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Ben Stein is wrong. The hedge funds and institutional traders were the ones who drove the market higher using leverage. When the market turned, they have to bail out quickly because they're trading with 85-95% borrowed funds. A 10-15 percent loss can wipe them out as we're seeing with many of these funds invested in bonds.
Everyone seems to have crowded into the large cap stocks; the Dow, the S&P 100, and the Nasdaq-100. Those have run up nearly 50 percent in the last year and have corrected the least of late.
Ben Stein is either clueless or is intentionally misleading people. Here is a schedule for ARM Resets through 2008. Loan defaults are much more widespread than the cheerleaders want us to believe.
(source JP Morgan)
March 07 = 6 billion $
April 07 = 7 billion $
May 07 = 9.8 billion $
June 07 = 10 billion $
July 07 = 12 billion $
Aug 07 = 17.5 billion $
Sept 07 = 18 billion $
Oct 07 = 20 billion $
Nov 07 = 23 billion $
Dec 07 = 22.5 billion $
Jan 08 = 25 billion $
Feb 08 = 25 billion $
March 08 = 23 billion $
April 08 = 22.5 billion $
May 08 = 24 billion $
June 08 = 18 billion $
July 08 = 20 billion $
Aug 08 = 25 billion $
Sept 08 = 23 billion $
Oct 08 = 23 billion $
Nov 08 = 23 billion $
Dec 08 = 20 billion $
I don't have any investments, and I wonder about the "economy". Seems to me that there are more share of stock with a dollar amount more than there is money in circulation.
How ever, I've looked into this, and according to some infomercial, the biggest mistake people make it one of pride. They just can't seem to sell losing stocks and take the loss. They tend to sell stocks that are up and keep the losers hoping the rebound.
Ben Stein is either clueless or is intentionally misleading people. Here is a schedule for ARM Resets through 2008. Loan defaults are much more widespread than the cheerleaders want us to believe.
(source JP Morgan)
March 07 = 6 billion $
April 07 = 7 billion $
May 07 = 9.8 billion $
June 07 = 10 billion $
July 07 = 12 billion $
Aug 07 = 17.5 billion $
Sept 07 = 18 billion $
Oct 07 = 20 billion $
Nov 07 = 23 billion $
Dec 07 = 22.5 billion $
Jan 08 = 25 billion $
Feb 08 = 25 billion $
March 08 = 23 billion $
April 08 = 22.5 billion $
May 08 = 24 billion $
June 08 = 18 billion $
July 08 = 20 billion $
Aug 08 = 25 billion $
Sept 08 = 23 billion $
Oct 08 = 23 billion $
Nov 08 = 23 billion $
Dec 08 = 20 billion $
ARM resets don't equal loan defaults. Some are linked to 3 year, 5 year and 7 year ARMs. Also, many ARMs are refinanced, some into fixed rate mortgages. Also, keep in mind that defaulted mortgages also have salvage value, for example on a $400 K mortgage a forced sale often can result in proceeds covering 90% or so of the unpaid balance.
ARM resets don't equal loan defaults. Some are linked to 3 year, 5 year and 7 year ARMs. Also, many ARMs are refinanced, some into fixed rate mortgages. Also, keep in mind that defaulted mortgages also have salvage value, for example on a $400 K mortgage a forced sale often can result in proceeds covering 90% or so of the unpaid balance.
That is optomistic...I think it is more like an average of 80% recovery and probably less when forclosures are hitting all time highs and the market is slow.
That is optomistic...I think it is more like an average of 80% recovery and probably less when forclosures are hitting all time highs and the market is slow.
Agreed that neither of us knows, and I can't find any data concerning this. My main point is this, the poster showed that a little over $20 billion in ARMs becomes reset each month starting in a few months. What % of that is really going to become written off money, vs just info for info sake?
Agreed that neither of us knows, and I can't find any data concerning this. My main point is this, the poster showed that a little over $20 billion in ARMs becomes reset each month starting in a few months. What % of that is really going to become written off money, vs just info for info sake?
Very true. Another thing that cracks me up about the consensus on ARMS is that THEY ALWAYS GO UP, when of coarse that is not true.
I have been following my stock portfolio for 4 years now and this is there worst week ever. So far they are down 5% this week alone. That is a big drop in just four days.
I think that the stock market crash is the first of many problems that will push America and the world economy into a depression. The depression started today.
Credit crunch, debt, trade deficit, huge drop in real estate, foreclosures, lack of respect for American leadership and many other things have caused the economy to crash.
Maybe you should reconsider your method of choosing stocks.
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