In March I posted that I thought the Mortgage Insurers were about to collapse. A couple months later not much has changed.
One half of year since the high the index shows little inclination to move higher. Price is approaching the next angle in the fan which should provide resistance and pressure downward.
The Mortgage Investment index has been dropping for 52 weeks. The last eight weeks have been about as lethargic as I have seen. There is no momentum at all to the upside. It appears to me as if the goverment is about to change the rules such that the insurers and investors are going to take the hit for the housing problems. If this does happen, then I find it hard to believe that anyone will be willing to invest in US companies on a large scale for the next 10-20 years.
“then I find it hard to believe that anyone will be willing to invest in US companies on a large scale for the next 10-20 years.”
Are you referring to Mortgage companies only?
Fred – If they do it then it will affect all companies. Imagine paying $1000 to try to hit a pitch off a major league pitcher. If you do, you get $1,000,000. Many will try. A few will win. Now imagine paying the money but the pitcher is allowed to move home plate anywhere – but the batters box stays put. No one will ever pay to play again.