Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Gemlaoshi who wrote (77968)	1/22/2007 10:47:09 AM
From: John Vosilla	Respond to of 110194

I agree. A lot has to do with perception versus reality..Classic post from last month.. Message 23075998

To: Gemlaoshi who wrote (77968)	1/25/2007 8:10:07 PM
From: $Mogul	Read Replies (1) \| Respond to of 110194

Boy, is that not the truth. You hit that on the head. You hear the media and everyone and their mother talking about "housing". Until it gets so bad that the media and people just do not want to talk about it anymore as it is so dire you will not have a bottom. Currently it is not very bad at all, prices are barely dpown as invemtory is building. Prices in majior metro areas have went up in a un-precendented percentage over the last five years. There has NEVER been a time in history where prices have went up so much on a percentage basis in such a short period of time. (Refrence Shiller) if anyone has any questions. In my humble opinion this is innning 1 or 2 of the full ball game. Still very early. Any speculator who thinks prices are going to bounce right back is dilusional(Think after effect of 2000 stock market crash). This will take years and prices will be going a lot lower to start trying to putting a dent in supply. Sellers are currently in the reluctant mode, and that will change when they realize that there is sinking bids. Currently they are just stuborn, but that will change soon if history is a guide. Supply has not even started showing any real noticeable increases yet, although it is upward sloping at a faster rate then what most have witnessed over the past five years. If you factor in the supply from overextened consumers on the wrong loans in a increasing interest rate environment(stil at 35 year lows) that spells disaster. Much more to come in my opinion. The effect of all these variable rate mortgages and their resets have not even happened yet. I beleive the number in dollars is in the neighborhood of three trillion in resets coming due in 2007 and 2008. With rates skyrocketing from their lows and a greater majiority of the American public on some form of variable rate mortgage..there is going to become a lot of squeezing out and un-affordability to come soon for many that have the wrong loan and will not even be able to afford a fixed rate. Lets also hope there credit rating has not dropped or been dented in the maylay. The next question will be how the lenders allowed this situation and you are right there will be hearings and congressional investigations when it starts to get really bad. Inverted yield curve in my opinion will once again be proven correct albeit taking longer to fruitition then the norm. I think the Fed will scramble and cut Fed Funds(short term rates) to try and curb a prolonged recession. Realize bond market controls long-term rates not the Fed, hence the "conumdrum". If you listen to the media you will be blindsided(as many are now) and not even see it coming. All of this does not even factor in the cost of going back into Iraq and any potential financial or political event that the market is not pricing in here in my mere opinion.