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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (26749)	12/23/2007 10:20:49 AM
From: Ilaine	Read Replies (2) \| Respond to of 217620

What I am seeing with ARMs is that the people with problems are already terrible credit risks and the ARM resets at something like 12%, when they could just barely make the payments on the teaser rate, not to mention punitive prepayment penalties. Also, no equity, no refi. So, you're right, it's not the ARM that's the problem, it's too high debt-to-income ratio, bad credit in general, bad deal-making. They could have saved themselves a lot of grief by hiring a good financial adviser and good lawyer in the first place. But that would mean hiring someone who was going to tell them, "wait, stop, there are problems!" And these are people who can't see two days into the future.

To: KyrosL who wrote (26749)	12/23/2007 10:34:47 AM
From: carranza2	Read Replies (3) \| Respond to of 217620

Greenspan was making the recommendation when home values were extremely high and interest rates extremely low. A change in either meant trouble, as is now obvious, and should have been obvious to an experienced economist. That underwriting standards for ARMs were absurdly lax only exacerbated the problem we see now. If you don't believe me, check out this 2004 article by Fleckenstein, who is no one's fool. moneycentral.msn.com A snippet, from 2004: So the most irresponsible central banker in the history of the world created the biggest bubble in the history of the world, which had disastrous consequences for the stock market and the economy. In order to ameliorate that, he has created bubble-like conditions and absurd financing schemes in real estate. Meanwhile, we've seen an enormous concentration of risk develop inside the financial system: We are down to just a handful of big banks and government-sponsored entities that are using his other favorite toy, derivatives, to theoretically manage away all their risks. Fed prudence takes a powder The summation of these variables has only increased the risk of something bad happening. And, of course, that risk has been heightened by the tanking of the dollar. The dollars decline has been promoted by Greenspan's irresponsible policies and attempts to continually bail out his most recent mistake. He has been doing this serially since junk bonds and bad lending nearly took down the financial system at the end of the 1980s and wiped out the savings and loan industry in 1990-1991.

To: KyrosL who wrote (26749)	12/23/2007 4:49:52 PM
From: TobagoJack	Respond to of 217620

greensputin was brilliant engendered the successive bubbles, knowing full well that a masssive bail out comes at the end, encouraged the placing of one way nothing down interest only reverse amortization variable rate wagers on call-options that track housing prices which the CPI most definitely does not track the gamblers wager the rest pay and as the gamblers default their disposable cash flow actually improves thus supporting consumer spending, even without volume/unit increase, now that inflation is most certainly feeding through brilliant, masterful, maestro-like