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skibum
2006 Oct 24, 7:20am
HARM and allah,
RE: MBS's, you guys suggest one resolution is increased compensation for the increasing risk of these products. A more catastrophic yet plausible outcome seems to be the collapse of more than a few hedge funds, or even old-school mutual funds and other investment vehicles due to massive mortgage defaults leading to massive loss in MBS valuations. Possible?
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Plateau, pause, recovery, "bear trap"? Maybe it's just a good, old fashioned, "dead cat bounce".
The technical reasons usually given for such false recoveries in equity markets have to do with things like short interest, "overbought/oversold" strength conditions, and speculative self-fulfilling prophecy. But everyone knows (except some desperate realtor who write newsletters in SFWoman's neighborhood), the housing market is not the stock market.
The question is, why do you think a "dead cat bounce" could/would/will/is happening in residential real estate?
--Randy H
#housing