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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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From: zebra4o11/19/2005 8:39:56 AM
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ARMs repricing: Trying to estimate the number of ARMs that are starting to reprice is interesting - but that only tells you what is happening with people who have already bought. And it's going to take quite a while before the pain and negative cash flow starts to show. Most people will not sell until their financial situation gets desperate.

What should already be having an effect is the drastic increase in short term interest rates. The ARM advantage has already been drastically reduced. This has got to be having a big impact right now.

Supply and demand: ARM repricing should eventually increase the supply of homes for sale. But the run up in short term interest rates should be decreasing the demand already.

This chart by Lee Lichterman III has been posted a couple of times, but this says it all.

marketswing.com
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