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View Diary: CBS News poll: Bush's numbers collapsing (170 comments)

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  •  We've (none)
    About 3 yrs. of stagnant/falling wages.  Health care costs are through the roof.  Gas is high.  Interest rates will go up soon.  Tax refunds weren't as high as expected ($98 more rather than $300 more).  A lot of people realized that $300 check was a refund pre-payment (they had to add it to the tax bill).  I don't see how this will help Bush.  His policies are coming home to roost.

    Rarely is the question asked: Is our children learning? -- G. W. Bush

    by Unstable Isotope on Thu May 13, 2004 at 03:53:06 AM PDT

    [ Parent ]

    •  Interest rates. (none)
      Bingo. The US economy has been feebly struggling to its feet... maybe. Although people don't really judge it by official statistics, they judge it by how many friends, family, and acquaintances have lost their jobs and not found new ones, and by how scared they are personally of losing their own jobs. It takes many months of growth to get people to stop feeling that times are bad.

      But in any case, it's all going to get knocked down again, because as soon as interest rates start going up, the real estate boom that has been sustaining the economy from total collapse is going to burst.

      Accountability. Without it, there is no democracy.

      by Canadian Reader on Thu May 13, 2004 at 04:27:09 AM PDT

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      •  Agree (none)
        Was thinking about this on the way home last night.  If they have artificially inflated the employment numbers, they are backing Greenspan into a corner.  The markets are jumping all over the place in anticipation of a rate increase (especially after the "stronger than expected" employment report).  But if the reports are wrong, how can he make the right decision?  The whole thing is screwed up because of all the misinformation.  

        Of course, "the stock market" does not equal "the economy", but if they raise rates prematurely because of pressure, the housing market will be impacted.  Then all bets are off.

        Let the rabbits wear glasses.

        by out grrl on Thu May 13, 2004 at 06:50:09 AM PDT

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        •  It'll be impacted anyway. (none)
          Even if the reports are right, consumers are over-extended in terms of debt. A lot of people have been surviving unemployment by leveraging the equity they have in their homes to the max. Low interest rates made that feasible.

          Low rates also allowed home-buyers access to much higher mortgages than they would normally be able to afford at their income levels, which drove up house prices. If interest rates increase, buyers won't be able to afford such large mortgages, so those inflated house prices are going to fall. Result: there will be a bunch of people stuck with a mortgage bigger than the resale value of the house.

          This is not good, because interest rates are heading up fairly soon. If they followed Greenspan's recent advice, they'll have a floating-rate mortgage (yes, he really said that!), and won't be able to afford the new higher rate. Even if they have a fixed-rate mortgage, sometimes people have to sell, in which case they'll end up owing money to the bank. Or they might just take a look and decide the hell with it, they're better off to default on that huge mortgage and give the house keys to the bank.

          So. Any way you slice it, there's trouble ahead in the real estate sector.

          And these are matters that really hit people hard. Losing your home... for most people, there's just no bigger indication of bad times than that.

          Who are they going to blame?

          Accountability. Without it, there is no democracy.

          by Canadian Reader on Thu May 13, 2004 at 08:59:35 AM PDT

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          •  Blame (none)
            Blame?  Why, Bill Clinton of course!  

            Compound the rel estate devaluation with  imminent inflation and wage stagnation (or decrease) and you are putting a lot of families very close to the edge of disaster.  For the life of me, I can't imagine what Greenspan was thinking when he recommended variable rate mortgages.  Anyone who took that advice and isn't paying close attention to rate fluctuations (like most American families) is going to get hosed.  

            Every time I hear talking heads go on and on about how the housing market will survive because "this is different", I think back to the heyday of the internet bubble when all the talking heads were telling us "this is different".

            Let the rabbits wear glasses.

            by out grrl on Thu May 13, 2004 at 10:06:15 AM PDT

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            •  What was Greenspan thinking? (none)
              Well, I heard about this on "Marketplace." I forget who it was talking about it, but the only guess the expert could offer was that Greenspan was worried about the effect on lenders who could get stuck with all these very low fixed-rate mortgages, so he was trying to convince consumers to act against their own interests.

              I'm not sure how many people listened to him. I mean, if they're naive enough to buy this line of hooey, would they even know who Greenspan is, or why he's important?

              By the way, I remember the 1970's. When credit is tight and interest rates are really shooting up, with no end in sight, mortgage lenders don't beg you to take a floating rate, they tell you that's all you're gonna get. Nope, no fixed-rate mortgages available at any price. If you don't like it, sorry, you don't get to buy the house.

              Accountability. Without it, there is no democracy.

              by Canadian Reader on Thu May 13, 2004 at 12:00:54 PM PDT

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              •  Greenspan (none)
                Greenspan has been touted as a genius for so long that there are probably a number of people who listen to him.  People who really don't know that much about markets and rates who are doing a little digging around before taking out a mortgage (now that we have the internet this is a pretty easy exercise) could read and respond to those commnets. IMO they were reckless.  If they were tied to serving the interests of lenders, then he should be dragged out to explain exactly what his motivations are and exactly who it is that he calls "master".

                Let the rabbits wear glasses.

                by out grrl on Thu May 13, 2004 at 12:11:41 PM PDT

                [ Parent ]

                •  I just tried a google search (none)
                  The search terms mortgage rates fixed floating

                  yielded 70,000 pages. Adding greenspan found just 2,090 pages. So only about 3% of the pages in that (probably fairly typical) search request would have included any reference to Greenspan. I didn't spot any reference included on the first page of search results.

                  In the second search, I did find this source that gives more detail about what Greenspan actually said.

                  I've got to say, if I were trying to make up my mind on this question based on what I found in the first search, I would be very confused. There were a lot of lender-sourced documents purporting to prove that floating rates are just, ooh, way better, but I didn't find any site that clearly explained the decision tree depending on what you think is going to happen to interest rates, and when. I'm sure a more focused search could have found something. I'm not going to spend the time today, though -- I have an 'adequate for current needs' understanding of the issue already, and no plans to take out a mortgage any time soon.

                  Where was I going with this? Oh yes. The above admittedly cursory investigation suggests to me that the problem of misinformation is way bigger than Greenspan. But he still shouldn't have said it.

                  Accountability. Without it, there is no democracy.

                  by Canadian Reader on Thu May 13, 2004 at 01:13:15 PM PDT

                  [ Parent ]

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