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

To: orkrious who wrote (29872)	4/2/2005 10:35:26 AM
From: orkrious	Respond to of 110194

postscript to my last post. I had only read 2/3 of the article when I was interrupted, and I just finished it. noland knows something changed. maybe what I said is true. we're Road Runner and we've gone over the cliff, we just haven't yet looked down. interesting times we live in.

To: orkrious who wrote (29872)	4/2/2005 10:38:37 AM
From: russwinter	Read Replies (2) \| Respond to of 110194

What I find especially bizarre about this credit expansion behavior is that when you follow the weekly data, it sorts of does perverse, opposite of what you would expect things. For instance in the Fed's H8 data, federalreserve.gov you can track real estate loans. We all know that rates keep ticking higher, and the cost of servicing these loans is going higher. Now notice how the amounts of these borrowings, goes flat from Dec-mid-Feb, then boom, it accelerates right when Libor and 1CMT rates are 50 bps higher. I don't know if there is an outlier issue (when loans get out of escrow and get funded), but that's clearly a WTF kind of question. 12/08/2004 2132.6 12/15/2004 2137.2 12/22/2004 2144.7 12/29/2004 2138.8 01/05/2005 2148.2 01/12/2005 2158.7 01/19/2005 2155.2 01/26/2005 2154.8 02/02/2005 2159.1 02/09/2005 2167.5 02/16/2005 2164.8 02/23/2005 2190.7 BOOM! 03/02/2005 2208.1 BOOM! 03/09/2005 2218.5 BOOM! 03/16/2005 2218.3 03/23/2005 2225.7 BOOM! Now look at Helocs: 12/01/2004 395.4 12/08/2004 396.6 12/15/2004 397.8 12/22/2004 398.2 12/29/2004 400.2 01/05/2005 404.0 01/12/2005 405.1 01/19/2005 405.8 01/26/2005 406.8 02/02/2005 406.8 02/09/2005 406.3 02/16/2005 406.7 02/23/2005 408.0 03/02/2005 408.9 03/09/2005 412.6 BOOM! 03/16/2005 414.8 BOOM! 03/23/2005 416.7 BOOM! Then when you look at one of the more egregious speculative markets, downtown San Diego, you can see the new listings, inventory build ups and early 05 price reductions, and suddenly in weeks 10-12, a surge in pending transactions. Noland is probably right about the rate levels necessary on this. sdcondo.com