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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (20229)	10/13/2002 7:37:03 PM
From: nspolar	Read Replies (1) \| Respond to of 36161

ild, fwiw not everyone has to purchase 30 yr mortgages. I posted this the other day, of present posibilities. No comments were received. thornburgmtg.com Bill Gross may be right or he may be wrong but imo arms folks will flock to arms, to maintain their current state of wealth. Shite will hit the fan some yrs down the road, hence it will take many years beyond the bottom for the next secular bull market to begin.

To: ild who wrote (20229)	10/14/2002 1:09:25 PM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 36161

ild re: Gross's comments of - ["...Because we are certainly within 1 3/4% of zero as Ed Yardeni might express it and we are therefore within perhaps 50 basis points of the lowest possible 15 and 30-year mortgage rate that Americans are going to be able to refinance into. Mortgage rates will not follow the Fed Funds rate basis point for basis point lower because the extension risk and the negative "convexity" risk to the buyer ..."] ...we need to note; that Mortgage Rates already have NOT followed the Fed Funds rate cuts - basis point, for basis point.... no new - news there. But,I do think we will see his "bottom call" of - "not much less than a 5% rate on 30 year Loans... and that is enough of a reduction from present rates & more importantly from the huge base of loans refi'd during the initial stages of the boom at 6.5 to 7.0% that are just a year, or so old...but, for whom it will pay to refi again this coming year at 5.0 to 5.5 %. We've got another year of the refi-boom coming...plan your homebuilder, Mortgage & Title Co short plays accordingly... BUT ! - you can short - or should have already been; shorting the subprime players. Greenspan can keep the consumer spending refi-vehicle going for 12 more months... THAT is the story here... after 12 mos we will indeed be at Gross's point of no return... and more specifically; the entire domestic REFIANCE market will have been burned & churned for a decade... ie: his spot on comments on..."No investor in their right mind would be on the buy side of a 30-year mortgage with a 4% coupon and a potential extension from a 5-year, to a 12, to an 18-year average life staring them in the face." HOWEVER ! ...I also think that what WILL BE DIFFERENT THIS TIME - on this last round of the Mortgage Refi boom - will be that consumers will pay down debt, or just pocket the savings... and will NOT use this Fed stimulation for consumer spending !