The collapsing mortgage market loss can total more than a trillion dollar by the end of the year –what is the impact on stocks, bonds and currencies?
Fred Day
May 7, 2007

The mortgage market is falling apart. The mortgage defaults are rising very rapidly. The mortgage bankers scared like never before. The real estate collapse has just started. The artificial liquidity was unable to hold the real estate market any further. But a trillion dollar of that is already trapped in the residential real estate mortgage market. Investment bankers, hedge funds and others are all trapped. They do not have to disclose the risk till end of the year. Their only hope is that the real estate market will recover before end of the year.

The trapped money will be written off at the end of the year. The effect on stock market and dollar can be very severe. The stock market’s presumed liquidity will be in the negative, as people demand redemption of funds at the end of the year.

Interest only loans and negative amortization are the worst cases of all. The subprime market problems have spread to the broader mortgage sectors.

The Treasury bonds can rise handsomely this weak with overall bearish news on the economy
Sam Adelton
. The massive jump in Treasury prices will happen between now and the end of the year as Fed finally realizes they are trapped by deflation like never before since 1929-33 Great Depression.
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News this week shows economy is headed for a deep recession slowly but steadily – time to buy bonds an sell stocks
Sam Adelton
When Nikkei was in upper 40,000s and was rising every day, no one could believe Nikkei will fall below 10,000, Japanese economy will hit by deflation and after twenty years, Nikkei is still below 18,000.
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The collapsing mortgage market loss can total more than a trillion dollar by the end of the year –what is the impact on stocks, bonds and currencies?
Fred Day
The mortgage bankers scared like never before. The real estate collapse has just started. The artificial liquidity was unable to hold the real estate market any further.
READ MORE>>

News on corporate take over deals reaching options floor a few days before actual signing of the deal and breaking news - worst insider scandals in the history of the stock market?
Alan Hershey
It is the responsibility for the stock exchanges and options exchanges to control and notify the SEC of such happening. They did not. Some are saying the stock exchanges themselves are involved in the scam.
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Weaker corporate bond prices suggest the debt market is growing concerned about corporate earnings in the second half of the year
Peter Oberois
It is commonly known as divergence in the market. Divergences eventually get corrected through nasty and lengthy bear markets or sharp drop in market prices.
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French unrest with conservative leadership may be a reason for selling Euros
Karen Zuba
The turmoil will spread into other parts of the Euro zone damaging the economics of the region. It is time for selling the Euro.
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The lack of job growth spreads beyond homebuilders – deflation in full control as mortgage defaults skyrocket
Peter Oberois
The artificial liquidity created in the last six years has hidden the stealth deflation within the economy. The employment data finally confirms that the stagflation that started in 1981 has now slowly turned into a deflation.
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