But the Internet is forever.
It’s been over two and a half years since the mortgage research group at Credit Suisse published this chart:
Here are a few of the places you can find this chart being used to support conclusions about the economy:
Around the same time in the fall of 2007, housingwire.com, an excellent source for professionals in the housing finance business, also brought it to our attention.
Then it took off, and careened around the financial blogosphere, to be used and abused as each cyberpublisher saw fit.
At least Mish Shedlock showed he got the joke on April Fool’s Day of 2008. He used the same chart as supplied by a fright-merchant in the newsletter business, but to make an entirely different point.
Mish looked at the actual rates for 1 year Constant Maturity Treasury and for LIBOR, and came to the conclusion that half or more of the ARMs would reset to lower interest rates if rates stayed were they were in the spring of 2008. But rates kept heading down, so that nearly 100% of the loans were looking at rates being lowered by the time the 2009 and 2010 mortgage resets rolled around, and 1-yr CMT and LIBOR were plumbing new depths.
“Market oracle” David Haas warned us of disaster in October of 2008, using the same chart with the same data behind it.
On the other hand, some see opportunity in their projections for financial carnage. Check out this pitch for a distressed mortgage opportunities fund open to Joe Sixpack with only $20,000 minimum investment.
Here’s the alarm being raised in May of 2009 by Banker Office (online magazine)
Clusterstock’s Chart of the Day for the autumnal equinox, September 21, 2009 stayed with the looming disaster theme.
In seekingalpha’s editor’s pick for today, November 10, 2009, the same chart is used as part of the rationale that we should fear a Eurodollar bubble.
So what did we learn from the show tonight, Craig?
- That old stale data with an impressive looking chart can have a life of its own.
- That commentators will make any point they want to make, no matter what the chart looks like.
- That people will still screech about an ARM mortgage reset crisis even though half the mortgage loans in the original data don’t exist anymore, and those that do exist are seeing their mortgages reset from a mid 4% average rate down to just 3% or so.