The Outer Limits of Stupidity

From the much esteemed New York Times, we have Bob Tedeschi writing about It Seemed Like a Good Bet at the Time...

FOR Inga Rogers, the party ends in 38 days.

On Nov. 1, the adjustable-rate mortgage, or ARM, she took out three years ago at the spectacular rate of 3.875 percent will get considerably more expensive. Ms. Rogers, a single mother of two living in a three-bedroom ranch in suburban Boston, faces a rate increase of three percentage points, raising her monthly house payment by $300, to $1,419, and putting her at a financial crossroads.

Her choices: keep the loan and run the risk of future increases, or ditch her adjustable mortgage in favor of a more stable loan with a higher monthly payment.

Ms. Rogers, a hairstylist working 32 hours a week, will have to work more in either case. The 6.85 percent 30-year fixed-rate loan she is considering would cost $100 a month more than her higher ARM payment, but it would at least protect her from future increases that could go far higher.

“I still might not be able to make the extra money, because with my job I don’t have a set income,” she said. “So I have an adjustable salary, too. My whole life is a roller coaster.”

Firstly, why the fuck is someone with an "adjustable salary", as she so euphemistically puts it, buying a house?

Secondly, how close to the financial precipice do you have to dance where the difference of $100 a month can make or break your life? What happens if you fall ill for a month or so?

Here's the real answer: she was speculating, she probably put no money down, and has no "skin in the game", and the reporter is too stupid to ask the hard questions.