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

To: CalculatedRisk who wrote (26977)	2/22/2005 3:48:11 PM
From: ild	Respond to of 110194

<<<The FED can jawbone all they want, but I think they need to get banks to tighten their credit requirements to pop the speculative bubble.>>> That's what I had in my mind. They jawbone to influence interest rates and bank stock prices. I think the Fed does want to create a little recession now, but they are afraid it may grow beyond their control.

To: CalculatedRisk who wrote (26977)	2/22/2005 4:09:34 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

If you can buy some RE with no money down, and the RE is the only collateral for the loan, isn't it rational to speculate? No one will care what the FED will say can't he jawbone the lenders, or the lenders' lenders?

To: CalculatedRisk who wrote (26977)	2/22/2005 4:19:21 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

We know that a bunch of these more egregious Bubble real estate transactions were done with ARMs and IOs over the last several years. This article indicates 60% of all Calf mortgages done in 04 were ARMs. Message 21068645 But I've been searching high and low for the real time, or very current numbers of these, or percentage of these that reset in 2005? I can't find it though. Those people (and we only need a portion to crater the overleveraged housing sector, and then in turn the consumer and "easy" finance market)will start blowing up even with current 3.5% like Libor rates, libor-loans.com and any higher, look out. I really believe we are at a tipping point, and the magnitude will be determined by how much higher rates go, or if they pause here, then the passage of time will have a gravity effect as cohort after cohort gets hit with resets, and higher HELOCs interest payments, or it will a combination of time and higher rates. One could apply a sensitivity measure to all this. I don't really want a national figure because modest $150k thirty year mortgages in Topeka will only be a small part of the problem. Therefore I'd say the focus should be on the mutha Bubble, California (loosely defined to include LV, Ariz, Portland, Seattle, Hawaii). This kind of stuff: realestatebubblewatch.com piggington.com