and invest in a proven winner!
Guitars by ~ Esteban ~
Posted on 09/22/2006 8:47:25 PM PDT by churchillbuff
In Greenspan-speak it's a ringing endorsement.
No it isn't. Saying you might have saved money with an ARM in an environment of falling rates, but not if rates trended sharply upward is in no way an endorsement for getting an ARM now. It's a statement of fact.
What he was saying was that ARMs are legitimate financial tools that can save a homeowner money on the mortgage. And, he was saying it at a time when many potential homeowners, mortgage brokers, bankers, etc. were still wary of ARMs.
What's more -- his comments were used by brokers to sell ARMs to clients and add legitimacy to these cockamamie financial instruments.
Greenspun always spoke that way. You are aware of that. Just more doublespeak from fedgov.org. Nonetheless newspaper headlines read
Greenspan advises to take out ARM or real close to that.
I never read the speech but do remember news reports of his speech. It was interpreted by the media as a recommendation.
Alan Greenspan Endorses ARMs 2/24/2004
Yesterday, in front of the Credit Union National Association, Alan Greenspan noted that "Many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade." While that doesn't mean that adjustable-rate mortgages (ARMs) are the right choice for everybody. Things to consider are savings vs. other term choices, the outlook on interest rates in 2007-2014, and the specific terms on each ARM.
You'll notice the headline makes that interpretation. There are many other examples.
Note: Although Greenspan often spoke in cryptic, highly convoluted and just plain weird phrasing, he was well aware of how his comments would be taken by the press and Wall Street.
His speech patterns, such as they were, can be compared to saying, "There appears to be 2+2 dogs running loose..." and later he could deny that he said there are four dogs running loose.
Yes, but not if rates rise sharply.
And, he was saying it at a time when many potential homeowners, mortgage brokers, bankers, etc. were still wary of ARMs.
"I'm wary of ARMs" "But honey, Greenspan said we should get one" "Buy buy buy!!!"
LOL!
Here's my headline:
"Stupid people who don't learn the facts get burned by their own stupidity"
I meant howlin, not hosepipe.
Sorry about that Hosepipe.
When you watch "House Hunters" on HGTV and see homes in CA that a Texas welfare family wouldn't live in selling for $400,00, one can only surmise that everyone on the Left Coast has taken total leave of their senses. For $300,000, you can live in a mansion with property here.
You meant me what, bloviator?
Why are you talking about me on this thread?
The California dynamic is fed by out-of-control immigration. And the restrictive anti-property-rights laws that keep landowners from developing enough homes and condos to keep up with demand for housing.
You just made my point.
It's comments from people like Greenspan and the resulting news-lackie articles that is responsbile for the downturn in home sales. We are still at 6% interest rates. 6% is still more than outstanding, as is 7%.... I remember the Jimmy Carter era of 21% and for years thereafter and clear through the Clinton administration 9 - 11% was considered a decent rate. Anyone sitting back out of media-related fear and not taking advantage of continued low rates to get into a home is insane.
Even that isn't a mistake. Home prices do, have and will continue to go up with corrections along the way. Always have, always will... the price of a home in this country is cheap, in comparison to other places around the world including Central America.
So there is no bad time to go into real estate when interest rates are low? Japan offered zero percent loans during their real estate bust and it had no effect. Real estate just kept deflating. Moral of the story: If you are in a real estate bubble, it may not matter how low interest rates are.
So your point was that you trash people behind their backs, right?
Thanks.
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