If you own a home, chances are you are racing to refinance and mortgage brokers are calling you. Lots of folks are taking advantage of record low rates on vanilla-flavored 30-year loans. Cash in your pocket! Some are wondering, is it time to pick up a second home? Invest in a downtown condo?
Moreover, oil has crashed and there is little that OPEC or traders on global and virtual exchanges can do about demand reality. Is it time to pull that SUV back out and drive it around town? Maybe take a weekend trip with the kids? (There are lots of hotel deals!)
Is this how its gonna play out? Are we gonna stumble out of this recession and back into our old habits? Remember in about two months the Fed will be writing out a lot of checks. Record spending + cheap money + cheap commodities = ? What do you think? Happy Holidays to all!
December 24th, 2008 at 5:09 pm
Indeed, “It’s an ill wind that blows nobody any good.”
Has the US Government topped up the Strategic Petroleum Reserve, or is that still suspended (as ordered on May 19, 2008)?
December 24th, 2008 at 8:57 pm
Yes, we’ll likely go back into our old spending habits and this is why the Free Market (TM) is not the end-all be-all of economics. The Free Market is sometimes wrong.
Also, SUV’s have had plenty of regulatory breaks over the years to make them even more attractive.
We have been here once before, remember, in the late 1970s, when the automobile industry was cratering because they built lousy ginormous barges. SUV’s are different only in height and weight to a 1978 Dodge Royal Monaco Brougham 4 door sedan.
If we allow the Free Market to decide without regulation what automobile manufacturers make once again, we will face the same crisis again in probably about five to ten years.
The vaunted Invisible Hand has been promoted by people who never read nor understood Adam Smith.
December 25th, 2008 at 10:50 am
Hey David, I was just looking at refinancing when I took a break to read the CCG blogs.
We’re trying to go from 30 year fixed (26 years left on it) to 15 year fixed. Forget the second home and old habits, the new habit is to take advantage of these low offerings to become mortgage free!
Happy Holidays!
December 25th, 2008 at 1:11 pm
Great to hear Sean. I think something on the order of 30% of US homes have no mortgages. Glad to hear of the new habits… I hope you are representative of more and more people.
All the best for 2009.