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Affection for our dim species

By Holden Lewis · Bankrate.com
Monday, December 13, 2010
Posted: 10 am ET

I spent Sunday in a self-congratulatory mood, as I reveled in the idiocy of other people. Smugness feels good.

If you were designing a stadium in Minneapolis, would you make sure it could withstand a 17-inch snowfall? Of course you would. Heavy snowfalls in Minneapolis are predictable. So why did the Metrodome's architects design an inflatable dome that would collapse after a big snowfall? A couple of years ago, Reliant Stadium in downtown Houston was damaged in a Category 2 hurricane, forcing the rescheduling of football and baseball games. Why would they build a stadium in Houston that can't withstand a Category 2 hurricane?

Similarly, our regulators and their corporate overlords designed a mortgage financing system that couldn't withstand a drop in house prices. They acted like house prices would never fall, even though there was a nationwide collapse in home values in the 1930s, and regional meltdowns in the last 20 years in California, Texas and Florida.

What are the implications of this human frailty? We've got to set up rules during times of caution -- like, right now -- and follow the rules in times of euphoria. My suggestion: Link minimum down payments to house price growth, so that when house prices are rising fast, bigger down payments are required. Such a rule won't be adopted, because we're an obtuse and greedy species, but it's worth a thought experiment.

Meantime, get smart by consulting Bankrate.com's mortgage calculators.

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6 Comments
jryan
December 15, 2010 at 2:36 pm

inflatable roofs can be heated to melt off snow or deflated to prevent a collapse, it was not the roof that failed, it was human error in controlling the roof. Minnesota has had snow storms likethis in the past, since the stadium was built. Human error just like the human errors that were made when no one investigated the intial complaints on Bernie!!!!

Holden Lewis
December 15, 2010 at 9:18 am

See? It really does feel good to be smug!

scotthill
December 15, 2010 at 12:55 am

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

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scotthill

Mortgage Rates

km
December 14, 2010 at 5:49 pm

Well that's quite an arrogant story isn't it. We're an "obtuse and greedy" species? speak for yourself buddy. And are you an engineer with an engineering degree from an accredited university? If not, then I don't drawing comparisons like you did are legitimate. I know you're trying to dumb it down for the "dim species" so that we can understand these complex topics. Let me guess, you consider yourself to be one of the "enlightened" ones of our species don't you. My advice...don't insult your audience (humans) when writing stories for websites.

Raun
December 14, 2010 at 7:53 am

Do you guys ever answer any questions that are sent to you?
Didnt think so!