The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: Ramsey Su who wrote (14243)	5/25/2004 8:01:17 PM
From: Pogeu Mahone	Read Replies (1) of 110194

federalreserve.gov >question 1: is vol of subprime loans a problem in itself? It depends on the lending institution. Usually they allocate a certain dollar amount to subprime. I know it's growing and some lending institutions are cutting back on subprime lending so as not to overextend. >question 2: as interest rates go up, what % of borrowers are going to be >reclassified as subprime? I think we're looking at about 35% of today's borrower being subprime. >question 3: if asset appreciation stops, workouts become much harder. what >percentage of the marginal defaults found no way out and becomes serious >delinquents? I have no idea. But will ask around. >question 4: would this start the chain reaction which will burst the >bubble? Yes - and we'll go back to 1992 to where the lending institutions including FDIC owned most of the properties up for sale.

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