A Subprime Parable By Michael Lewis Analysis

Improved Essays
In his essay “The Mansion: A Subprime Parable,” Michael Lewis reported that most Americans tend to desire houses they cannot afford. They start blaming rating agencies and mortgage brokers because they find themselves financially underwater. But according to Lewis claim, the lending business didn’t create this desire. The people did. He explains that most people want a house that reflects how well they are. They think that they will control the house but the truth that the house controls every aspect of them. Not only this, but they also take houses as moneymaking opportunities. I agree with Lewis that we have the desire to go beyond our budget and like to show off especially with material things such as houses.
As Lewis confesses about his
…show more content…
As Lewis stayed at the mansion, he noticed different problems he never did before. He felt the need to fill rooms with furniture and repair so many things only to feel comfortable. He and his family found it hard to communicate within the same house. They also didn’t meet the level of privacy they aimed for as so many people are working to run the house. His children also complained about being asked about their position and their mansion most of the time. The reader can conclude that it’s hard to get comfortable if they are not in their place. By place, I mean things they are used to. For example, my grandmother decided to move into a new large house about 3 years ago. She lived in a 2 rooms’ house. She was happy with that until she felt that she could afford a new bigger one. And so she did, with no reason at all other than the idea of spending money. She was happy with her new house but she was exhausted searching comfort. It was so big to be lived by only three people. She would call her daughters everyday to visit her. And make herself busy trying to fill the empty rooms with furniture. The author made me realize that its really hard to find comfort in having something bigger than what is meant to us. That was my favorite part because if we keep chasing comfort and happiness in things bigger than us, we will never reach them. This is why both the author and my

Related Documents

  • Great Essays

    The definition of which could differ to individuals but during a press conference by President George W. Bush he clearly relates the American Dream with home ownership. “Right here in America if you own your own home, you're realizing the American Dream” (G.W Bush, Remarks by the President on Homeownership, St. Paul AME Church Atlanta, Georgia USA, June 17, 2002). In 2003 the Federal Reserve dropped interest rates to 1% (Labonte & Makinen, 2008) this caused America to start spending big and the American dream of home ownership; instead of being a myth and something which has been unachievable by millions in the past, all of the sudden was in their grasp, enter subprime mortgages. Prime mortgages were approved for people who qualified on the prerequisites stated on the terms of a loan. Prerequisites included: down payment, stable income and current assets as collateral in case the borrower defaulted.…

    • 1293 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    In Edward Chancellor’s “Devil Take the Hindmost” he references and describes the process for a mania to take place. Specifically, in the third chapter, Chancellor highlights Charles Kindleberger’s theory for the development of speculative manias. This economic theory claims that first displacement occurs in the form of an exciting new investment opportunity, positive feedback quickly ensues resulting in a euphoria, new risky financial products are created, corruption takes place, and then, finally, the corruption is exposed and expectations are not met resulting in a market crash. Chancellor then goes on to supplement this economic model with both a social and a political condition. I believe this model is closely replicated in the 2008 subprime…

    • 825 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Pro-Active Self Defense

    • 389 Words
    • 2 Pages

    Being comfortable is not about facing a problem when it's introduced; it is about managing your own life and you as…

    • 389 Words
    • 2 Pages
    Improved Essays
  • Great Essays

    The Great Recession was caused by a number of different factors and the effects were abundant. With so much disagreement on what truly caused the recession, it is apparent that it cannot be pinpointed to one single event or action, but rather a number of factors that set off this devastating economic event. The recession can be blamed on a combination of factors such as deregulations by politicians, AIG, the S.E.C, and many others. The effects of the recession were felt by homeowners, banks, and many working Americans as the economy declined, leaving numerous drowned in debt.…

    • 958 Words
    • 4 Pages
    Great Essays
  • Improved Essays

    The obstacles of economic recessions and being targetted by one’s race can create great obstacles that make owning a home seem nearly impossible. “People who own property feel a sense of ownership in their future and their society...people trapped in a culture of tenancy do…

    • 831 Words
    • 4 Pages
    Improved Essays
  • Decent Essays

    When it comes time for me to fulfill my American Dream I will consider the current economy and come up with my own definition of home ownership. By that time a whole new product might be available that has never been done before helping create that definition for myself. I hope this make sense. It is my view I have developed…

