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 Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (93926)	11/6/2007 10:44:12 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 306849

a possible weakness in your idea is its reliance on the Fed to bail out ARMs. my understanding is most ARMs are tied to things like LIBOR or the prime rate. i don't think it's the Fed funds rate plus vig. i also believe the stepups can be large, although the first step is admittedly the biggest one. the entire subprime crisis has been unfolding in an environment of Fed rate cuts. if you go with the idea that many people will try to hold onto their house as long as possible, then the increasing stepups could be like Chinese water torture.