Race bating. Now there's a troll we don't see very often.

He, of all people, should know that with great power comes great responsibility.

Fun Dumpster: He, of all people, should know that with great power comes great responsibility.

That would be Spider-Man. In Ben's case it's more like "with great power comes great power".

I feel so stupid for having worked and done without to pay off my house in 1/2 the mortgage term, saving money for my kids college, paying cash or mostly for all my vehicles, paying off credit cards every month. What a dummy. I should have lived it up and thrown my money around and then have Uncle Sugar bail me out. Instead all I'm going to get is higher taxes on my Social Security and pension funds, longer waits and less treatment options on Medicare that I paid into for all my working life. What a dummy!

ParadigmLeftShift: In Ben's case it's more like "with great power comes great power Lots o' cashola".

I feel so stupid for having worked and done without to pay off my house in 1/2 the mortgage term

Paying off your mortgage early is almost always stupid.

GomezAdams: I feel so stupid for having worked and done without to pay off my house in 1/2 the mortgage term, saving money for my kids college, paying cash or mostly for all my vehicles, paying off credit cards every month. What a dummy. I should have lived it up and thrown my money around and then have Uncle Sugar bail me out. Instead all I'm going to get is higher taxes on my Social Security and pension funds, longer waits and less treatment options on Medicare that I paid into for all my working life. What a dummy!

How do you figure you're getting "higher taxes on my Social Security and pension funds, longer waits and less treatment options on Medicare?"

[Soapbox]

JESUS farkING CHRIST. WERE YOU NOT PAYING ATTENTION IN JAPAN. THIS shiat DIDN'T WORK IN JAPAN. WHY THE fark DO YOU THINK IT WILL WORK HERE

[/soapboax]

This will end badly.

karasoth: [Soapbox]

JESUS farkING CHRIST. WERE YOU NOT PAYING ATTENTION IN JAPAN. THIS shiat DIDN'T WORK IN JAPAN. WHY THE fark DO YOU THINK IT WILL WORK HERE

[/soapboax]

Many economists believe that once Uncle Ben saw how rotten the whole financial system was, he came to three possible outcomes. 1: Great Depression 2.0; 2: Zimbabwe; 3: Lost Decade.

Of those three, a lost decade is the very best we can hope for. It's unclear if he can thread the needle, or if things go from bad to Madmax style Farked up.

Oh, by the way,

Yes, this is clearly and beyond all reasonable doubt solely and exclusively George Bush's fault. The problem and its causes are not complicated; nor did they develop over a long period. I believe GW decided screw up the economy after one of his many coke binges in his second term.

/Had to be said
//this is Fark after all

Crosshair: Greenspan was the one who blew up the .com bubble with interest rates too low for conditions and then blew up the housing bubble again by having interest rates too low.

Bush could not have done anything without Greenspan. Bush may have ramped up the deficit, but we would not have gotten the housing bubble had Greenspan not lowered rates.

Definitely. I can be angry at Bush for leveraging the deficit so much during relative prosperity and lowering taxes at a time of war, which made fighting the current recession even harder.

I really don't get it. If there's any time the country would have happily accepted a tax increase, it was after 9/11. No one would have complained.

He's pushing a string as it were. The banks have money to loan but nobody wants to take out a loan. If the loans don't start flowing the deflation we are experiencing will continue. They are already talking about another stimulus package. Unless the "animal spirits" take over soon to get things going we are headed towards a Japan-esque lost decade(s) best case. Worse case we are in the equivalent of 1933 and headed into a depression.

I don't agree with Krugman all of the time, but even if the recovery starts today it is years away from it being "good times".

McFnord: Race Rice bating. Now there's a troll we don't see very often.

FTFY

FarkIlk01: He's pushing a string as it were. The banks have money to loan but nobody wants to take out a loan. If the loans don't start flowing the deflation we are experiencing will continue. They are already talking about another stimulus package. Unless the "animal spirits" take over soon to get things going we are headed towards a Japan-esque lost decade(s) best case. Worse case we are in the equivalent of 1933 and headed into a depression.

