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Peter P
2007 Feb 5, 3:50pm
The question should be: are we missing the opportunity of a lifetime.
Isn't that more interesting? ;)
The only opportunity of the lifetime was to sell the house for ridiculously high tax free profit in 2004, 2005, and 2006. That's not gonna happen any time soon. Those guys who refinanced to lower their mortgate payment or cashed out the equity and invested took the small perks but still, they completely missed the opportunity to take a lot of money and run.
The only opportunity of the lifetime was to sell the house for ridiculously high tax free profit in 2004, 2005, and 2006.
Amen to that.
Whoever sold this one really made the right decision:
http://www.burbed.com/2006/11/20/1mil-for-a-bad-acid-trip-in-cupertino/
antibiotics are maybe $15 here :(
there's a chance for arbitrage -- if you're prepared to try to export tons of grey market taxpayer-subsidised drugs from Oz to US in suitcases...
Joe Gargery,
That about sums it up. Look at all the elderly that would normally have been in mmkts or CD's forced into MBS (or ABS) effectively driving down yields even further, ensuring cheaper money for the HB to feed off of?
The seductively low rates have made us wealthier yet more in debt than ever before. I suppose I could beat myself up for not having hung in there longer and sold in '05 but you just had to get the sense that the few extra dollars couldn't possibly be worth the consequences of missing your window. Well said Joe.
Paul,
Spot on about Nuveen, sorry. (I was in a post Super Bowl funk and desperately needing a companion on my mantle for the '05 Sox!) It's just that my P.O box and e-mail are well stuffed each and every day w/new ETF offers. I didn't know Bruce Bond personally but PowerShares had a really nice concept w/the "enhanced indexes" and even nicer staff. I was sorry to hear they'd been bought out by AIM.
newsfreak,
Oh I know it for a fact! I know myself well enough to see I didn't have the stomach to sit there and watch what should have been a very respectable profit wither and die on the vine! (Most of us don't)
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For years the interest rates have been super low. Many argue that we really didn't need them to be so for so long. But that's what they were. Effectively, the cost of money was super low. That sounds like a good thing. At least it should have been a good thing in my naive viewpoint.
But what do we have to show for this ? We as American society, what is that we have done over last few years that we can look back and be proud about. There is little disagreement about how we blew it on a political and fiscal level. But from a non-government angle, just as a capitalistic society, how do we fare ?
As individuals, we seemed to have completely botched the golden chance given to us. Many homeowners could have refinanced their debt to a super low fixed rate for next 30 years, reduced their monthly cash out flow and increased their equity - all in one shot. But rather they chose to gamble with even lower payments to risk higher payments just a few years down the road. They took cash out of their equity - not to invest or start a productive business - but to consume and now don't have much to show for it.
But what did the businesses do ? Did they use this opportunity wisely ? Have they invested the money that might bear fruits down the road. Some of the reports indicate that many companies in the SP500 index have much stronger balance sheets than what they had a few years ago. What role in it was played by cheap money ? Or was it more due to outsourcing and simply a general recovery after a recession 5-6 years ago ?
Or was this even an opportunity ? I think it was. But then do we have anything to show for it ? There has to be something good that came out of this. Or we collectively just simply blew it all away ? On all fronts ?
StuckInBA