Negative amortization

2 good articles today about one of the cornerstones of the US credit bubble (nee housing bubble) - the Option ARM. That's a mortgage where the minimum payment doesn't even cover the interest. In other words, you're making your payments but your balance goes up.

• Option-ARMs...FINALLY making the news!
• Exotic Loan Problems 'Inevitable': WSJ

I should also link to another post by the FB author that really spoke to me: MTV Cribs, Bling, and...the housing bubble?!?!?

If the number of people overextending themselves to finance homes, cars, and consumer "lifestyle" items is any indication, I think we will be in for trouble in the long run if we keep extending credit for everything in the world.