4/13 You know things are bad when Mr. Greenspan start acting like
a mortgage saleman asking americans to go for ARM intead
of FIXED.
\_ Care to elaborate for us non-economists?
\_ This guy's referring to an article that was motd'd recently.
In that article, they point out
that Greenspan knows that the whole recovery is being fueled
by consumer debt spending, which is fueled by consumers taking
equity out of their house. But most everyone's refinanced
already to fixed--and so the recovery is jeapordized. If
Greenspan can get the consumer to refinance again--to an ARM,
they'll have more money to spend. And they will--Americans
being the dumb "must have what I want NOW" fools that we are.
\_ So if you switched to an ARM, you'd have lower mortgage
payments in the short term, so more spending money, but then
you get screwed in a year or two when interest rates go back
up. Is that it?
\_ Yes.
\_ The main thing is why greenspan feels the need to get
involve with this, which is really weird. shows
that he is not confident in the recovery at all.
\_ Fed Chairman's job is not to feel confident about
anything or to project his own confidence to the
country. His job is to try to keep the economy in
a good shape.
\_ yea, but encouraging people to go for another
refinance from fixed to arm makes him look
desperate, and make things look dire. Is
the economy really that bad? |