shogun32
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I appreciate the explanation. My point was the video guy was supposed to explain it. Not you.
And this scheme only works if the asset price increases. Which for supercars may be a sure thing. But the housing crash of 2008 in particular and the house+car implosion of 2024 will be because of this very practice and prices do the unthinkable - ie go down. Or the flip side, interest rates go up instead of down.
When rates go down for 20 years every Corp and poor schmuck can crank the loan outstanding but keep the same monthly payment. When rates go up, even a tiny bit and they reroll, they discover they can't make the monthly. Big oops!
And this scheme only works if the asset price increases. Which for supercars may be a sure thing. But the housing crash of 2008 in particular and the house+car implosion of 2024 will be because of this very practice and prices do the unthinkable - ie go down. Or the flip side, interest rates go up instead of down.
When rates go down for 20 years every Corp and poor schmuck can crank the loan outstanding but keep the same monthly payment. When rates go up, even a tiny bit and they reroll, they discover they can't make the monthly. Big oops!
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