We've talked here about it, now it's starting to hit the mainstream.

ad9898_3

mbga9pgf wrote: »

The reason for pointing out Option ARM was not suggest the end of the world was nigh; it was to point out that the financial crisis is far, far from over to those who were convinced we were seeing a strong recovery.

The British media/government won't thank you for that, the only tool they have got in the box now is to suppress bad/honest news and report good/spun/untruths, propaganda is all they have left, thank god for internet where we can see and discuss all the crud that lies beneath the media spun veneer.

System

kennyboy66 wrote: »

Doesn't look like much of a story to me - am I missing something ?

Basically it will have an impact, but on nothing like the scale people would have you believe.

I personally find it hard to believe that the banks in question haven't already made allowances for this to some extent as well.

ad9898_3

purch wrote: »

You really need to lighten up !!!

Yes it's serious, and will affect us all, but unless you can think of something you or I could do that will have a major affect on the U.S. Mortgage market, other than getting yourself into a huge 'tiswas' everytime it's mentioned (which in case you are wondering, will NOT have any effect whatsoever on the problem), then there is basically s*d all we can do about it.

I agree Purch, but only partly, we can't do anything, you're right there, however what we can do is be prudent and not get ourselves into anymore more debt at a time when we are being spun crap in the media about things returning to normal, when clearly they are not. In other words better to be safe than sorry.

kennyboy66_2

mbga9pgf wrote: »

The reason for pointing out Option ARM was not suggest the end of the world was nigh; it was to point out that the financial crisis is far, far from over to those who were convinced we were seeing a strong recovery.

Ahh....

So those near daily posts that you used to put out titled "Option ARM timebomb", usually peppered with phrases like "Armageddon" and "will make sub-prime look like a walk in the park", all with the same out of date graph, were just done to make the point that there won't be a strong recovery.

System

"Option ARM will eat your children and rape your granny" was the latest thread iirc.

kennyboy66_2

themanbearpig wrote: »

Outstanding option ARM loans in the U.S. total about $500 billion.

It would seem pretty unlikely that if there are 564,000 mortgages oustanding that the amount averages $900k per mortgage.




If someone tells you its raining, it doesn't take much effort to open the window and stick your hand out.

System

kennyboy66 wrote: »

It would seem pretty unlikely that if there are 564,000 mortgages oustanding that the amount averages $900k per mortgage.

It also seems unlikely that EVERY one will reset.

Nearly 61% of option ARMs originated in 2007 will eventually default, according to a recent analysis by Goldman Sachs.

If it's fair to say those taken out in 2007 will have the most problems, then the total amount of resets will be significantly lower than 61%.

mbga9pgf

....Apart for the fact 61% of the mortgages likely to default will also be approaching either 110% to 125% of the original loan amount and still growing.

The reason this I believe was kept low key has to do with the government taking each day as it comes... After Lehmans went bust, were they going to sing from the rafters that big problems still loom whilst they desperately need funds for Gilts and bonds from abroad?

Nope, didnt think so.