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Strategies & Market Trends : John Pitera's Market Laboratory

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To: estatemakr who wrote (8494)	12/4/2007 1:20:18 PM
From: The Ox	Read Replies (1) of 33421

The average consumer who is currently in over their head, with an ARM that they should have never been in, does not possess your knowledge of the financial markets, and knows nothing of "margin", "leverage", etc........ Both sides in this equation are "at fault". JoeSixPack(JSP) should not have allowed himself to be put in an ARM at a time when interest rates were at or near record lows. Why did JSP agree to an ARM? Because the banks and the mortgage companies pointed JSP into these. Why? Because the banks and mortgage companies would make more and more money over time, as each rate reset occurred. Add in "teaser rates" and this situation becomes an even more dubious scam. To lay the blame solely at JSP is flat out wrong. I have little to no sympathy for the banks and mortgage holders who may be required to turn some of these ARMs into fixed rate mortgages, which in reality, is where most of the JSPs should have been pointed. In most cases, JSP should never have been given an ARM and, in most cases, the banks and the lenders clearly knew this was the situation.

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