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Which are a pretty insignificant group at the moment. ARMS should only be used by very sophisticated investors that know what they are doing. They are not very common these days at all.
I think the real failure took place in 2004 when rates were rock bottom, and Greenspan went in front of TV cameras to encourage people to take advantage of ARMs and other exotic mortgages. He helped fuel the housing boom, and rates had nowhere to go but up, and up they went. Millions of people got burned.
He did the opposite of what the Fed claims to be their primary mission: to regulate the markets.
It didn't spur investment. The stock market boom was simply corporate America buying back its own stocks.
NO ..... the stock market boom was the only was too increase capitol for Investors & savers. You sure couldn't increase your savings by letting it sit in a bank with ZERO or next to ZERO interest rates. Back in the "olden days" that the Kiddos don't have a clue about - People put their savings into Certificates of Deposit, I was getting 8.75% return on those C.D.'s with no risk at all. Inflation (that they claim now does not exist) eats at your balance - you need to increase your balance to make your money work.
The Stock Market has done that in the last half dozen years ..... and done it well. Kiddos (and many others) don't "get" that it is also the Stock Market investments by Pensions that is keeping those afloat.
This Era of next to ZERO interest rates has been something we had not seen before - investors (small, medium, large, HUGE) will always find a way to save and grow their capitol.
What has hurt investment is the High Tax Rates on Business and it's forced many of them off-shore. An anti-business White House with it's uncertainty on Feckless Rules, Regulations, Obamacare, Dodd Frank and High Tax has hurt Investments, the economy and the job's market.
for Mtg's it is known rate at the time of purchase... for credit cards or loans that are variable no- this creates the problems if go to high too soon-- and there are more jobs but who got a raise??
They’re poised to spend $914 billion on share buybacks and dividends this year, or about 95 percent of earnings, data compiled by Bloomberg and S&P Dow Jones Indices show. Money returned to stock owners exceeded profits in the first quarter and may again in the third.
Does it look like the low interest rate is encouraging investment?
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You sure couldn't increase your savings by letting it sit in a bank with ZERO or next to ZERO interest rates. Back in the "olden days" that the Kiddos don't have a clue about - People put their savings into Certificates of Deposit, I was getting 8.75% return on those C.D.'s with no risk at all. Inflation (that they claim now does not exist) eats at your balance - you need to increase your balance to make your money work.
I am talking about real investment, not people buying securities. When people buy stocks, they give money to people who will do something with it as in pass buck to the next potential spender; and its not even direct cash flow to capital outlays. And not only this, corporate America itself simply de-leveraged itself from shared equity.
Quote:
The Stock Market has done that in the last half dozen years ..... and done it well. Kiddos (and many others) don't "get" that it is also the Stock Market investments by Pensions that is keeping those afloat.
This Era of next to ZERO interest rates has been something we had not seen before - investors (small, medium, large, HUGE) will always find a way to save and grow their capitol.
What has hurt investment is the High Tax Rates on Business and it's forced many of them off-shore. An anti-business White House with it's uncertainty on Feckless Rules, Regulations, Obamacare, Dodd Frank and High Tax has hurt Investments, the economy and the job's market.
OK again, when an equity buys back its own stock, it is not growing any capital. Its simply cashing in. That means it is not playing poker.
Businesses were going off shore long before Obama became the president. Not that he has done anything about that while president.
If they let the real estate crash that would have done something about it. Its the only thing that could in the long run doing anything about it. If I tell you a hammer is worth renting from me for $10 a day, and you see that with a hammer you could earn an extra $5 a day , then that hammer isn't going anywhere. If I see that hammer sitting around and I start bawling to da guberment, and da gubernment pays me $10 for the hammer, I am not giving the hammer to you at a lower price . So nothing happens except raising the cost of business so that those in the hammer leasing business are preserved, so that one day, they might start leasing hammers again(BS cough , cough).
The Obama fix was to give you $1 a day since you can't hammer anything.
That is our real estate and banking system in bed with our da guberment that is behind American de-industrialization.
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