[HereWeGo]

Well, the banks might have to hold the paper, but that beats the heck out of buying back nonperforming paper. If the new loans performed well, eventually they would sell.

kewp- That would change with a rate cut, as the discount window is always open.

[HereWeGo]

This all comes down to people defaulting on their debt obligations. If the Fed lowers rates enough, and people can refi at a lower rate (where they can meet the debt service), then most of these problems simply disappear.

[HereWeGo]

This all comes down to people defaulting on their debt obligations. If the Fed lowers rates enough, and people can refi at a lower rate (where they can meet the debt service), then most of these problems simply disappear.

[HereWeGo]

This all comes down to people defaulting on their debt obligations. If the Fed lowers rates enough, and people can refi at a lower rate (where they can meet the debt service), then most of these problems simply disappear.

[HereWeGo]

I wish I could disagree with some part of that post. The only aspect he does not cover is the deflationary impact on the equity markets (and probably other asset classes as well), as funds scramble to cover bond losses by selling equities (or maybe I missed that part of the post.)

I haven’t agreed with the whole “bottom up” Bear Scare scenario, but this top down thing is a big concern.

As the author implies, California real estate just took a sudden and grievous blow. The seemingly overnight precipitous shift in the availability for mortgage credit (especially jumbo) can be summed up in one phrase:

Game Over, Man. Game Over.

[HereWeGo]

I wish I could disagree with some part of that post. The only aspect he does not cover is the deflationary impact on the equity markets (and probably other asset classes as well), as funds scramble to cover bond losses by selling equities (or maybe I missed that part of the post.)

I haven’t agreed with the whole “bottom up” Bear Scare scenario, but this top down thing is a big concern.

As the author implies, California real estate just took a sudden and grievous blow. The seemingly overnight precipitous shift in the availability for mortgage credit (especially jumbo) can be summed up in one phrase:

Game Over, Man. Game Over.

[HereWeGo]

I wish I could disagree with some part of that post. The only aspect he does not cover is the deflationary impact on the equity markets (and probably other asset classes as well), as funds scramble to cover bond losses by selling equities (or maybe I missed that part of the post.)

I haven’t agreed with the whole “bottom up” Bear Scare scenario, but this top down thing is a big concern.

As the author implies, California real estate just took a sudden and grievous blow. The seemingly overnight precipitous shift in the availability for mortgage credit (especially jumbo) can be summed up in one phrase:

Game Over, Man. Game Over.

[HereWeGo]

You probably should go ahead and buy now so you can lock in that 7.8% rate on a depreciating 600K asset.

[HereWeGo]

You probably should go ahead and buy now so you can lock in that 7.8% rate on a depreciating 600K asset.

[HereWeGo]

It’s going to take much more than a quarter point cut. As I mentioned before, I could live with a bifurcated rate, where the low rate is exclusively to allow refinancing and the 1/4 pt higher rate is to fight off inflation concerns.

I’ve read many of Bernanke’s writings, he knows a great deal about the Japanese collapse and has mentioned that he has “a printing press.” I’m not sure the printing press needs to be revved up for the greater economy, but if the trend is towards millions of foreclosures over the next 6 months, that trend must be stopped and it must be stopped now. Otherwise the fixed income crisis will continue to spiral out of control.

Let me put this a different way: “subprime” has metastasized. It is the polar opposite of “contained.” There’s no way to treat the bond market convulsions without first dealing with the source of the disease … namely, that US debtors are walking away from their obligations.

[HereWeGo]

It’s going to take much more than a quarter point cut. As I mentioned before, I could live with a bifurcated rate, where the low rate is exclusively to allow refinancing and the 1/4 pt higher rate is to fight off inflation concerns.

I’ve read many of Bernanke’s writings, he knows a great deal about the Japanese collapse and has mentioned that he has “a printing press.” I’m not sure the printing press needs to be revved up for the greater economy, but if the trend is towards millions of foreclosures over the next 6 months, that trend must be stopped and it must be stopped now. Otherwise the fixed income crisis will continue to spiral out of control.

Let me put this a different way: “subprime” has metastasized. It is the polar opposite of “contained.” There’s no way to treat the bond market convulsions without first dealing with the source of the disease … namely, that US debtors are walking away from their obligations.

[HereWeGo]

I took almost all my investments to cash on Wed. Amazing that over a 10 day period, I lost about 66% of my gains over the year, but hey I’m happy with what remains. I felt like a complete panic monkey on Thurs when the market jumped 100 pts, but now, barring action by the Fed, I just don’t see how the markets can rise or even stabilize. Equity owners will take it on the chin as hedge funds sell into rallies to pay off insanely monied investors spooked by the fixed income market craziness.

I really hope the Fed moves on Tues and makes me look foolish. But if the Fed just changes its language, then look out below.

[HereWeGo]

I took almost all my investments to cash on Wed. Amazing that over a 10 day period, I lost about 66% of my gains over the year, but hey I’m happy with what remains. I felt like a complete panic monkey on Thurs when the market jumped 100 pts, but now, barring action by the Fed, I just don’t see how the markets can rise or even stabilize. Equity owners will take it on the chin as hedge funds sell into rallies to pay off insanely monied investors spooked by the fixed income market craziness.

I really hope the Fed moves on Tues and makes me look foolish. But if the Fed just changes its language, then look out below.

[HereWeGo]

Well folks, now that the secondary market has shut down, if there’s no help from the Fed, housing demand, especially in the most bubbled locales, will plummet. Some areas will still be desired, but the areas described by SD Realtor will be in for a world of hurt.

Plummeting demand + oversupply (builders + end-of-the-rope debtors) eventually = panic.

Now if the Fed acts and debtors can refinance, there’s still falling demand (due to price momentum and the end of option ARMs) and an oversupply, but the decline will be much softer, and, of more importance, the credit markets will calm down.

But if the Fed fails to act … wow. I hope you, all of your friends, and all of your loved ones are either in cash (or better yet, Treasuries) or short the lenders/homebuilders/financials.

[HereWeGo]

Well folks, now that the secondary market has shut down, if there’s no help from the Fed, housing demand, especially in the most bubbled locales, will plummet. Some areas will still be desired, but the areas described by SD Realtor will be in for a world of hurt.

Plummeting demand + oversupply (builders + end-of-the-rope debtors) eventually = panic.

Now if the Fed acts and debtors can refinance, there’s still falling demand (due to price momentum and the end of option ARMs) and an oversupply, but the decline will be much softer, and, of more importance, the credit markets will calm down.

But if the Fed fails to act … wow. I hope you, all of your friends, and all of your loved ones are either in cash (or better yet, Treasuries) or short the lenders/homebuilders/financials.

[Author]

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