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: Crimson Ghost who wrote (35683)	7/10/2005 4:41:07 PM
From: ild	Read Replies (3) of 110194

Message 21490957 <<<A lot will depend on the bond market. If TNX stays under 4% that will tend to keep the housing bubble from deflating too rapidly. But if TNX shoots up to say 5%, then prices will really plunge in the bubble markets I think.>>> FH, why do you watch TNX yield and not other yields? No one in bubble markets finance RE with anything fixed for longer than 5 years. Last year most buyers in Los Angeles were taking 5 year fixed IO mortgages. This year they are taking this "Option ARM" program erate.com It takes little "stated" income to qualify for a mortgage of any size. As the banks have no problems selling their private label MBS the RE financing machine is well oiled. IMO it will take much higher Fed rates to have a meaningful impact on RE.

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