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Wednesday, August 13, 2008

The 'Recast' Bomb

Could you survive a 20% increase in your mortgage payments? How about 40%? 60%? 80%?!

Starting in 2009 option ARMs start to 'recast' in ever increasing quantities, from less than $10 billion a quarter to $20 and then $30 billion. The bulk of these recasts will occur between 2010 and 2012.

Bank Debt Risk Rises as Writedowns, Losses Exceed $500 Billion: “The cost of protecting bank bonds from default rose after UBS AG and JPMorgan Chase & Co. pushed writedowns and losses from the worldwide credit crisis to more than $500 billion.”

These write downs don’t yet include any real Alt-A (option ARM) losses. Estimates for total losses to the financial system now exceed $1 TRILLION. The highest estimates are for losses of $1.6 TRILLION.

Good thing the Bulltards on CNBC are calling a bottom in equities eh? The fastest way to blow your account is to listen to Jim Cramer foam at the mouth and bounce around in front of the camera like a retarded ninja on speed.

“Buy! Buy! Buy!”


Anonymous said...


dougiefreshhh said...

Everytime i catch Cramer, he is apologizing for his bad suggestions.

good call on DUG.. seems to be relaxing a bit. I got out yesterday.

I'm thinking SKF has 10-20% rise potential???

I wish the CNBC media types would have a "card cam" like in the world poker championships. Guys like Cramer would show that they own nothing they are pushing.... Bluffing it all for the sake of ratings.... the average consumer is doomed.

At the end of the day....just the facts and Economics 101 will prove right.

SEV said...

Big B,
What do you feel about Ambrose Pritchards article about the dollar and the Euro's race to the bottom/ It makes sense that since the only thing adding to the GDp is out exports and that the only option the Eurland economy has to grow is to cut rates will there really be a currency war? Trichet keeps wanting to be the inflation fighter but sweet jesus the continent is coming apart financially and the Italians are rounding up gypsies again, AND we just sent "Humanitarian" aid to Georgia. Shit, we didn't even get that to the katrina victims but somehow we have C-130's to drop soldiers to Georgia!Somethings rotten.

Anonymous said...

if including "third-party" charts into your blog (which I do highly respect) would it be possible to post a link to the source document as well? Many Thanks!

Ben Bittrolff said...


Sorry. For some reason I thought it was on the chart. I sourced the chart from the Wall Street Journal (WSJ). The exact link escapes me at the moment.

sc said...

Roubini is now calling for $2bn. See close up of the mess at the Calculated Risk blog.

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