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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (21055)	8/12/2007 1:11:02 PM
From: Ilaine	Read Replies (2) \| Respond to of 218929

No, just that at some point adding more liquidity doesn't help, e.g., liquidity trap, real interest rates at or less than zero. For example, with housing prices dropping like rocks, and a 20% to 30% drop widely expected, cutting mortgage interest rates isn't going to get people buying, and even if they did, nobody's going to be able to bundle those mortgages into mortgage-backed securities and sell them. Interest rates need to go up for that, so that particular market is not going anywhere. BTW -- the most "interesting" bankruptcy I've seen yet is a grocery store cashier who leveraged her home equity to or past the max and bought two more houses for investments. Now that the teaser loans have locked she has $5K in mortgages on just one of the houses. She was grossing $40K but the grocery store cut her back to part time ($25K) because their sales have dropped. A real estate appraiser told me that in this woman's home town 19 out of 21 home sale listings are foreclosures.