Now with LIBOR and all the other short term rate indexes looking like this: Libor US$ Fixing 12/19 12/18 Change OVERNIGHT 0.11000 0.11250 -0.00250 1 WEEK 0.26000 0.26125 -0.00125 2 WEEKS 0.52500 0.59125 -0.06625 1 MONTH 0.47375 0.50750 -0.03375 2 MONTH 1.17500 1.21500 -0.04000 3 MONTH 1.49750 1.52500 -0.02750 4 MONTH 1.62875 1.65625 -0.02750 5 MONTH 1.73375 1.75375 -0.02000 6 MONTH 1.84500 1.86375 -0.01875 9 MONTH 1.98875 2.00250 -0.01375 12 MONTH 2.09250 2.09875 -0.00625 The big boom of resets coming soon is going to actually lower many payments vulnerable to walkway. This will soften the blow. Assuming they get economic activity back up with all of this stimulus and money printing, I think they will be successful in preventing this climate from worsening. Look to late 2009 for an upwards revaluation of financials. http://globaleconomicanalysis.blogspot.com/2008/12/arms-reset-problem-vanishes-into-thin.html
This has been debunked over at Ticker Forum. http://www.tickerforum.org/cgi-ticker/akcs-www?post=75781