- Economy: The whole housing mess started when people's mortgages increased because they used an ARM. The ARM is based on the interest rate right? So when the rates were higher, people's monthly payments ballooned. Combine that with the super high gas prices and people were having to go bankrupt and foreclose on their home. The federal funds rate is at .25. That's practically giving money away. Gas prices are down to $1.50.. I can fill my car again for under $20! Why are people still foreclosing? Didn't their payments go down with the rate? Don't they have a little more breathing room with lower gass prices?
- Share Point: There is an option to have the default value of a list be a calculated value but you can't use a formula that uses other fields? What kind of formula should I use.. 2+2? (I tried and it didn't work)
- What is in the walls of my office? Seriously, it's kind of scary.
- How did I get such a beautiful and loving wife? She's taking me on a date tonight!
- How do we get some global cooling.. specifically in the DC area. Every time we've had precipitation, it's been rain. Always 33-35 degrees. Seriously people we need a solid snow!
Wednesday, January 07, 2009
I don't get it
Some things I'm fuzzy on.. if someone has the answers that would be great..
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This is coming from a non-economist (I just hang around with a bunch of economists...), but I think I can answer the economy question. The exotic mortgages that fueled the housing bubble were largely the zero-money-down, ballooning interest variety. They depended on housing values to continue increasing fairly rapidly so that the borrowers could quickly build equity in their homes, then refinance into a fixed-rate mortgage. When the housing bubble burst and people no longer had the equity necessary to refinance out of their old agreements, the ballooning interest rates made their payments unmanageable, forcing many of the borrowers to default. In the ideal world, when the banks who held the mortgages saw that the housing market was collapsing, they should have worked to re-negotiate all those variable-rate deals instead of foreclosing because the mortgaged property would be worth more to the bank if it was occupied and the bank was assured of continuing payments. Instead, the banks DID press thousands of foreclosures, pushing even more homes into a market that was already oversupplied. So, fundamentally, the crisis came about because: (1) banks were offering INCREDIBLY risky loans to people who would never be able to afford them in a non-inflating housing market, and (2) the banks were too stupid to offer fixed-rate compromise deals to their borrowers once they saw that inflexibility would be suicidal. And the reasons that foreclosures are continuing, despite lower gas prices, is that the ripple effects of the credit freeze have caused significant job loss throughout the country. No job = no mortgage payment. That's my two cents.
ReplyDeleteGlobal COOLING?
ReplyDeleteGLOBAL COOLING, WILLIS!
Fie on cooling! Fie on Winter! Fie FIE FIIEE! (I really like the word 'fie'!)
If I never have to wear another sweater in my life, it'll be too soon.
Global cooling indeed.
What are you...Canadian or something?