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

To: russwinter who wrote (27211)	2/25/2005 11:10:25 AM
From: Rob Fritz	Respond to of 110194

Re: It's getting expensive, especially with 400-500k mortgages and, and really defies gravity. It's worse than you think. You would not believe the number of people taking out 700-900k mortgages...

To: russwinter who wrote (27211)	2/25/2005 11:49:59 AM
From: ild	Read Replies (1) \| Respond to of 110194

<<<Calf mortgages that reset in 05, but I'm guessing about 10% of total mortgages?>>> IMO the number is much smaller. First few took ARMs before 2003. Second only a small percentage of those mortgages were not fixed for 3/5/7 years. But what's important is that all new purchases have to qualify for today's much higher rates. Also last year rates went down in March which kicked RE prices higher. stockcharts.com[w,a]dacayiay[dd][pb200!b50!f][vc60]&pref=G

To: russwinter who wrote (27211)	2/25/2005 12:36:11 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

You would think with an increase in credit loss from the record lows today and less liquidity from Fannie Mae the likes of Countrywide and Washington Mutual who are aggressively marketing 6 and 12 month CD's soon to be at 3.5%+ will see their margins shrink to zero within a couple of quarters in a flat yield curve environment. If the long end backs up perhaps 125-150 basis points values will collapse and credit losses will skyrocket more than offsetting any small margins in the carry trade. There appears no way out.