rent
what happens when no one pays it?
How do you measure
Measure a year?In daylights?
In sunsets?
In midnights?
In cups of coffee?
In inches, in miles, in laughter, in strife?
(lyrics obv from RENT which i find particularly apt now that the social construct of time has collapsed)
So Planet Money’s amazing listeners email us all the time with the big economic questions on their minds. Their questions are good and smart, and we often address them — like in this recent batch, in which we gently discussed the commercial paper market, among other things. And throughout this pandemic outbreak/economic shutdown/???/present crisis, we got a SLEW of questions like this one: “If we all didn't pay our mortgages, who would lose out? Could the banks just let it go for a couple of months? Who are they responsible to?”
Tons of listeners wanted to know: What happens when literally millions of Americans suddenly can’t pay their rent?
To answer, we went on a virtual journey. We started with Emily, in Philadelphia, who until very recently was a server at a restaurant. We traced her money as it wound through the mortgage finance machine — from her, to her landlord Ed, and into the sprawling, byzantine mortgage market. Which is uhh having a tough time, in places.
One of those places: nonbank mortgage servicers. Here’s a troubling thing we heard from Chris Odinet, a law professor:
“When you pull the curtain back and you see how this actually works, most people say, `this doesn't really make any sense. How can we expect these firms, these servicers who in fact right now are financially weak to make significant payments to investors, when they themselves have no money coming in the door?’ That is the crazy hidden architecture of home ownership in America. And it is breaking right now.”
You can listen here.
(Post script: Yes, for those of you actually IN the mortgage market, you may be pained by our glossing over the many beautiful eccentricities of your world, the complexities, the structures, the nuance in treatment between 1-4 homes or 5, this agency or that. We see and love that complexity. We did not include it all because this is only a 20m podcast, and also surely you’ve seen what happens when you try to explain Freddie and Fannie to a normie at a party. But I want you to know I did yell NEGATIVE CONVEXITY during one of the interviews. u are seen 💖)
Other recent episodes by my brilliant colleagues: the race to make ventilators (warning: this one made ppl cry); the economics of hospital beds; on the millions of newly unemployed Americans; on workers in the food supply chain; and on “$2 trillion” and where that money … comes … from?
Finally, I have some important personal news to share: we adopted a puppy whose face is a black and white deli cookie. We named her Demi, because naming her after Batman villains just seemed kind of mean, and it turns out the Phantom of the Opera’s name was “Erik.”
Here she is in the boot tray that she has made her home, for some reason:
Here she is discovering nature:
She’s a really good dog.
We’d been debating doing this for ages but my partner wanted a puppy and when would we ever have time/be home long enough to train a puppy?? But there we were, like everyone else, stuck at home, for possibly ever, and I needed to stop reading the news obsessively. So we did it. I tweted about adopting her, and, well, folks, her twete did numbers. Then I got to talk about why everyone should adopt a dog, in MarketWatch and Refinery29. I understand adopting is harder now, in part because everyone had the same excellent idea, but I urge you to persevere and find a good dog (or cat or whatever) at a safely-nearby shelter, because it is good for you, and good for the dog, and good for the shelter. All upside!