The Epic American Credit and Bond Bubble Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Ramsey Su who wrote (54572)	2/23/2006 2:20:14 PM
From: russwinter	Read Replies (1) of 110194

Table 15 in the First American report tells the tale. And the reports that I've been putting up on my blog, point to much weaker pricing. See springhopemania: xanga.com I think the market may be down 10% from last summer (the basis of the FA report). So if we assume the market is down or soon will be off 10%, here's what the three colors look like in the 2004-2005 cohorts: red (high reset sensitivity) 430.5 billion: no equity: 34% or 146.4 billion neg 5% equity: 25% or 107.5 billion neg 10% equity: 18% or 77.5 billion yellow (medium reset sensitivity) 820.0 billion: no equity: 39% or 319.8 billion neg 5%: 29% or 237.8 billion neg 10%: 21% or 177.2 billion orange (subprime, supposedly small reset sensitivity) 637.5 billion no equity: 49% or 312.4 billion neg 5%: 39% or 248.6 billion neg 10%: 30% or 191.3 billion The FA report just skips over the 2003 cohort but 20% of that group has no equity either. 16-18% of 2000, 2001 and 2002 don't either. But just taking all colors of the 2004 and 2005 with no equity, I come up with $778.6 billion, and $446 billion of those have negative 10% equity. Add the 03's and you're talking about a trillion in loans without equity, and really that's conservative as just leaves out all the earlier years. Think there are plenty of default, short sale and REO candidates to weigh on an already weak market? And we haven't even seen any credit spread widening or "normalization" yet, indeed it's even narrower. Financial commercial paper is being treated as the same risk as T-bills, and two year agencies are only 21 bp above Treasuries, really unbelievable.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next