PerryChase, No analysis from me…the articles say it all. Just read an article on today’s “USA Today” suggesting customers with mortgage payment problems talk to their banks early. I guess right now banks and credit counseling organizations must be working at a hectic pace to put delinquent mortgages “back on track”. The title of the article “Can’t pay? Talk to Mortgage lender; Don’t dodge or delay; solution may be possible”. In it, an executive director for the Homeownership Preservation Foundation, which provides free financial counseling, said that “calls to her foundation’s 24-hour hotline have shot up 61% to 140 calls a day since January, and 40% of all callers are having trouble with their ARM loans”.

But the question is, will the leeve still breach and the flood of deliquencies finally hit the market and headline? I believe that it will — the first stage of such a crisis is always trying to delay / deny it at the consumer level. At the macro level, there is no fiscal stimuli left (we have a budget deficit, a war going and a looming medicare budget crisis); it’s questionable that much monetary stimuli (lower interest rate) will come soon. I read that wages in China is finally rising, and that’ll eventually show up in WalMart. If rent increases, that’ll show in CPI. In this country, workers finally realize that their wages aren’t keeping up with cost increases, so maybe wages will rise some too, and that’ll add inflation pressure. So the bottomline is, we are not likely get really meaningful interest rate relief unless we’re in a serious recession, and if that recession hits, it sure won’t be good for some homeowners living on the edge already…