Wednesday, Mar 14, 2007
It's only just starting
The Telegraph: US mortgage mayhem prompts sell-off
Ominously, the Mortgage Bankers Association revealed that 4.95pc all loans tracked were in arrears of 30 days or more, the highest since the depths of the 2002 recession. Deliquencies on sub-prime loans have reached 13.3pc, even though the economy has barely begun to slow.
Posted by sold 2 rent 1 @ 09:40 AM (155 views) Add Comment
4 Comments
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1. sold 2 rent 1 said...
If the government bail's out the sub-prime sector then the dollar will tumble.
The "Alt-A" mortgages (next credit level up from sub-prime) will be next to start defaulting in large numbers
Alt-A loans accounted for roughly 16% of mortgage originations last year and subprime loans an additional 24%.
The US economy is not even is recession yet.
Median US house prices have fallen 9.3pc since April
This is going to be massive.
Buy gold.
2. tyrellcorporation said...
Woooah! HSBC is in for a rocky ride. My guess the talk of a government bailout would never happen as it would be impossible to administer. It's probably (again) wishful thinking by Mr Chirs Dodd of the Senate Banking Committee who has BTL homes dotted around the US. The damage is already done to consumer sentiment so any bailout would have a limited effect anyway.
3. inbreda said...
S2R1
I've noticed that that when everything else goes down, so does gold. I didn't expect this, but someone suggested (possibly you?) that it was because of firms having to sell their gold to cover their losses elsewhere. My question is - how low can gold go on this basis? It has already risen substantially over the last few years, and while I'm sure it's not overpriced I'm feeling a little uncertain about how much of a safe haven it is.
4. sold 2 rent 1 said...
inbreda,
This question was asked on goldprice.org
"A reader asked me why it seemed the SILVER PRICE and GOLD PRICE were moving in step with stocks, instead of contrary to them. Answer is, stocks & metals don't move in lock step against each other every single minute, but generally over time in a primary trend lasting decades. It's not unusual for them to run together, even for quite some time. The recent selling panic in stocks probably induced gold selling as investors threw profitable investments into the fire to meet margin calls or just to flee to cash."
Don't expect an easy ride with gold. Expect even less with silver.
My view is long term. I am an investor not a trader.
Cash around the world is being devalued by the increase in money supply.
The dollar is set to continue its decline.
Remember a significant amount of gold's rise is due to the dollar's fall
With the government ready to bail out subprime mortgages and the Fed ready to slash interest rates with the oncoming US recession the dollar will tumble some more.
Where will the trillions of foreign reserve dollars go when fleeing the dollar and with falling property and share prices.
I hope to add to my gold ISA funds in April with the start of the new ISA tax year.
Hopefully this will coincide with a gold low and good buying point