Silicon Investor (SI) -- The First Internet Community

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 -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (24553)	1/13/2005 10:21:13 AM
From: ild	Read Replies (1) \| Respond to of 110194

China: Don?t Fear a US Backlash Andy Xie (Hong Kong) morganstanley.com

To: ild who wrote (24553)	1/13/2005 10:55:58 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Have you come across any data about the use of these LIBOR rate loans? Very steady increase in costs registered, and I believe there are 2-2 1/2% margins applied, and often monthly, so doing some math: 1.75% early this year plus 2.0%= 3.75%, now 2.90% libor-loans.com + 2%=4.90%, viola a 30% higher payment. I came across a lady who is using one of these "interest only" to purchase and remodel a $ one million home in Portland. This might be a hot potato before long? See six month: bankrate.com And yes the market is totally oblivious: stockcharts.com[l,a]daclniay[pd20,2!b50][vc60][iUc20!Lf]&pref=G

To: ild who wrote (24553)	1/13/2005 12:05:59 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

I am not even sure what is the profile of a typical borrower who has a MIed loan anymore. It is so easy to bypass that now that it is almost a no brainer. Furthermore, when interest rates were higher, 1/4%ish is not that much. Today people refi if they can save 1/8. MDC conf call answered the question about LTV and FICO. LTV is low 80% average and FICO around 720. So for the high end builder, TOL, LTV is only slightly better at 75%? (per last qtr's CC) MDC was very hesitant in answering the question about cancellations. At 32%, that means 1/3 of their backlog may evaporate. MDC said they hope cancellations happen early, before the sticks go up. I can only assume that if the house is completed, they may be sitting on inventory instead of backlog. I am getting daring at my old age and am going to venture into a real trading opinion: IF 1. DHI blows away earnings estimates next week. AND 2. DHI and other homebuilders skyrocket on that release. Then I think it could be hell of a good entry point for shorting the homebuilders.