First, I like your website…

Second,
How do you think the conforming loan limit ($417K) revamp to higher limits will affect the San Diego, L.A. and other high price real estate markets and it’s revaluation/correction?

My initial response to this is it really stinks for those millions of us that live in high cost areas (like L.A. and San Diego) that have been waiting for this market correction so prices will come down into an affordable range. Now this bailout comes along and props up the mid to high price range properties because more people can afford them again, and it bails out all the speculators from high interest jumbo loans.

Correct if I’m wrong but I’m thinking, “what a crappy system!”

What are your thoughts on this?

Debt monetization is exactly what the government will do if necessary.

Considering the real problem is the illiquidity of the secondary mortgage market (and general bond market), the overall question is now that risk has been repriced (and likely properly so), how do we get on with the rest of our lives?

I’m hoping that homes will be seen more as a place to live than the means to a financial end. I would like to actually have a home again in a few years. I believe we have misallocated our country’s valuable resources to real estate. Stupid, stupid, stupid. Especially with China snapping up productive capacity. If/when China rebalances, we’re likely to see some pretty strong inflation.

In the short term, I’m expecting deflation… medium term, inflation, and long term neutral.

Chuck Ponzi

bid 19.50
ask 22.80

The roughly corresponding call, the JAN 110, has a spread of 2, still quite high, but nothing like the 3.2 spread on the put.

What do you think of having the treasury print money and use that as a stimulus to income in the US.

Might be a way to stimulate some kind of infastructure devlopment, devalue the currency, inflate income while not running up more debt.

I am not talking a huge ammount as most of the FB are finished. Just a 4-5% increase in moeny supply that might produce partial social value.

I worry that it would be overdone and make a Japan style deflation.

We could be heading for that global credit event this fall perhaps early spring.

Who will survive?

Yes, all 3 of them.

I’d love a link.

On their site, they’re still 7.0% for 30 yr fixed jumbo. as of 12:31 PM Eastern 2007-08-03.

See:
https://www.wellsfargo.com/mortgage/rates/

Chuck

Great.

I sent Dodd a few letters about the mistakes of a bailout.

I now get spam messages from his staff about working on his campaign

Perry wrote that U.S. Senator Christopher Dodd called him yesterday morning “seeking an understanding of ‘what is really going on and how can I and Congress help?’” Dodd, a Connecticut Democrat, is chairman of the Senate Banking Committee.

That, my friends, is the problem. Here comes Senator Bail-em-out, President Wannabee, ready to spray gasoline on the fire.

Talk about pushing on a string to commence in

5…4…3…2…1

I figured this action would draw a response.

Anyhow, seems like carnage would have been worse in the market except for a couple odd late day trades.

There also seems to be a low volume float upward and heavy selling downward all over the financial stocks exposed to this stuff.

I figure you went through the Credit Suise Report on the numbers for subprime. Should be able to get a idea about the default magnitudes that we will see.

It an interesting show so far. Cramer and his ilk are calling for a rate cut and don’t seem to realize that we are at the end game.