I don't agree with Krugman all of the time, but even if the recovery starts today it is years away from it being "good times".

Would you rather have deflation leading to a depression, or trillion dollar bills with an expiration date on them?

/we can't fit any more zeros on our money, time to lop off a few
//hoping for pretty much anything other than those two choices

Let's get to the important issues: what impact is this going to have on mortgage rates today? Because I'm taking out a mortgage rather nowish, and I'm hoping that banks, seeing the low inter-bank lending rate for another 6 months, are willing to cut a sweetheart deal on a 15-year mortgage.

kittyhas1000legs: Would you rather have deflation leading to a depression, or trillion dollar bills with an expiration date on them?

I have to go with rapid inflation over a couple of years and a new currency being issued rather than the slow death of deflation over a couple of decades.

It remains to be seen which happens, but I haven't read a realistic hyper-inflation scenario so I'm in the deflationary camp for now; though right on the edge.

How the fark does this racist crap get greenlit?

Senescent Dawn: Crosshair: Greenspan was the one who blew up the .com bubble with interest rates too low for conditions and then blew up the housing bubble again by having interest rates too low.

Bush could not have done anything without Greenspan. Bush may have ramped up the deficit, but we would not have gotten the housing bubble had Greenspan not lowered rates.

Definitely. I can be angry at Bush for leveraging the deficit so much during relative prosperity and lowering taxes at a time of war, which made fighting the current recession even harder.

I really don't get it. If there's any time the country would have happily accepted a tax increase, it was after 9/11. No one would have complained.

Alcoholics and addicts use every situation to justify their addictions: TAXCUTSGARBL!

I can has CD above 3%?

No, not mine.. :(

Why can't I get a car loan at 0%? Who is getting this free money?

SpyroChiro: Why can't I get a car loan at 0%? Who is getting this free money?

That's what I want to know. I would love to be able to consolidate all of the money I owe into one zero interest loan. That would be sweet but I doubt that the zero interest loans are for us. They are probably only for organizations that are "Too big to fail". Also why do we still have things that are "Too big to fail". Wouldn't it be safer for us not to have those?

SpyroChiro: Why can't I get a car loan at 0%? Who is getting this free money?

Isn't the 0% rate the Federal funds rate, the interest charged between banks when they borrow money overnight to settle their books? Or something like that?

SpyroChiro: Why can't I get a car loan at 0%? Who is getting this free money?

Banks are. Banks can lend to other banks with nearly 0% interest. Because we have a partial reserve banking system, this means a bank with $10,000 can lend $90,000 of invisible money to another bank. This causes inflation ($10,000 just turned into $100,000). High interest rates discourage this, low interest rates encourage this.

In a remote sense, it does impact your lending rates- while you won't get a 0% mortgage, you can get incredibly low rates on a 15 year mortgage (I'm mortgage shopping as we speak). It's a "trickle-down" effect- banks can essentially print money at no cost to themselves, which makes them more generous with loans.

It's also going to trigger yet more inflation, and as people have suggested, it will probably send us into a "lost decade"- at best.

Morons, we did not go through an inflationary period with this recent recession. Comparing the recession to hyper inflation in the Wiemar Republic or Zimbabwe is moronic. You're looking at the wrong side. The US recession was deflationary, it resembled the Great Depression where, stupidly, the Federal Reserve actually hiked interest rates up rather than lowering them.

Additionally, the target rate is the overnight rate between member banks, not the rate the Fed charges banks as a lender of last resort.

andrew131: Wiemar Republic

Weimar...

ZOMG I SPEELD IT WRONG!!!!

FarkIlk01: He's pushing a string as it were. The banks have money to loan but nobody wants to take out a loan. If the loans don't start flowing the deflation we are experiencing will continue. They are already talking about another stimulus package. Unless the "animal spirits" take over soon to get things going we are headed towards a Japan-esque lost decade(s) best case. Worse case we are in the equivalent of 1933 and headed into a depression.

