Comments on: Thanks Mr. Greenspan! http://www.savingwithoutabudget.com/miscellaneous/thanks-mr-greenspan/ Saving Lots of Money Is Easy. I'll Show You How. Sun, 25 Jul 2010 03:21:43 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: Dk http://www.savingwithoutabudget.com/miscellaneous/thanks-mr-greenspan/comment-page-1/#comment-47902 Dk Tue, 11 Mar 2008 04:19:02 +0000 http://www.savingwithoutabudget.com/miscellaneous/thanks-mr-greenspan/#comment-47902 It's interesting as I worked in real estate during the very period your discussing, and remember everyone talking about how you should just get the lowest variable rate you can get and just refinance later. That is of course, assuming that you CAN refinance later or even if that really makes any economic sense. Refinancing costs money - and people just assumed they would have a job at the time you need to refinance to be able to afford it - which apparently did not happen causing this crisis. Furthermore, some much of the investment advice I have read suggests you should not pay down your mortgage first before investing in high return investments like the stock market, because by paying off your debt is a lower return. This of course is true, but that advice is good ONLY if you assume you will always have a sound and stable economy. Because obviously if you lose your job, and can no longer afford to pay anything, never mind your stock investments, it's obvious that paying down your debt was more valuable. I guess my point is that, just like in the 1920's, before the last great depression, people have such a rosy "bull market" type of psychology, in which they seem to truly believe nothing bad can happen and that prosperity is a given. Our prosperity has made us so divorced from the possible financial consequences that people lost the ability to create sound financial plans. Unfortunately a great big bear is coming, either way - and after it's aftermath we will be very different people. It’s interesting as I worked in real estate during the very period your discussing, and remember everyone talking about how you should just get the lowest variable rate you can get and just refinance later.
That is of course, assuming that you CAN refinance later or even if that really makes any economic sense. Refinancing costs money – and people just assumed they would have a job at the time you need to refinance to be able to afford it – which apparently did not happen causing this crisis.

Furthermore, some much of the investment advice I have read suggests you should not pay down your mortgage first before investing in high return investments like the stock market, because by paying off your debt is a lower return.
This of course is true, but that advice is good ONLY if you assume you will always have a sound and stable economy.
Because obviously if you lose your job, and can no longer afford to pay anything, never mind your stock investments, it’s obvious that paying down your debt was more valuable.

I guess my point is that, just like in the 1920’s, before the last great depression, people have such a rosy “bull market” type of psychology, in which they seem to truly believe nothing bad can happen and that prosperity is a given.
Our prosperity has made us so divorced from the possible financial consequences that people lost the ability to create sound financial plans.
Unfortunately a great big bear is coming, either way – and after it’s aftermath we will be very different people.

]]> By: Brian Carr http://www.savingwithoutabudget.com/miscellaneous/thanks-mr-greenspan/comment-page-1/#comment-28898 Brian Carr Sun, 12 Aug 2007 12:32:47 +0000 http://www.savingwithoutabudget.com/miscellaneous/thanks-mr-greenspan/#comment-28898 That's a very good point, but they are in a very tough spot. They can't soothe the markets by keeping rates where they are, but they can't drop rates either. While they say they're going to worry about inflation over credit, aren't they creating inflation by pumping cash into the economy? Ugh, I think we're in a very bad spot and unfortunately, not too many people realize it. I think we're going to look back in 50 years and say that Alan Greenspan is one of the worst things to happen to this country. That’s a very good point, but they are in a very tough spot. They can’t soothe the markets by keeping rates where they are, but they can’t drop rates either. While they say they’re going to worry about inflation over credit, aren’t they creating inflation by pumping cash into the economy? Ugh, I think we’re in a very bad spot and unfortunately, not too many people realize it.

I think we’re going to look back in 50 years and say that Alan Greenspan is one of the worst things to happen to this country.

]]> By: J at Not One Cent http://www.savingwithoutabudget.com/miscellaneous/thanks-mr-greenspan/comment-page-1/#comment-28859 J at Not One Cent Sun, 12 Aug 2007 02:50:12 +0000 http://www.savingwithoutabudget.com/miscellaneous/thanks-mr-greenspan/#comment-28859 Well said, except that Bernanke's Fed reversed itself yesterday in humiliating fashion (click my name link if interested). Well said, except that Bernanke’s Fed reversed itself yesterday in humiliating fashion (click my name link if interested).

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