1170
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 12 Feb 2024
1170 points (98.8% liked)
News
35849 readers
600 users here now
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious biased sources will be removed at the mods’ discretion. Supporting links can be added in comments or posted separately but not to the post body. Sources may be checked for reliability using Wikipedia, MBFC, AdFontes, GroundNews, etc.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source. Clickbait titles may be removed.
Posts which titles don’t match the source may be removed. If the site changed their headline, we may ask you to update the post title. Clickbait titles use hyperbolic language and do not accurately describe the article content. When necessary, post titles may be edited, clearly marked with [brackets], but may never be used to editorialize or comment on the content.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials, videos, blogs, press releases, or celebrity gossip will be allowed. All posts will be judged on a case-by-case basis. Mods may use discretion to pre-approve videos or press releases from highly credible sources that provide unique, newsworthy content not available or possible in another format.
7. No duplicate posts.
If an article has already been posted, it will be removed. Different articles reporting on the same subject are permitted. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners or news aggregators.
All posts must link to original article sources. You may include archival links in the post description. News aggregators such as Yahoo, Google, Hacker News, etc. should be avoided in favor of the original source link. Newswire services such as AP, Reuters, or AFP, are frequently republished and may be shared from other credible sources.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.
founded 2 years ago
MODERATORS
It's called a secured loan. And a house secured loan (aka mortgage) isn't as good as a stock secured loan.
Stock secured loans rates were basically zero for quite a few years. I think this is why all the venture capital suddenly dried up. Both owning a stock AND taking out a loan based on that stock at 0.25% APR is an insane deal. A year of interest on a million dollars is $2,500. And the stock you're holding will outperform that. After a few years you just sell a bit of the stock to continue paying the interest of the loan.
Now that the interest rates are 6-7% things are different. Suddenly your yearly payment on that million dollar loan is $65,000 instead of $2,500. And your stock may not make 6% this year to pay for it.
It's kind of a miracle this return to reality didn't cause more of a collapse.
I agree that mortgage rates didn't drop to that level, but the same sort of trick worked on them. House prices were rising at anything up to 10% per annum, well above the mortgage rate, so you could refinance regularly, probably reduce your Loan to Value level, and also free up more capital to pay off the upcomming interest payments.
As you say, these methods have pretty much stopped working as the growth and interest figures have flipped. I don't see much of a risk of a true market collapse though as there are simply too many powerful people and institutions with too much to lose if that happened. It could be rather turbulent for the rest of us though.