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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: ild who wrote (32482)5/16/2005 2:29:33 AM
From: John Vosilla   of 110194
 
Probably the back up in short rates eventually has a greater effect in the bubble markets where the entry level buyer needs creative option ARM's in order to get in but with these ridiculous 1% start pay rates they really start feeling it when they see the balance relentlessly pushing higher and values stabilize or go down. In the heartland a much greater percentage can qualify with a standard fixed rate mortgage so perhaps there could be a method to the madness in flattening the yield curve and targeting to burst the bubble markets. The same can be said for the corporate bond market. For now it appears to be crating havoc in many already weak areas of the economy as well as the non bubbily RE markets instead. So much for logic <g>
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