Queasy like Sunday morning: 'Times Magazine' brings the pain on credit, debt, foreclosure

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Ah, Sunday morning! It's nearly upon us again. The languid wake-up. The mocha java. The nova and cream cheese. The tangy mimosa. The New York Times. The New York Times Magazine.The New York Times Magazine's Money Issue. The glance at the table of contents. The flipping ahead. The credit and credit cards. The ballooning debt. The inevitable bankruptcy. The creeping dread. The moist paranoia. The undulating queasiness. The pushing the bagel aside. The not finishing the mimosa. The crawling back into bed. The curling into fetal position. The whimpering and weeping. The desperate wishing that it were All a Bad Dream. Ah, Sunday morning!

If you're a Times reader, get ready for a page-turning, stomach-churning weekend. The Money Issue -- given everything, the editors might as well have called it the Credit Issue -- taps into our nightmares of financial nuclear winter, on a wide level and a personal one too. The paper's economics reporter Edmund L. Andrews provides a personal tale of his experience of buying a house outside Washington, in Silver Spring, Maryland. He was supposed to know better, he says -- he was, after all, reporting on the subprime mortgage crisis -- and yet he jumped in anyway, enchanted by the lure of easy homeownership and easier money. (Andrews' article, tellingly, excerpts his forthcoming memoir, Busted: Life Inside the Great Mortgage Meltdown.)

What follows is not pretty. I won't spoil the sordid details, but Andrews' riveting document of his own anxiety and sleeplessness, his dread of being way too deep in churning financial muck, will feel familiar to many of us, perhaps unbearably so. After the real-estate saturnalia of the previous years, a collective hangover was preordained. Andrews knew his day of reckoning would come. Yet he was powerless to resist.

You might think he got his just desserts. You might be thinking: Fancy reporter. Pretty smart guy. Makes $120,000 a year, base salary. Not bad. Guess he had what's coming. But no: Andrews is prostrating himself for the fallacies of millions -- millions of educated consumers, no less -- and in a sane and sober economy, sane and sober home buyers would not be in such deep trouble.

Perhaps most ominous is how Andrews' story ends. I'll leave the telling to him, but it's bound to leave you feeling pretty unsettled.

If that were the most upsetting story in the issue, that'd be enough to ruin our day. But business reporter Charles Duhigg's "What Does Your Credit-Card Company Know About You?" is liable either to chill you to the bone or get your blood boiling. Credit-card issuers, Duhigg notes, have made increasingly crafty inroads into sussing out its users' demographics and psychographics to help them predict who's most likely to pay their bills and who isn't -- meaning, who makes the best candidates for getting their limits capped and their interest-rates jacked. (Someone who uses a credit card to buy birdseed gets rewarded with higher limits; someone who uses it to buy Jell-O shots at a bar called Sharx gets "rewarded" with skyrocketing rates.)

Duhigg's money shot is a moment he witnessed at a Bank of America four-week collection-staff training session in Delaware. Asked how she would respond to a customer whose husband has left home and saddled her with debt, one trainee explodes, "I would tell her to castrate the man ... He should get his gut hacked up with a rusty knife." Another trainee suggests that she might try a more delicate approach, and she replies with angry indignation. And rightfully so: She may be the only credit-card "assistance" staffer in the business whose first impulse is brutal honesty.

The Times Magazine's issue couldn't be better timed. President Obama on Thursday addressed citizens assembled in Rio Rancho, New Mexico, to blast the banks and card issuers for the steady tightening of the screws on consumers in recent years -- a regimen of subtle interest hikes, enormous late fees, and sliding terms of service. The Senate is examining a bill that would protect consumers from such shenanigans, and the House recently passed a similar bill; the Treasury Department and the Federal Reserve have agreed on enacting new rules, to take place in July 2010, protecting cardholders from such tactics.

Yes, it's a good time to bash a desperate industry that's had some fun kicking us around for a while. The Times Magazine reminds us, in stomach-clenching and heart-rending detail, that as desperate as the credit-card industry seems now, it's nowhere near as desperate as we consumers are.
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