I don't agree with Krugman all of the time, but even if the recovery starts today it is years away from it being "good times".

Yeah, his liquidity trap ramblings have been most interesting. I still wonder if the FDIC doing what I see as their job and cleaning up the banking industry by recycling BofA and Citi (to start) would prove helpful. The way things are now with those two, they have an almost unquenchable thirst for capital so out of whack are their balance sheets.

t3knomanser: Banks are. Banks can lend to other banks with nearly 0% interest. Because we have a partial reserve banking system, this means a bank with $10,000 can lend $90,000 of invisible money to another bank.

If only it were that good. 10.3 cash to reserve ratio is only required of depository institutions with more than $43.9 million in net transaction accounts and does not apply to corporate, foreign, or government deposits.

The loan multiplier is actually 133.33x, which means that for every dollar deposited in a bank only .75% must be kept in reserve; about three quarters of a penny! Or to look at it another way, for every dollar you deposit the bank can loan out $133.33.

This is from the Feds own numbers in December of 2008.

Total bank deposits: $7189 billion
Reserve requirements: $53.7 billion
Reserve ratio: .75 percent
Loan multiplier: 133.33x

That's not to say all banks were leveraged to the maximum, but I'm guessing some approached the threshold since banks are going down every week. With that much leverage it doesn't take much to make the house of cards fold.

ghare
How do you figure you're getting "higher taxes on my Social Security and pension funds, longer waits and less treatment options on Medicare?"

The higher taxes on SS and retirement savings has already been promised by the Guy In The White House^tm. Again, stupid me for saving enough back that now I'm a target for taxes on my savings - which a lot of them were taxed mostly when I earned them. Plus my pre-tax savings in 401Ks and the like are going to get hit because I didn't want to be on welfare and food stamps living under a bridge when I retired. Stupid me. I could claim to be an illegal alien in another year or so and get full benefits without ever paying into the system. Also spoken of by that Changie Hopie/Hopie Changie Dude in the WH.

I took a friend to a gubbment run health clinic last week and it's what Managed Health Care will look like in the future. There were more paper pushers than health care people and all of them were in the pipeline before you could get services.

Snarcoleptic_Hoosier
That'll teach you to have foresight and reasonable financial planning. I bet you bathe daily and speak in reasonable terms. You, good sir, talk like a fag and your shiats all messed up.

It's because I grew up in Terre Haute, IN. All those Midwestern work ethics I was forced to adapt to. Is it too late to file child abuse charges? Become self sufficient and help your neighbors. That's what gubbmint's for. And maybe too because I worked in E'ville once upon a time at WROZ (Town and Country) as the night time DJ high on the corner of 3rd and Main.

My mortgage lender sent me a refinancing offer yesterday, which would increase my monthly payment by $60, but pay the principal off 8 years earlier and save me almost $150k in interest.

Trying to figure out what the catch is -- does Citi really need my $60/mo so badly now that they're willing to give up an average of $380/mo from me over the next 28 years?

FarkIlk01: That's not to say all banks were leveraged to the maximum, but I'm guessing some approached the threshold since banks are going down every week. With that much leverage it doesn't take much to make the house of cards fold.

Some of them were far in excess of that, but given the numbers are from 12/08 I wonder if that includes houses who remade themselves into banks so they could get access to Fed funds. Looking at Lehman's leverage, and why both BofA and Barclays went screaming from the room when they evaluated their books, you do get that yeah they saw the cost of funds as a trivial matter, and since they had all that shiny math showing them they had factored risk out of the equation... My personal fave was Bear Sterns having "hedge" funds that only invested in one type of security (great hedging strategy there), some of which just tanked while others tanked with malice, and wondered why the repo markets forced a run on the bank.

Dear Jerk: Paying off your mortgage early is almost always stupid.

Real, honest question here: Why?

