Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 04-07-2010, 02:01 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
Join Date: Sep 2005
Posts: 5,381
Originally Posted by kcowan View Post
If we try to size the next bubble, there are an average of $9.1 Billion in mortgage resets bubbling up between April 2010 and October 2012. That would be 30 months of bubble for a total of 30x9.1 = 270.3 Billion of bubble. So the question is: How much of that bubble will turn bad and can the banking system absorb it all? How much has already been written down, if any? What will this do the fragile real estate recovery?
I don't think anyone knows. But if you look at the older chart, you'll see that sub-prime was as large as the Alt-A and Option ARM stuff combined . . .

Mitigants to the the next wave of resets are several. Credit quality is generally better. Interest rates are lower. Bank capital ratios are stronger. Leverage throughout the system is lower. Some of the worst of these loans have already defaulted. Banks carrying values have to be lower than they were in 2007.

Meanwhile, unemployment at 9.7% means that some of these loans that were made to good creditors are less good now.

Personally I think the combination of better capital ratios for the banks and lower carrying values means that we're in much better shape to deal with this then we were in 2007. That doesn't mean the housing market isn't going to suck wind for some time to come, though.

Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Bloomberg update
Old 04-20-2010, 01:32 PM   #22
MichaelB's Avatar
Join Date: Jan 2008
Location: Gone fishing
Posts: 25,770
Bloomberg update

Bloomberg article here Housing Market May Not Be That Weak, Shiller Says: Tom Keene - reporting that Shiller has moderated slightly his previous tone
“The indicators have turned up, so my case has weakened a bit,” Shiller said. “While home price increases began to slow in November, they haven’t declined on a seasonally adjusted basis. We’re kind of in a holding pattern, where it’s very hard to tell.”
He has gone from "I think housing prices will continue to decline" to "I'm not sure".

MichaelB is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
How can I convert pre-2009 dollars to 2009 values? Amethyst Other topics 12 10-04-2009 06:22 PM
Shiller on the housing bubble twaddle FIRE and Money 18 09-06-2007 05:49 PM
Shiller Questions Bush Plan on Soc. Security intercst FIRE and Money 4 03-25-2005 05:08 AM
Shiller Data bongo2 FIRE and Money 5 06-23-2004 11:50 AM


All times are GMT -6. The time now is 09:31 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.