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

To: piggington who wrote (35938)	7/13/2005 10:21:57 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

I agree with everything you are saying, in terms of the future problems... I am just unconvinced that it is happening quite yet. I think the vast majority that 15k or so inventory is people who WANT to take profits or to move up, not people who have been forced via ARM resets into selling. Do you think a lot of people (enough to move the market) are currently in that boat? rich As someone in an interest only loan (75% equity right now) I can feel the pressure a TINY bit. If 3 more hikes are coming I would be better off going back to 15 year fixed. I would do it with no closing costs of course. Now I was not counting on 2% 3% or even 4% loans. The question is how many were counting on 2% or 3% and for how long. The carrying costs of 0% down in CA on the enormous prices there just might have some sweating right now. What happens on even a modest 5% price decline with one or 2 more hikes? Mish

To: piggington who wrote (35938)	7/13/2005 10:33:35 PM
From: Ramsey Su	Respond to of 110194

so Brian printed out this guy's 5 reasons about why interest rate is so low. Before we can get into it, the Vietnamese spring rolls arrived and we were too busy to talk. <private ggggggg> We need "must sells" to reach critical mass for price to move. It is entirely unclear how many homeowners/speculators/investors are in this position. FBR had a call today on the subject with some guy from World Savings as a guest, addressing the issue of option ARMs. I think he convinced FBR analysts that option ARMs would not caused any delinquencies. I don't understand where the discrepancies came from but based on my data, SD inventory rose from 12055 on 6/23/05 to 13010 today. "Pendings" dropped from 6908 to 6518 for the same period. If this trend continues, I think SD market would be stressed by the end of the summer. A suggestion for your website - select a few large condo projects and track all sales in the project. That would be far more indicative of price trends, kind of like this one sandiegodowntown.info Ramsey

To: piggington who wrote (35938)	7/13/2005 10:34:16 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

<Do you think a lot of people (enough to move the market) are currently in that boat?> I think a surpriseingly large number are, or soon will be. Keep in mind, the one year CMT has only been above 3.0% () since February, but July will be the sixth month of it, and now it's 3.6%. Next month August will be the seventh cohort, and if there is actually a rate hike (which the market fully expects, but I have doubts about) then we will be looking at maybe a 3.8% 1 CMT. That's over 6.0% for PRIME borrowers, and maybe loantech or somebody in the mort biz can chime in on what subprime would be paying. The point is, these teaser rates have already been done, the loans already made. That's the problem with a flat yield curve now, there's no ultra cheap loans any more, just big and bigger (or dumb and dumber) mortgages to pay, and much larger payments. () Incredibly the 1 CMT was below 2% starting way back in July, 2002, That's locked in a lot of people. 1 CMT 1 Libor Jul 2002 1.96 2.070 Aug 2002 1.76 1.943 Sep 2002 1.72 1.813 Oct 2002 1.65 1.664 Nov 2002 1.49 1.705 Dec 2002 1.45 1.447 Jan 2003 1.36 1.477 Feb 2003 1.30 1.368 Mar 2003 1.24 1.340 Apr 2003 1.27 1.362 May 2003 1.18 1.2214 Jun 2003 1.01 1.2014 Jul 2003 1.12 1.2789 Aug 2003 1.31 1.4714 Sep 2003 1.24 1.2857 Oct 2003 1.25 1.4551 Nov 2003 1.34 1.4867 Dec 2003 1.31 1.4582 Jan 2004 1.24 1.4607 Feb 2004 1.24 1.3645 Mar 2004 1.19 1.3401 Apr 2004 1.43 1.8082 May 2004 1.78 2.0764 Jun 2004 2.12 2.4682 Jul 2004 2.10 2.4632 Aug 2004 2.02 2.3001 Sep 2004 2.12 2.4445 Oct 2004 2.23 2.5289 Nov 2004 2.50 2.9607 Dec 2004 2.67 3.1004 Jan 2005 2.86 3.2710 Feb 2005 3.03 3.5114 Mar 2005 3.30 3.8420 Apr 2005 3.32 3.7101 May 2005 3.33 3.7789 Jun 2005 3.36 3.8632 July 13: 3.60 4.02