If you have no other debt (which you should pay off first, duh), doesn't the gain of not having to pay interest more than offset the tax break?

poot_rootbeer: My mortgage lender sent me a refinancing offer yesterday, which would increase my monthly payment by $60, but pay the principal off 8 years earlier and save me almost $150k in interest.

Trying to figure out what the catch is -- does Citi really need my $60/mo so badly now that they're willing to give up an average of $380/mo from me over the next 28 years?

Maybe they think inflation will make that amount worthless in the long run. if you owe 100/month for 10 years, but in 3 years, inflation bumps it x10, you are only really paying 10/month.

poot_rootbeer: My mortgage lender sent me a refinancing offer yesterday, which would increase my monthly payment by $60, but pay the principal off 8 years earlier and save me almost $150k in interest.

Trying to figure out what the catch is -- does Citi really need my $60/mo so badly now that they're willing to give up an average of $380/mo from me over the next 28 years?

I bet the answer to your question is moving from a fixed rate to variable rate. The general idea is that WHEN(notice this word) the rates start to increase, they are probably going to be needed quickly and in chunks to prevent the massive inflation on the horizon(think 1970's).

So if this is the case, the bank is telling you, they will accept 60$ more a month to convert the mortgage to variable and risk the chance that you wont be able to pay it off before the rates go up enough that they can make more interest faster. They still might lose overall interest wise (less than 150k) but if they get some in a faster time period they can then reloan out the money they leant you at a higher rate conveniently at the time the rates will be at decade highs/climbing.

/hopes you followed that.

RedThree: Dear Jerk: Paying off your mortgage early is almost always stupid.

Real, honest question here: Why?

If you have no other debt (which you should pay off first, duh), doesn't the gain of not having to pay interest more than offset the tax break?

Meh, cost of funds, allocation of resources, etc. To me, I am with you in that I HATE DEBT. Keeps me up at night and all of that. However, if you have a mortgage at X% (fixed, I hope) but you can invest the money you would use to pay off the mortgage at something greater than X, then yeah you can leverage your way to prosperity. This presumes a few things: Your house does not go down in value, you keep your job, your investments pay off, and etc. Like I said though... while I find debt a useful and at times necessary tool, I HATE DEBT.

RedThree: doesn't the gain of not having to pay interest more than offset the tax break?

Because your interest rate is likely lower than the rate of return you could get from investments. Right now, if you took out a 30 mortgage, you're talking about a 5ish% interest rate. A 5% rate of return is easily beat, over 30 years. A decent mutual or index fund is going to be able to get you between 8-12% easy, if not better.

Essentially, you can make more money by investing than you save by not paying interest, if you're working on a long timeline. That said, the market is volatile, so depending on when you pull out your money, you may actually do worse, but on average, investments are going to beat paying down interest.

Also, keep in mind the fact that as you pay down a loan, you're paying less and less interest. A few years into a loan, your mortgage payment is mostly interest, but as you chip away at the principle, the amount of interest you're paying is decreasing. By the last few years of the loan, you're paying next to nothing on interest.

Too bad nobody reports that Helicopter Ben has been grounded the past year.
Since TARP began 1 year ago, our money supply (M3) has increased a measly 1.1 % !
Yes, that's right, 1.1% . Why will you never hear this on Fox ? Because you can't scare anyone with 1.1 % !

Not that the Fed isn't trying, but because banks have contracted lending so much, the Fed can't juice the economy.

Most of my credit repair clients come from loan officers and mortgage brokers. Lending requirements keep getting stricter every month, banks just flat out do not want to lend, to anybody, period.

Snarcoleptic_Hoosier: GomezAdams: I feel so stupid for having worked and done without to pay off my house in 1/2 the mortgage term, saving money for my kids college, paying cash or mostly for all my vehicles, paying off credit cards every month. What a dummy. I should have lived it up and thrown my money around and then have Uncle Sugar bail me out. Instead all I'm going to get is higher taxes on my Social Security and pension funds, longer waits and less treatment options on Medicare that I paid into for all my working life. What a dummy!

