Getting a kick out of this.....

So, people have adjustable rate mortgages... and those mortgages went from 2%-6% in a couple years.... Who knows why they didn't try and lock in to the rates when rates were at 2%, but Hindsight is 20/20......

The higher that has gone the higher the foreclosure rate has gone. Naturally.

Some people have 2 kinds of mortgages... interest only, and there is an deflating equity loan... Where you buy your house and as it appreciates you never gain any equity....

Suddenly, there are more homes than there are people to buy them.... and suddenly the prices drop.... over the weekend there was a report that the average price for a home has gone down. this hasn't happened since 1950.... The fast increase in the Fed rate an increase from 2-6 means that the mortgage increases on a 200K home is $8000 per year increase. which is $666 dollars per month. $700 vs $12000 per month. This has flooded the market with homes.
This says we will see the largest recession since 1950 unless it is handled well... which means cut the fed rate.... Yesterday.

The further case for a recession.... Monday we got a report that credit card defaults were increasing. Also Wallmart has a program where you can take cash to them, and it can be withdrawn in Mexico... So if you are an illegal alien worker...sorry, undocumented worker. you can send money home and then they spend it at walmart....Evil bastards. That program, Walmart reported is down in revenue... Which means.... Lower undocumented worker employment. We are about to start loosing even more jobs in the financials. Europe overnight is starting to lose their "Financials". That will be next weeks story, loss of jobs in financials... But that's wont be enough jobs to really make a difference.

The big change will be when people (not in California and Florida) realize that their homes are worth 20% of what they were. But in California and Floridawe will be looking at 30-35% less. Your average million dollar hovel in California suddenly is worth 700,000. on an interest only loan you may as well default, but if your in an arm, you may have a chance.... But you owe 4% on 300,000 you don't have. That is 1,000 per month that....... you're paying for nothing....This is where the Recession comes in, no home building... and a huge hole in all our financial institutions.

My theory of the Real fear in the market is that the fed will raise the rate, which could kick off a depress on. and "Uncle Ben" turns into Nero.

The funny part is that our President, has a plan to bail out the lenders....Well the plan is to stop or slow the foreclosures... this plus some rate cuts will hopefully give us the "Soft Landing" our economy will need to suck up a loss of 20% or our economy...

I hate Dubja.... Why the hell would he step in and try and do the right thing.... Really pissing me off that he is about to make me make some money...

But, these things put together, mean a +130 point run in the DOW right off the bat. Since I am short term Bullish, I bet I just made 5%-10%..... Unless Uncle Ben says the word "inflation" in which case I'm down 1%

After that the Bears will eat me...... Just saying.