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so, by their math, they just need to increase rates to offset the loses... loses that were due to them raising rates on sub-prime adjustibles...
Right? Right? No problem here.
(Can anyone say death spiral?)
(and oh yeah, once the rates go up, the inventory of current homes for sale will increase because the pool of available purchasers decreases due to the rate increase. More homes on the market will create more deflationary pressure on the current homes and more homeowners will see their equity evaporate and therefore will want to "cash in" if possible or walk away if they are too far underwater... and more death spirals ensue! Great fun! If you aren't a homeowner...)
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