Housing loans: There was a reason they said "No"

Hmmm....maybe they were on to something

Remember this television ad campaign?

It featured a hip youngish guy -- obviously our hero -- quietly mocking a group of old, stodgy bankers

The bankers were rich, hidebound, and given to saying "No." The new guy was the opposite.

The bank was Washington Mutual, which even came up with a hip new name for itself: "WaMu." (I couldn't figure out why they wanted their name to rhyme with Shamu, but they didn't ask my opinion.)

Fast forward a few months. The ads are gone. Earlier this week, WaMu's shares dropped 35 % to a 17-year low as it struggled with all the bad loans on its books. It has laid off more than 7,000 employees.

At one time, according to Bloomberg News, it ranked 11th on the list of lenders specializing in subprime loans to customers who would've been turned down by a regular bank.

You know, a bank staffed by the crabby old farts so openly mocked in the WaMu ads.

Guess what: Those crabby old farts knew what they were doing. They were saying "No" for a reason. They knew there will always be people want what they can't afford, and that saying "Yes" to them merely hastens the day when the money runs out.