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To say nothing of how he encouraged folks to get into ARMs--you don't have to convince me--I'm in the choir.

I'm not saying don't listen to him. I'm just saying it's often difficult to decide whether he's actually saying something or just putting in the usual Fed Speak/filler. Mostly it's filler.

As to ARMs: in 1988, we bought a house in El Segundo with an ARM entry rate of 9.25%. It's the only way we could have gotten into the house. A couple of years later, the So Cal market went through another of its bust cycles. We were able to keep the house, at one time paying $1,000/mo in principal due to the way the loan was structured. I'll also admit to paying a number of months with option 1: negative amortization. When we bought the house, I was counting on a bout of inflation to ease the payments; never happened. Still, we managed to keep the house. Many years later when things turned south for us (jobs, health) the house held up its end of the bargain and gave us back all those payments we sweated through. It could just as well have been a tragic ending. I'd rather be lucky than good. :)

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