IT’S NOT ALL BAD OUT THERE
26 April 2009 by Cullen Roche
2 Comments
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Comments
The desperate attempt to see positive developments on the housing front is really pathetic. It completely ignores the next huge wave of foreclosures coming in the Option ARM, Alt A, and prime segments. This is very predictable and yet seemingly ignored by these economists.
The ship is heading for another iceberg but the band plays on.
The other issue is all these mortgages refinanced at 5% interest for 30 years [ this quarter every bank booked hefty profits in mortgage refinancing]. Who is going to bear the interest rate risk ? Okey, may be the Fed can manage the show for the short term but once the economy turns around or inflation kicks in/dollar gets weaker, these refinanced mortgages would become toxic automatically even if no one defaults on their mortgage payments. I hope someone is thinking beyond tomorrow.