I know, which makes your desire to have the Fed raise interest rate even more ridiculous.
I am more worried about the value of the dollar and inflation then housing.
Excerpt:
Given that the Fed and European Central Bank have already injected well over $150 billion since August, Bernanke obviously lied about his ballpark figure. But just how big is this subprime mess?'Marked to Market' . . . Total $ 3.6 Trillion. . . . LOL, LOL !To measure subprime losses, we have to first find out the size of the subprime market. Fed data pegs the total US residential value at $20 trillion and the US residential mortgage market at $10 trillion. This number is substantial, as it eclipses the US treasury market of $9 trillion.
As we have shown in the pie chart above, this 80% haircut applies to potentially $2 trillion worth of mortgages if investors of those mortgages were to exit today. The loss is not $150 billion, but more like $1.6 trillion.
What's more, the ABX shows that since September 2007, the value of AAA mortgages has begun to crater, and now trades at a stunning 70 cents on the dollar. This means if all AAA and Alt-A mortgage portfolios were to be marked to market, the loss would amount to another $2 trillion.
Happy Thanksgiving!