Just got my quarterly IRA statement. Gak! I’ve been reading that I’m a sucker because I bought and am now holding.  Well, I guess I’m just not a financial playa’.  The flip side of all this financial turmoil is that I now understand much more about the financial system than I ever did before.  Impending doom does do wonders for one’s focus after all.

I was talking to someone close to me, who shall remain nameless to protect his or her privacy, and I was telling him/her that I remembered a few years back when he/she got a LIBOR+margin, interest only loan for his/her house and at the time I had no idea what he/she was talking about.  I misheard "lie-bore" as "lay-bore" and so was befuddled at how my corporate-honcho acquaintance had finagled a loan out of the hated unions.  Well, now I know what the LIBOR is and how cool a loan that really was at the time.  I also mistakenly thought my acquaintance had refinanced with a more traditional loan since then, but was quickly set straight during our chat.  It seems that the loan is very much in place and resets every six months, and in fact just reset on September 30.  The conversation included a "funny if it isn’t your money" story about my acquaintance eating soup at a business lunch a couple of weeks back when someone checked their Blackberry and said, "Holy sh– the LIBOR just went up 7 points" at which point the soup was almost jettisoned.  Luckily the LIBOR dipped again before the reset on September 30 so the rate is at a respectably dismal level until at least April.  Still, the monthly payments on that loan have more than tripled since it was taken out.  At least it’s still affordable for him/her, which some people can’t say.

So I guess you could say that the silver lining of this whole meltdown is that I now know what mortgage backed securities are, what hedge funds are (kind of), what credit default swaps do and, yes, what LIBOR stands for.  Of course that’s kind of like knowing the number of the train that’s about to run you over.