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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (10555)3/20/2004 5:24:25 PM
From: Sawdusty  Read Replies (2) | Respond to of 110194
 
mish:

"I also contend it would stop housing cold!"

While I certainly agree with most of your post, I'd like to offer a different view on housing. There is a possibility that a .25 BP increase could fuel it even more, although it would be short term. When bubbles are taking place, everyone wants a piece and do not want to miss out.

Interest rates have been low for some time, perhaps people expect them to last forever and feel in no rush to buy. An increase could generate panic buying for those that feel they would be left out. I do think it would be of short duration, but it's just an opinion......worth what you paid for it. -g-



To: mishedlo who wrote (10555)3/21/2004 1:34:01 AM
From: Haim R. Branisteanu  Respond to of 110194
 
mish would agree that all kinds of derivatives holdings will get hurt, but I would disagree that 25bp would hurt housing.

Housing IMHO is at the end of the cycle not much pent up demand left anyway. As such a fall in prices will not hurt the public at large it will end up as pure paper losses. Those holding MBS papers will get hurt if marking to market


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