    • 467 Words
    • 2 Pages
    Decent Essays
  • Improved Essays

    Redlining In Society

    • 1486 Words
    • 6 Pages

    All men are equal, but their circumstances are not. America bears an ugly history of racial segregation in cities, mostly due to the practice of redlining. Lending companies and banks withhold mortgages and other loans from people who live in neighborhoods of certain ethnic makeups. In a perfect world, arbitrary factors such as race would not affect someone’s ability to buy a home. Unfortunately, we do not live in a perfect world.…

    • 1486 Words
    • 6 Pages
    Improved Essays
  • Superior Essays

    Housing Market Bubble Case Study

    • 1229 Words
    • 5 Pages
    • 10 Works Cited

    In 2005 over 1,283,000 family homes were sold throughout the U.S. housing market according to U.S. Statistics. This was a larger number of houses sold compared to previous years with a range of 609,000 houses being sold per year. This was expansion, with lower interest rates, economic booms, and most people living in houses they couldn’t really afford if you looked into their finances. This is what later created negative home equity balances, and forecloses along with many evictions. Before the collapse of the housing bubble more and more people thought at least that they were “living the American…

    • 1229 Words
    • 5 Pages
    • 10 Works Cited
    Superior Essays
  • Improved Essays

    Homeownership In America

    • 1125 Words
    • 5 Pages

    In the latter, a new factor played a key role in damaging the American housing market. Homeownership became an attainable yet expensive status symbol for the American middle class over the course of the 20th century. For…

    • 1125 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    This passage is about the Walls family getting kicked out of Erma’s place so they go and buy a run down house for them to live in then fix it up so it’s more suitable to live in. Some would say that it’s what some has that would keep you going, but in this passage Jeannette Walls conveys an idea that it’s the intangible possessions that can really keep you going. The author helps convey this idea through the use of symbolism. This is a passage from Jeannette Wall’s memoir, The Glass Castle.…

    • 651 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    In the book, “The Market Revolution”, by Charles Sellers, Seller talks about the period in American History from 1815 to 1846. Seller refers to this time period as the “Jacksonian America”. Sellers main argument is that the major social revolution, created by capitalism, that occurred after the War of 1812 caused American politics to turn from constitutional republicanism to a more democratic way of politics. He believes Jackson was a main reason for this change in American politics. Jackson’s main policies consisted of breaking down the Bank of the U.S., the achievement of extending the voting right to white men without power, and rooting out all corruption in American politics.…

    • 1120 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Subprime Mortgage Essay

    • 1009 Words
    • 5 Pages

    Benjamin Franklin once said, “money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants” (brainy quotes). 8 years ago the United States economy suffered the most extensive downturn since the Great Depression. Leading up to the financial crisis prices of homes were on the rise and home- ownership rates rose to monumental level of 68.8%. Traditionally when customers apply for a mortgage the customer would put 20% down and then take a mortgage out for the other 80%, but as the prices of home began to rise lenders began to make loans to perspective homeowners who normally would not qualify (Bigio).…

    • 1009 Words
    • 5 Pages
    Improved Essays
  • Superior Essays

    The Giant Pool of Money Analysis Every individual in the United States wishes to be a homeowner because owning a home is considered as the ultimate achievement by majority of the population and is a symbol of successful and fulfilling life (Grant, Rick). So in the early 2000s when individuals were provided an extremely easy way of getting a loan and buying a home irrespective of their job and background, majority of them grabbed the opportunity. But, this scheme of simplifying mortgage rules and procedures led to overvaluation of mortgages based on an assumption that housing prices will continue to escalate led to the financial crisis of 2008 (Blumberg and Davidson). One of the biggest issue during crisis was that the decisions made around…

    • 970 Words
    • 4 Pages
    Superior Essays
  • Improved Essays

    John leads her to believe there is not enough room in the other rooms except for the cellar. She chooses to stay in the big room. As time goes on, she grows fond of the room and eventually the wallpaper. The narrator spends most of her time alone, leaving her with not much to do other than look at the wallpaper. Her primary form of entertainment has become attempting to figure out the wallpaper’s pattern.…

    • 1001 Words
    • 5 Pages
    Improved Essays
  • Superior Essays

    The Fall of the House of Usher , written by Edgar Allan Poe, digs deep into the mind. Poe is known for his dark, mysterious writing style and this short story is a great example of that. Describing dark and gloomy features all through the story, The Fall of the House of Usher displays a great understanding of isolation through its characters. Loneliness is a destructive force that can cause mental and physical illness or distress. These qualities play a major role throughout, forming a peculiar storyline that unfolds in an unexpected way.…

    • 1057 Words
    • 5 Pages
    Superior Essays