A Time and Place for Adjustable Rate Mortgage

Adjustable rate mortgage (ARM) is a taboo term by now, while the mess in the subprime loan market continues to unfold.

ARM is another financial tool with a purpose for its existence. However, buyers abused it to buy a house they cannot afford, and banks abused it to get unsubstantiated numbers on their balance sheet. We can generalize that bad outcomes in human society is always the result of an abuse of certain power.

ARM is a good option for someone who wants to buy a house in short-term. It allows the buyer to keep more money in the pocket for the period of time with the initial interest rate, while he invests those money in other places for a higher return. There are also various types of ARM to “tweak” the amount of payment. The usual scenario is for the buyer to live in the house for however long before the interest rate reset and then sell it.

Essentially, the buyer must understand that by taking an ARM, he is speculating on an appreciating housing market. If he plans to live beyond the expiration of the initial interest rate, he’s betting on a reset to lower percentage for the interest rate. The ideal scenario is either selling the house before the reset at an appreciated price, or staying in the house with a reset to a lower percentage. It’s neither the case for the people with ARM, which brings us to the current situation.

I wonder if the ARM buyers in default or facing foreclosure thought and understood about ARM when they took the loan. I doubt it though. They were too busy marveling at the house that’s too big for them to afford. I also wonder if the banks made sure that buyers understand ARM. I doubt that too. They were too busy adding all the numbers on their quarterly reports.

But then, perhaps ARM will be a good option for me in the next few years?

Originally posted 2007-12-12 23:12:06. Republished by Blog Post Promoter

Abraham Lincoln’s Predictions?

Two quotes from Abraham Lincoln:

Allow the president to invade a neighboring nation, whenever he shall deem it necessary to repel an invasion, and you allow him to do so whenever he may choose to say he deems it necessary for such a purpose—and you allow him to make war at pleasure.
Abraham Lincoln

I see in the near future a crisis approaching that unnerves me and cause me to tremble for safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic destroyed.
Abraham Lincoln

I feel that Abraham is dead on with what he said (no pun intended), describing what is happening and what will happen, perhaps soon, in the American society.

What do you think?

Originally posted 2007-10-08 10:39:10. Republished by Blog Post Promoter

Don’t Give Up Your Mind

What are we?

What’s the most significant between us and other animals?
We have a mind that allows thorough thought process before we take actions.

Right… if a person take a real close look at the society today, one would wonder if that is necessarily true…

Of course…
Critical thinking is tough.
People don’t like tough.
Thinking requires actual work.
People don’t want to work.
Thinking is boring.
People don’t want to be bored.

It’s so much easier to not think and be told what to do, or just go with the flow.
You can always blame the outside when something doesn’t go well.
No responsibility. No strings attached.
What convenience.
Let’s all give it up!
The mind that is.

But there is a slight problem if you take a look…

Looking at the advertising sector, you can observe the rampant, or shall I said rabid, movement and expansion these days. Remember I talked about why there’s no need for financially aware consumers before? Together with that, another idea that actually encourage the ads companies to continue their push to reach into every corner of consumers’ life is because how little people give thoughts about what they consume.

How are the growth of the ads sector and whether people think related, you may ask? If people don’t give so much thoughts into what products they are buying, what kind of loans they are borrowing, what kind of service they are affording, they are more bound, more easily succumbed to spend money on products they don’t really need, loans that cost them more in the long run, or services that bring little to no significant values. That in turn, allows all the ads campaigns to have such an effectiveness that promotes more use of ads. “It works, why not do it more!” Consumers are letting themselves be told what they “need” when most of the things being marketed are just things they “want”.

Take a look at Apple…
Take a look at all weight-loss programs…
Take a look at all the new drugs coming out…

In addition, if we look at the current society, how many people are not too hesitant to make their voice be heard? But quite often, they are just taking sides without clear thinking or they are simply echoing off each other. They said things but they didn’t say things because there are no substance, no real thinking behind those words. My sincere opinion is that they would not be saying many of those words if they truly see the world and the things that are happening as they really are.

Stress is on the rise.
Depression is on the rise.
Obesity is on the rise.
Nation’s health is on the decline.

Could it be that the whole population has been soaked by the message of materialism, perpetual growth, and flashy life style for too long? That everyone would work work work, in order to earn earn earn, to have lots of money to afford “things”.
Who needs to exercise.
Who needs to spend time with family.
Who needs to hang out with friends.
Who needs to appreciate nature.
Who needs a spiritual life.

Let me end the thought provoking content here, hopefully they are, despite them being very high level
I would not claim myself an expert in the above subjects, but hopefully I got my points across.
Just here to offer my point of view.

And to sum up it up…
You should do your own thinking.
Do not let other people dictate your actions.
Take your life personally and find the values that are important to you.
Understand them, prioritize them.
Then act and live accordingly.
Finally, use your mind wisely.

Originally posted 2007-10-30 01:04:25. Republished by Blog Post Promoter

Truth and Untruth

To fully live, to be in the moment is to recognize reality as it is — in other words, the truth. To recognize truth is also to recognize untruth as a condition of life. To comprehend truth and untruth and their relationship fully is the step beyond good and evil. Having a perception beyond good and evil is where genuine, compassionate living begins.
– Kin

Originally posted 2012-02-27 21:18:28. Republished by Blog Post Promoter

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