Daylight savings time, “risky” mortgages and more bickering

Daylight savings time, “risky” mortgages and more bickering

I hate this time change. My entire live I have always awakened around 5:30 and go to bed between 10-10:30. With this time change I now wake up at 4:30 and cannot go back to sleep. So I just try to lay in bed for another hour. But the dog won’t let me since she is still on the old time. Why can’t we just leave the time alone? Who likes changing their clocks anyway? Tennessee along with Maine, Florida, Alabama, Georgia, Louisiana, Delaware, Colorado, Texas, and Wyoming have voted to permanently observe daylight savings time. For some reason the congress has not approved that change. Federal regulations say that if you lock your clocks then it can only be standard time not daylight savings time. I haven’t a clue why. Currently only Arizona and Hawaii are locked on standard time and don’t have to “spring forward” and “fall back.” So tell me, do you prefer being locked on standard time, locked on daylight savings time or doing the change the time thing?

There have recently been articles talking about the return of “risky” mortgages. At first I thought they were talking about subprime mortgages but no, the articles are about adjustable rate mortgages! Risky? I guess they could be. Adjustable rate mortgages (ARMs) allow borrowing at a lower rate that can become higher in the future. The question is whether the maximum higher rate will imperil the homeowner. Well it is not supposed to. There are regulations in place that set the maximum rate adjustment and how often the rate can be changed. Usually the mortgages reset every five or seven years. The lender is supposed to grant the loan on the calculation that the borrower would still qualify for the loan under the maximum adjustment. Of course, the borrower’s condition might change such as being laid off. But that would risk repayment regardless of whether the mortgages were fixed or adjustable. 

The adjustable rate mortgage may be becoming more attractive now to some borrowers. Currently a 30 year fixed is at 6.15% while a five year adjustable is at 5.45%. Historically, adjustables make up around 3% of total mortgages. Today it is around 10 percent. Also consider that when rates fall that the adjustable mortgage can be refinanced into a fixed rate mortgage. One personal admission: it is widely reported that ARMs originated in 1980 with the Federal Home Loan Bank Board authorizing their use by savings and loan institutions. That is not actually correct. A couple of weeks earlier at the National Credit Union Administration, I suggested we change our lending regulations by removing two words. The regulation stated that loans had to be repaid in roughly equal payments. We removed the words “roughly equal” creating what we called the “variable rate loan.” The Home Loan Bank Board then adopted our rule but applied it to mortgages. So I take the blame for these “risky” mortgages. Maybe I should be blamed for subprime mortgages as well since I was on the board of the nation’s second largest subprime lender, New Century Financial, when that market imploded.

I have written about how Pam (Blondie) Bondi and Karoline Levitt have thrown away the veneer of decorum and have traded insult for insult and invective for invective with democrats and reporters (democrats too). Now we have Treasury secretary Bessent losing it with democrat senators Warren and Klobuchar. The democrats sent a letter saying that Trump was putting Argentina over American farmers. The letter said in part “Instead of prioritizing U.S. farmers and rural communities, the administration has doubled down on aiding Argentina when family farmers are running out of time and cannot continue to endure short-sighted international actions instead of long-term trade stability. We urge you to immediately reconsider further aid to Argentina and to instead focus on restoring and expanding long-term export market access for American farmers.”

Bessent was beside himself and called Warren and Klobuchar “failures” and told them to stop their staffs from writing “incoherent” letters and focus on restarting the government. Here is what he posted on X. “@SenWarren and @SenAmyKlobuchar: you are failures. You failed to derail the electoral success of one of our great allies in Latin America, President @JMilei. He won in a landslide with the poorest members of society voting for economic freedom—a notion anathema in particular to the Senate’s resident American Peronist, Senator Warren.” Resident American Peronist? Wow. I don’t think I have ever seen before this level of derision between a cabinet member and a senator. At least Klobuchar responded with a bit of humor when she tweeted that she and the secretary “have had no public or private personal ‘BEEFS’ (Argentinian or otherwise).”

Things are getting testy. I am beginning to think that the democrats are playing rope-a-dope and are holding out to force the republicans to vote to end the filibuster. That will in essence usher in one party rule when one party controls both the senate and the house and the presidency. Then with the expansion of presidential powers under Trump, a democrat president along with democrat senate and house would have no constraints – other than the courts – to really transform the country into their image. Bye bye electoral college. Pack the Supreme Court. No voter ID. Open borders. Expand Trump’s intrusion into the private sector. Expansion of Obamacare, voter “rights”, climate change, reduce military spending, and increase nondiscretionary spending. I probably left something out. But caveat emptor.