Te Mata Posted January 3, 2006 Share Posted January 3, 2006 Hi folks, I found this on a commodities forum and thought it would be interesting for you all. For your perusal: campion - Tuesday at 1:48 AMReading where in 2006 and accelerating in 2007, approx. $2.5 trillion worth of fancy mortgages called "hybrids" are coming to the end of the free-lunch part of the deal. Plus, about a trillion of the 5-year adjustables that were issued during the re-fi craze of 2002-03 are going to hit their first reset date in 2007. Fed Funds rates were 1%- 2% back then; now looking at 4%...5%...or higher now and these loans represent 20% - 25% of the $8.8 trillion in single-family home loans outstanding nationwide. Monthly mortgage payments will easily double or more. And credit standards and credit availability could be tighter...."borrows think they can always refinance...that is not always a safe bet." Finally, there are hedge funds and leveraged reits on the other side of these loans. I have a question for Ben Bernanke, ...."How much further above 4.25% do you want to raise the funds rate?" If energy prices go higher in 2006 and some intelligence and responsibility is exercised to finally bring some control to federal spending, the fed funds rate will not be going higher from here.....it will heading back toward 3% by 3rd quarter '06. Either that or ......Dow 7500.....or both numbers by 2007. Greenspan getting out just in time...2006 is going to be volitile and difficult....the economic "sweet-spot" for this cycle coming to an end. IMHO campion Quote Link to comment Share on other sites More sharing options...
Perfectionist Posted January 3, 2006 Share Posted January 3, 2006 It never fails to amaze me how so many people live for today ..... without thinking about tomorrow ..... I am the exact opposite and can't understand how anybody could live any other way ..... Quote Link to comment Share on other sites More sharing options...
apom Posted January 3, 2006 Share Posted January 3, 2006 Christ.. that is a hell of a jump.. makes your blood run cold... Quote Link to comment Share on other sites More sharing options...
FTBagain Posted January 3, 2006 Share Posted January 3, 2006 Christ.. that is a hell of a jump.. makes your blood run cold... Yeh! And I thought we had it bad over here... The really scary thing is if the US catches a cold, we catch the flu. Well seems like the US is heading for a case of the (bird?) flu. What does that give us Black Death, Ebola?? Glad I ain't got a mortgage. Quote Link to comment Share on other sites More sharing options...
29929BlackTuesday Posted January 3, 2006 Share Posted January 3, 2006 Yeh! And I thought we had it bad over here... The really scary thing is if the US catches a cold, we catch the flu. Well seems like the US is heading for a case of the (bird?) flu. What does that give us Black Death, Ebola?? Glad I ain't got a mortgage. Amen to that brother. Quote Link to comment Share on other sites More sharing options...
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