Thanks guys, I have been kinda questioning the standard interpertation of the reset charts as of late. These people are being bailed out by the Feds disregard of inflation as they may actually see their payment DECREASE due to lower interest rates and the LIBOR cliff jumping. I have to admit, I dont like it. I am being robbed twice in lower interest AND higher inflation so these jerks can stay in their homes and the bankers that put them there can keep their bonus’s and such. But who really cares what I do and dont like?
I still think this is just more evidence that while we will avoid a total crash right now, the debt must be paid. Eventually rates have to go up and then we will have a day of reconing as these morgages reset and the fact that the owners have no equity means that they will reset. I think the idea is that we can withstand a certain number of resets, but that we cant do with with all our major banks capital impared. So the Fed plays for time, lets the banks heal, then lets these morgages go the way that they will naturally go. Hopefully a few years of lower to no growth are better than a crash and following slow recovery. Smart play I must say even if it doesnt help me to the benifit of others.
