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Has anyone else noticed the uncanny parallels between fantasy football and structured finance?

Both seem to involve disconnecting the value from the source of the value.  In the case of structured finance, it’s separating the payments from payment-generating assets such as loans for homes.  This process created a bubble by disconnecting the incentive to make loans from the actual value of the loans.

In the case of fantasy football it seems a similar process is occurring.  We take all the numbers and statistics generated by teams of actual players who practice and work together on a daily basis and form relationships, and we structurally isolate them from true value of the games.  Then we rearrange and redistribute the numbers and re-value them in a way that creates a variety of perverse incentives that are often disconnected from the value of the games themselves.

Where’s the bubble in all of this?  NFL Football is more popular than ever, and a large part of that is due to interest in fantasy football.  Now instead of just following the Redskins and maybe keeping an eye on the Cowboys, you might also flip back and forth to the Lions-Raiders game to see whether Darren McFadden or Justin Fargas is getting the bulk of the carries.  (Seriously.)

On top of that, services like DirectTV are flourishing thanks to the “need” of football fans to not miss a game.  And fantasy football league hosters, news providers and bloggers are gainfully employed for using skills that previously had no value outside of a sports bar.  All because we’ve developed a more creative way to use these statistics that were sitting around not being used by anyone.

What’s the danger of this bubble?

As a fantasy football participant myself (Team name:  “BAPCPA Men”), I’m not entirely certain, but I can’t help feeling a bit uneasy.  The bubble created by the structured finance machine left a good amount of destruction and bankruptcy in its wake, and somehow most of our country didn’t see that coming.

So I propose we start worrying about the Fantasy Football Bubble now.  Maybe set up a think tank or American Bankruptcy Institute commission to start really thinking these issues through….

….and I  know exactly who I’m going to select for my Fantasy Bankruptcy League team if I get the first pick.

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*Click here for previous BAPCPA Man cartoons, or here for all cartoons on the site relating to consumer bankruptcy.

Below are some helpful posts from bankruptcy lawyer blogs on the topics of mortgages, foreclosure, loan modification and the Making Homes Affordable Program.  Go to the BK Lawyer Blogs page on this site to see a full state-by-state list of bankruptcy lawyer blogs.  (And get in touch if you have a blog and don’t see it listed.)

Update 9.10.09: There’s a great piece on NPR about foreclosures and the black-box decision making process regarding loan modifications (“Major Banks Still Grappling with Foreclosure“).  At one point, there’s a clip of reporter Chris Arnold in the Bank of America call center, listening over the shoulder of a call center rep who tells a homeowner they’re not eligible for a loan modification.  Arnold questions the rep and receives a not so satisfying explanation.  The issue is raised with the supervisors and it turns out the homeowner was in fact eligible for a loan modification.  How frequently is this scenario replaying itself?

George Haines, Esq. and David Krieger, Esq. (Haines & Krieger) (Las Vegas, NV)

• Do you qualify for a loan modification?
• Should I intentionally miss mortgage payments to qualify for loan modification?
• Loan Modification: The NOT Making Homes Affordable Program
• Nevada has highest foreclosure rate in the U.S. for 31st straight month
• What’s so great about foreclosure mediation?

Bruce Weiner (Rosenberg Musso & Weiner) – NYBankruptcyNet (Brooklyn, NY)

• Brooklyn Judge gives New York homeowners a fighting chance against foreclosure
• New York foreclosures likely to continue as ARMs begin to re-set over next 4 years
• Can I keep my home if I file for bankruptcy in New York?
• Subprime loan modification companies

Craig D. Robins, Esq. – Long Island Bankruptcy Blog (Woodbury, NY)

• Why I Won’t Negotiate Loan Modifications
• Many New York Foreclosure Suits Are Dismissed Because They Are Defective
• Is a Short Sale a Reasonable Alternative to Foreclosure on Long Island?

Jonathan Ginsberg, Esq. – theBKLaw (Atlanta, GA)

• Loan Modification Myths Busted
• If I Do Not Reaffirm My Mortgage in Chapter 7, Do I Automatically Lose Title to my House?

Reed Allmand, Esq. (Allmand & Lee) – Reed’s Bankruptcy Attorney Blog (Dallas and Ft. Worth, TX)

• Mortgage Modification in Chapter 13 Bankruptcy
• Selling Your Home When You’re Broke
• Congress Passes Anti-Foreclosure Bill

*To see more of Gideon Kendall’s work go to www.gideonkendall.com and gideonkendall.squarespace.com/journal.  Or order yourself a copy of Dino Pets, the wonderfully illustrated children’s book written by Lynn Plourde and illustrated by BAPCPA Man’s favorite illustrator, Gideon Kendall.

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Bankruptcy Billables is an overview of bankruptcy-relevant coverage and discussion from various law-related blogs.

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Law Shucks

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