sub-prime securities rise: ABX index up on 7/18

[rose-colored-coolaid]

[deejayoh]

[Eleua]

[Matthew]

[Eleua]

[S-Crow]

[Eleua]

[mike2]

I can't wait to see some data on how many of last years buyers using nontraditional loans could actually qualify for the same purchase price on a fully amortized loan.

I'd guess it's less than 1 in 5. Using historical averages, it may be as low as 1 in 50.

[Matthew]

[redmondjp]

Hey, my neighbor just did another cash-out refi (or a HELOC), the fourth one in five years. What's the problem? He just got suckered into spending $19K of it on new windows from a high-pressure-sales door-to-door window seller (Evans windows, see http://www.vinyl-replacement-windows.co ... .php?t=674). As soon as he gets the $ in his account, it's all but gone in a few months.

I'm not sure of the exact numbers, but he owes several times the original price of the house when he purchased it back in the 1980s.

If more people were doing the same as him, our retail economy wouldn't be slowing down as it is right now.

Come on, listen to the Man, spend, spend, SPEND!

Saving is SO 1950s . . .


[and unfortunately, no, I really did not make any of this story up]

[Matthew]

Redmonjp,

But Ben Bernanke says that mortgage equity withdraw (MEW) is not as big of a factor in our economy as is home prices!! Don't you believe Big Ben?!

[rose-colored-coolaid]

[redmondjp]

[sniglet]

The ABX index continued to avoid further declines today (July 31). This marks at least least 3 market days where the ABX has managed to arrest it's hitherto precipitous decline.

There was a wee bit of slippage on the highest rated tranches, but the lowest categories actually gained a smidgen.