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August 13, 2008 at 9:05 PM in reply to: Buying next year, what to do with down payment money? #256869August 13, 2008 at 9:05 PM in reply to: Buying next year, what to do with down payment money? #256875
EconProf
ParticipantAll of us are bemoaning the low interest rates on savings. This is another blow to the Americans who save rather than spend, and is a direct result of the Bernanke/Greenspan policy of helping the underwater lenders. Today’s Wall Street Journal had a good article about how enforced low interest rates are an underhanded way of helping banks by helping their spreads–the difference between their cost of funds and their lending rates. It has added directly to their profits of late, and it does so by taking it out of the hide of the few remaining Americans who actually save up for purchases, retirement, etc.
Some of these same policy-makers admonish us for not saving enough compared to the Japanese, europeans, and Chinese. Yet when inflation and taxes are taken into account, the real rate of return on even the best CDs is about a minus 3% per year.August 13, 2008 at 9:05 PM in reply to: Buying next year, what to do with down payment money? #256933ParticipantAll of us are bemoaning the low interest rates on savings. This is another blow to the Americans who save rather than spend, and is a direct result of the Bernanke/Greenspan policy of helping the underwater lenders. Today’s Wall Street Journal had a good article about how enforced low interest rates are an underhanded way of helping banks by helping their spreads–the difference between their cost of funds and their lending rates. It has added directly to their profits of late, and it does so by taking it out of the hide of the few remaining Americans who actually save up for purchases, retirement, etc.
Some of these same policy-makers admonish us for not saving enough compared to the Japanese, europeans, and Chinese. Yet when inflation and taxes are taken into account, the real rate of return on even the best CDs is about a minus 3% per year.August 13, 2008 at 9:05 PM in reply to: Buying next year, what to do with down payment money? #256981ParticipantAll of us are bemoaning the low interest rates on savings. This is another blow to the Americans who save rather than spend, and is a direct result of the Bernanke/Greenspan policy of helping the underwater lenders. Today’s Wall Street Journal had a good article about how enforced low interest rates are an underhanded way of helping banks by helping their spreads–the difference between their cost of funds and their lending rates. It has added directly to their profits of late, and it does so by taking it out of the hide of the few remaining Americans who actually save up for purchases, retirement, etc.
Some of these same policy-makers admonish us for not saving enough compared to the Japanese, europeans, and Chinese. Yet when inflation and taxes are taken into account, the real rate of return on even the best CDs is about a minus 3% per year.ParticipantThis happens a lot, which is one argument for applying for two parrallel loans. Then, when closing time approaches, they can’t pull costly surprises like this. You can bolt.
They knew they had you in a bind and had to go forward. You had no negotiating leverage. Yes, it costs extra to have such backup…I believe just the cost of another appraisal.
Any other Piggs ever try this? I have not, but have seen it advocated.ParticipantThis happens a lot, which is one argument for applying for two parrallel loans. Then, when closing time approaches, they can’t pull costly surprises like this. You can bolt.
They knew they had you in a bind and had to go forward. You had no negotiating leverage. Yes, it costs extra to have such backup…I believe just the cost of another appraisal.
Any other Piggs ever try this? I have not, but have seen it advocated.ParticipantThis happens a lot, which is one argument for applying for two parrallel loans. Then, when closing time approaches, they can’t pull costly surprises like this. You can bolt.
They knew they had you in a bind and had to go forward. You had no negotiating leverage. Yes, it costs extra to have such backup…I believe just the cost of another appraisal.
Any other Piggs ever try this? I have not, but have seen it advocated.ParticipantThis happens a lot, which is one argument for applying for two parrallel loans. Then, when closing time approaches, they can’t pull costly surprises like this. You can bolt.
They knew they had you in a bind and had to go forward. You had no negotiating leverage. Yes, it costs extra to have such backup…I believe just the cost of another appraisal.
Any other Piggs ever try this? I have not, but have seen it advocated.ParticipantThis happens a lot, which is one argument for applying for two parrallel loans. Then, when closing time approaches, they can’t pull costly surprises like this. You can bolt.
They knew they had you in a bind and had to go forward. You had no negotiating leverage. Yes, it costs extra to have such backup…I believe just the cost of another appraisal.
Any other Piggs ever try this? I have not, but have seen it advocated.August 12, 2008 at 4:24 PM in reply to: Buying next year, what to do with down payment money? #256180ParticipantMy condolences on your market losses. This market has humbled a lot of people lately, myself included. FWIW, even the pros are getting clobbered: Buffett, previously high-flying hedge funds, Carl Ichan, Calpers, etc.
I’d stick to CDs, money market funds in safe institutions. Yes, you’ll be behind considering inflation and taxes, but that’s today’s environment.August 12, 2008 at 4:24 PM in reply to: Buying next year, what to do with down payment money? #256360ParticipantMy condolences on your market losses. This market has humbled a lot of people lately, myself included. FWIW, even the pros are getting clobbered: Buffett, previously high-flying hedge funds, Carl Ichan, Calpers, etc.
I’d stick to CDs, money market funds in safe institutions. Yes, you’ll be behind considering inflation and taxes, but that’s today’s environment.August 12, 2008 at 4:24 PM in reply to: Buying next year, what to do with down payment money? #256362ParticipantMy condolences on your market losses. This market has humbled a lot of people lately, myself included. FWIW, even the pros are getting clobbered: Buffett, previously high-flying hedge funds, Carl Ichan, Calpers, etc.
I’d stick to CDs, money market funds in safe institutions. Yes, you’ll be behind considering inflation and taxes, but that’s today’s environment.August 12, 2008 at 4:24 PM in reply to: Buying next year, what to do with down payment money? #256368ParticipantMy condolences on your market losses. This market has humbled a lot of people lately, myself included. FWIW, even the pros are getting clobbered: Buffett, previously high-flying hedge funds, Carl Ichan, Calpers, etc.
I’d stick to CDs, money market funds in safe institutions. Yes, you’ll be behind considering inflation and taxes, but that’s today’s environment.August 12, 2008 at 4:24 PM in reply to: Buying next year, what to do with down payment money? #256423ParticipantMy condolences on your market losses. This market has humbled a lot of people lately, myself included. FWIW, even the pros are getting clobbered: Buffett, previously high-flying hedge funds, Carl Ichan, Calpers, etc.
I’d stick to CDs, money market funds in safe institutions. Yes, you’ll be behind considering inflation and taxes, but that’s today’s environment.August 12, 2008 at 4:24 PM in reply to: Buying next year, what to do with down payment money? #256471ParticipantMy condolences on your market losses. This market has humbled a lot of people lately, myself included. FWIW, even the pros are getting clobbered: Buffett, previously high-flying hedge funds, Carl Ichan, Calpers, etc.
I’d stick to CDs, money market funds in safe institutions. Yes, you’ll be behind considering inflation and taxes, but that’s today’s environment. -
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