HowardA Funny Thing Happened on the Way to the Mortgage Sale
September 29th 2006 02:15
Approaching St John the Divine on w 112th st.
closer to St John the Divine, rose window
A funny thing seems to have happened on the way to the mortgage sales. The problem is not housing, people still like housing and real estate. The problem is that the mortgages don’t sell, said one old geezer. The regions where housing prices are blowing out is where using the ARMs (adjustable rate mortgages) and IOs (Interest only), the market was turned into leveraged mortgages that are now blowing out.
Look at California (Sept 25, East Bay Business Times, foreclosures.com) , where home sales have plunged by 30.1-percent. In the San Francisco bay region, over 80-percent of new mortgages were of the ARM-IO exotic variety. That’s how the median home price in Calif. Hit $576.000. The share of houses on the market for three months or more has quadrupled from 6% to 22%. Massachusetts and Florida are about the same….
On the hedge fund thing, Amaranth is totally brain dead, it is dead despite rumours of it being still alive. They are waving the corpse around and moving the arms by strings. It’s just so the regulators and the NY Fed, etc have time to unwind all the derivative positions. But, by trying to control the losses and spread out the losses, the bankers are just accelerating the crash. It sort of like me when I try to do everything else when I’m driving, instead of keeping my eye on the road!!!
Why try to keep this system intact. We could have a New Bretton
Woods conference, we can have a peace for the benefit of the other. We really don’t need a war on Iran or anyone else, in order to save the speculative bubble. If these guys get their empire, it’s gonna last about six weeks. Fugataboutit.
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