I’m a little late on the game with this one, so this is admittedly more for myself, but I wanted to sort through some of the terms that are helping me not glaze over at most headlines these days…Embarrassed to admit I didn't know the meaning of these terms BEFORE they became passe in the mouths of CNN anchors...
Core Inflation: a measure of inflation that excludes certain items that face volatile price movements (right now that would be energy/oil and food prices)
Headline Inflation: a measure of total inflation – it’s all in there, so might not be as accurate a figure of long-term inflation, although the WSJ’s Real Time Economics blog begs to differ and elsewhere the paper notes Bernanke’s increasing swap with core inflation
Fixed Rate Mortgage: locks in one rate for a fixed period of time (usually 30 years)
Adjustable Rate Mortgage: locks in a rate for a shorter period of time (usually 3 to 5 years), when the rate will adjust
“Securitization” of Loans: A lender groups together a package of various individual loans and sells them to another investor; All the risk is still there, but less transparent
“Subprime” Borrower: a borrower with a riskier profile
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