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 : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (15331)	3/14/2007 2:32:52 AM
From: TobagoJack	Read Replies (4) \| Respond to of 217882

Don't know what it all means, but an e-mail response to the previous e-mail is just so, I quote, QUOTE Assumptions: 1 - Subprime mortgages are going to "freeze up." 2 - Alt-A will go the way of subprime. 3 - Home prices decline due to fewer buyers as the marginal buyers of the past 2 years no longer qualify to take out a mortgage. Let's make it even worse - banks selling forclosed properties are going to dial 1-800-GET-ME-OUT, meaning they want the garbage off their books and are less sensitive to price. Thus, this slow dripping of housing prices will accelerate to the downside. 4 - US GDP net of Mortgage Equity Withdrawals has been running at under 1% for the past 5 years in a row. With HELOC's no longer available, less equity in many homes, and negative equity in others, where is the fuel for the consumer? calculatedrisk.blogspot.com 5 - Ah, higher pay for workers will help fuel the consumer looking foward. But what happens to the unemployment rate when all those construction workers, mortgage brokers, real estate brokers, etc. get laid off? Never to fear, as last months employment numbers showed, the Federal Government can always come to the rescue, as they provided 40% of the net new jobs last month! CAVEAT: People have been calling for a tapped out US consumer for 10 years now and the US Consumer has always proven otherwise. So maybe they'll find another way to keep spending away. I'm a bit more bearish than XXXXXX, as I see a 20% drop feasible, yet still in a primary bull market. After that, we'll just have to wait and see how things transpire. But there are too many right now saying this is only a "dip" or a "correction" just like we heard in 2000-01.... Just my two cents... UNQUOTE

To: TobagoJack who wrote (15331)	3/14/2007 3:31:19 AM
From: Elroy Jetson	Respond to of 217882

Homes of Subprime borrowers in foreclosure will drive down home prices. Equity extraction from home equity is already down 60% according to Northern Trust. This only falls further. This is what has enabled Americans to spend 5% more than they earn. Take that away and expect a 5% recession. Take away the related employment as everyone's income falls 5% and you have a real problem for people dependent on the US economy. Expect the usual games to make the problem go away, and yet you still have a real whopper of a recession. .