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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (17414)12/2/2004 5:19:22 PM
From: russwinter  Read Replies (2) of 116555
 
I was beaten up shorting CFC. They have a huge portfolio of loan servicing, so not sure if a bit of a pullback in loan originations will hurt them much. They will need outright trouble in the marginal subprime stuff they are into. The company that really holds on to junk loans, is more exposed, and doesn't have the organizational firepower that CFC has, is NEW.

5.78% thirty years and avg ARMS of 4.12% still supports a lot of lending, and new lending tells me, that people will continue to rob Peter to pay Paul, and "stay out of trouble", at least technically. There is nothing slow about that business at all, with the MBAA purchase index at sky high 460 (which supports asset inflation), and the refi index at 1912. Not even sure if a quarter percent higher rates will matter much, as these guys just find a hole somewhere to exploit, and rocks to turn over to find new marginal customers. Have you come across any real sign of credit distress yet? Frankly I too am amazed it hasn't unfolded.
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