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

To: bcrafty who wrote (56531)	3/22/2006 4:08:22 PM
From: damainman	Respond to of 110194

Lenders should package put options that with their no-money-down interest-only sub-prime loans but I bet the risk and time premiums will be priced high enough so that if you do get a drop in home prices the derivative will not save you any equity at all once you subtract out what you paid for the option.

To: bcrafty who wrote (56531)	3/22/2006 4:12:51 PM
From: Mike Johnston	Respond to of 110194

S&P to launch home-price indexes; CME derivatives next This is like opening a can of worms. I know this might sound absurd, but these derivatives could possibly become government tools of influencing the housing market through covert market manipulation followed by private arbitrage (read : to prevent the real estate bubble from bursting and to provide stability to the housing sector ). It could make one of Bernanke's unconventional deflation fighting weapons very easy to use (too easy ).