Idiots who want to save money. Right now the spread has come down, but it saved me a half of a point over 5 years when I did it, which more than justifies it. I have never stayed in a house more than 3 years. You can live in a bomb shelter with a security blanket if you wish. You have to base decisions on reality. You can't just make blanket statements and call everyone an idiot who does not agree with 'your reality'.
Wow: Talk about a mile wide broad brush.
There are excellent ARMs provided people got them for the right reasons. I know someone very well who has a 7/1 ARM with a 4% interest rate that doesn't reset until 2011, by which time he planned on downsizing anyway, since the kiddies will all be done with college then, for several years. In fact, when he realized that money was essentially free in 2004 when he took out the mortgage, he borrowed more than he actually needed, and still has over 65% equity in his home.