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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 (13775)	5/13/2004 10:39:08 AM
From: Wyätt Gwyön	Respond to of 110194

In general, I think people do these things for the wrong reasons, to get more house than they can afford no doubt, and an important factor in continuing the housing bubble. In my situation, I believe we reduced our risk of getting into a bind but on the other hand, if on the investment front you are making the same type of bet as you are making on the mortgage front through a very short-term variable interest-only loan (i.e., banking on a "non-explosive" Libor), it sort of compounds that position. for example, if somebody works at Cisco, an investment advisor may say it's a good idea to underweight high tech since the client already has huge exposure on the personal (job) front. if both of these "trades" go against the client, he loses doubly. this in fact happened to many people who lost their jobs in high tech, even as their high-tech-heavy portfolios collapsed. do they not have fixed rate interest-only loans?