Has anybody been following this news regarding "Alt-A and Option Arm" loans?
Here is an extract:
"The trouble now is that the insanity didn't end with sub-primes. There were two other kinds of exotic mortgages that became popular, called "Alt-A" and "option ARM." The option ARMs, in particular, lured borrowers in with low initial interest rates - so-called teaser rates - sometimes as low as one percent. But after two, three or five years those rates "reset." They went up. And so did the monthly payment. A mortgage of $800 dollars a month could easily jump to $1,500.
Now the Alt-A and option ARM loans made back in the heyday are starting to reset, causing the mortgage payments to go up and homeowners to default."
They are predicting another Trillion dollars to go down the gurgler over the next couple of years!
Is the worlds biggest consumer imploding and going to take the rest of the planet with them?
Can we just ignore the US true position, and expect their Gov. to fix these debarkles by printing money and throwing it in the streets?
Is there now any other option than to re-inflate the asset bubble?
"What a mess Mr Hart"