It's all downhill from here in regards to the mortgage resets. #msg-20280680 December it he month of pain. With the Fed lowering rates the resets are not rising as much so that take some of the pain away from ARM holders. Hopefully they play it smart and just turn over to fixed rates.
With reset schedules going down they will have less of an impact on the housing and the economy. The low will be in Jan-Mar 2009. So housing will stabilize through 2008. that is why Bernanke is talking that the economy will be slowest Q1-Q2 2008. Its about the lag. So we might get loose some of that flight to quality as people start to pick up some deals in equities. Housing and Financial. But watch out for 2009 as I believe that the Fed is going to be pushing rates up again to combat more of that risk taking in the ARM market. My guess is we'll be up around 5.5-6.0% on the 10y by the end of 2009
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