Quick Note on the CSFB ARM Reset chart

The link's a chart you've probably seen before -- what CSFB said the outlook for adjustable rate mortgage resets looked like 15 months ago. At that time, we were looking at a lot of resets through the end of 2011, and so probably artificially supported housing prices through 2013. But,
The green bars are option ARMs. Option ARMs let you dig your hole deeper by recapitalizing interest. Banks are enforcing the limits on underpaying since the credit crunch, so these homeowners will fail sooner than they expect.
Nouriel Roubini's jingle mail tsunami, in which underwater 'home owners' walk away from their houses, will eliminate a lot of these mortgages. The loan takers are stretching to pay the mortgages typically, so probably won't stick around another three or four years to watch their home values deflate.
I really think the adjustment will be mostly over in the next two or three years, and after that inflation will bring home values back in line with incomes and rents.