legendary in the blogosphere and on the talk-show circuit for alternating half-baked musings about whether he'd really done anything wrong, dipstick maxims like, "The fastest way to becoming a millionaire is to borrow a million," scorn for formal education and hard work and praise for virtually every form of snake oil known to mankind, ranging from enemas to wheat grass to "9/11 truth."

                      Yet despite being a naive, lazy combination of American Dreamer and con man, it was only the chance discovery of one of his Web pages by a mortgage lender that stopped him from buying a ninth house.

                      At one time, the whole unbelievable crap game might well have worked out for Casey -- but he had picked a hilariously inappropriate time to jump into U. S. real estate, and had made matters worse by buying certain properties sight unseen from wholesalers. In the end, at least five of Serin's houses were foreclosed on, becoming poorly maintained neighbourhood nuisances in the meantime. His net worth is in the abyss, his beautiful wife left him and took her annihilated credit rating with her and his history of shady dealing leaves a declaration of bankruptcy almost entirely out of the question.

                      So how many Caseys are out there, living on the edge in the American wilderness? If home lending practices were really as insane as he has demonstrated, using nothing but a head full of self-help nonsense and the guts of a burglar, how much abuse was perpetrated by bright people who really knew how to game the broken system? How much bad debt still remains to be purged, and how low can the bottom of the housing market be? No one can say: All one can do is tremble with dread for the fate of the republic.

                      colbycosh@gmail.com

                      Credit: Colby Cosh; National Post

                      Illustration
                      Color Photo: / x ;; Caption:

                      Copyright CanWest Interactive, Inc. Sep 19, 2008

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                      Data notes to "Will no one rid us of these turnout nerds?"

                      Statcan wants me to make sure you know "This analysis is based on the Statistics Canada General Social Survey, Cycle 22: Social Networks, 2008. All computations, use and interpretation of these data are entirely that of Colby Cosh."

                      The actual sample sizes for the "Olds" and "Youngs" categories defined in the article are n=1780 for the "Olds" and n=1997 for the "Youngs". To derive national estimates of both eligible-voter totals and "did-vote" totals, the answers by respondents have to be adjusted by individual demographic weights, designed (by Statcan) such that any possible subsample reflects as closely as possible the geographic and demographic qualities of the population as a whole. Individual respondents who have demographic features underweighted in the sample are thus given extra weight for the purpose of making population estimates like mine. This makes estimating confidence bounds and calculating statistical significance a little tricky: readers who are interested can consult the documentation for GSS Cycle 22 (which, unlike the microdata themselves, is publicly viewable). But the differences between the estimated "Old" and "Young" turnouts do appear to be many, many standard deviations apart in every case.

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