I have several comments on there too. Please read the bottom comment, where I analyze Kelly Bennett’s story from today and the true impact of resetting ARMs. Kelly did a great job on this research, even though she got misled by Visini; probably he doesn’t understand it either.
One thing that people have to understand is that home prices are set at the margin. Bob Visini gave her wrong info when he told her that 3/4 of loans are fixed, thus the impact is negligible; all you need is 30,000 sellers in distress to bring down home prices for everyone!
Just seems crazy to me this run up today, Don’t think anything has changed, Maybe some type of market manipulation to get a lot of dumb money to buy in (hey look maybe housing set to take off again hon, we should buy that 800K nothing special home on a 1/8 acre or that fixer-upper for 600k).
House prices may also drop in a non monotonous way. A year or two from now, some people will “see” the bottom and start buying again, bidding prices upwards, only to see the market resume its free fall the following quarter. And this process may repeat itself more than once before we hit the true bottom. Of course, it’s nearly impossible to tell a false bottom from the true one until after the fact. It’ll be exciting to watch!
Short on Advice… I started doing a hypothetical portfolio on short trades using the short trades that most everyone recommended on this blog starting 8/31/06. I shorted 100 shares of the following stocks with the begin price and the present profit as of today 9/13:
So if I were to have taken all the "Short" advice given to me on this website starting on 8/31, I would have invested -$27,999.00 and lost $1,685.00 (on margin so add another 9%).
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