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Economy and General Discussion
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Re: Credit Market Sea Change?
Posted by: jeffolie
Date: 06/30/2007 04:35PM
The $Trillion reset in ARMs over the next six months will roil the foreclosures and delinquencies. Since it can take six more months for the banks to actually take possession and then start to sell the homes, that pushes the day of diaster to about a year from now.
Why diaster, because by a year from now the rating agencies will be forced to declare the CDOs as junk. That’s Trillions in leveraged and borrowed funds collaterialized, squared and synthetic complex financial instruments marked down to 50% or less.
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