That'll teach you to have foresight and reasonable financial planning. I bet you bathe daily and speak in reasonable terms. You, good sir, talk like a fag and your shiats all messed up.

Fag? He said nothing about riding a Harley.

Where do you get these zero interest loans?

I'll take a couple billion. Oh what the heck make it a couple hundred billion.

NewportBarGuy: This couldn't possibly create some kind of asset bubble, could it? Nahhhhhhhhhhhhhhhhh...

Looks like it isn't, so far. Most of that money they lend the banks for free is being used to buy treasury bills, which become the free money they lend to banks.

It's the beginnings of a currency bubble, if anything.

As for not paying off a mortgage, here's my IMHO on what to do with your money, in order:

1. Never take out a debt over 12%. And always make minimum payments on time.
2. Fund your 401(k) enough to get all company match.
3. Roth IRA (5k)
4. Payoff debts over 8%
5. Fully fund 401(k) (15k)
6. payoff unsecured debt over 4%
7. invest anything that's left.

poot_rootbeer: My mortgage lender sent me a refinancing offer yesterday, which would increase my monthly payment by $60, but pay the principal off 8 years earlier and save me almost $150k in interest.

Trying to figure out what the catch is -- does Citi really need my $60/mo so badly now that they're willing to give up an average of $380/mo from me over the next 28 years?

Take a look at the deal they're offering. I'm guessing there are 'fees', 'costs', and/or 'points' associated with the refi, which is where they make their money. Depending on the terms of the old loan vs the new, you might be able to just send in an extra $60 each month to apply to the principle and get the same effect.

Dear Jerk: As for not paying off a mortgage, here's my IMHO on what to do with your money, in order:

Sound rules. I am paranoid of all things related to debt, so mine has always been:
1) Pay debt
2) Invest
3) Eat

t3knomanser: Because your interest rate is likely lower than the rate of return you could get from investments. Right now, if you took out a 30 mortgage, you're talking about a 5ish% interest rate. A 5% rate of return is easily beat, over 30 years. A decent mutual or index fund is going to be able to get you between 8-12% easy, if not better.

Essentially, you can make more money by investing than you save by not paying interest, if you're working on a long timeline. That said, the market is volatile, so depending on when you pull out your money, you may actually do worse, but on average, investments are going to beat paying down interest.

Also, keep in mind the fact that as you pay down a loan, you're paying less and less interest. A few years into a loan, your mortgage payment is mostly interest, but as you chip away at the principle, the amount of interest you're paying is decreasing. By the last few years of the loan, you're paying next to nothing on interest.

IMO it's best to do a little of both. If you could show me an investment that was 100% guaranteed with 5-6% return on my money I would throw money at it as hard as I can. That's essentially what paying off my mortgage is. Sure, I still invest in my 401k and other savings/retirement accounts, but the *hope* of getting 8-10% growth on risky investments hardly compares to a guaranteed 5-6%.

Dear Jerk: As for not paying off a mortgage, here's my IMHO on what to do with your money, in order:

1. Never take out a debt over 12%. And always make minimum payments on time.
2. Fund your 401(k) enough to get all company match.
3. Roth IRA (5k)
4. Payoff debts over 8%
5. Fully fund 401(k) (15k)
6. payoff unsecured debt over 4%
7. invest anything that's left.

Your list fails to include beer, therefore it does not belong on Fark.

the_geek: Dear Jerk: As for not paying off a mortgage, here's my IMHO on what to do with your money, in order:

1. Never take out a debt over 12%. And always make minimum payments on time.
2. Fund your 401(k) enough to get all company match.
3. Roth IRA (5k)
4. Payoff debts over 8%
5. Fully fund 401(k) (15k)
6. payoff unsecured debt over 4%
7. invest anything that's left.

Your list fails to include beer, therefore it does not belong on Fark.

Some of the beer people drink, or parrot that they drink, is expensive enough it should be considered an investment. Just saying...