Mr. Housing Bubble T- Shirts. - For Interest Only (loan)

[John Kierein]

http://www.usatoday.com/money/perfi/housing/2005-08-16-housing-bubble_x.htm

[NEOWatcher]

Without knowing the purchasers of the shirts, how can they say the sales are an indicator of the housing market.
Why is "hundreds" such a considerable number for an internet site?
Isn't it just possible that they are being bought only because they are cute? (or mostly)

[John Kierein]

If interest rates go up, the value of the mortgages drop on the resale market and the owners of those mortgages lose a lot of $. S & Ls are put under a lot of pressure and many may go under, causing a run on deposits. The house prices drop because nobody can afford the payments. Speculators have to sell at a loss. Home owners with interest only loans find that their payments go way up because their rate changes with the market. Same for those with adjustable rate mortgages. They can't sell their houses and have to go into foreclosure. S&Ls have to take houses they don't want and are stuck with them and have to go bankrupt. The whole economy goes bust. It's worse than the S&L crisis of the 80s which was based on inflated value for commercial property and not the much larger housing market. Home builders go into deep freeze and have to make their payments on the land and homes they still own and go bust. Suppliers to the home building industry go bust. The stock market crashes. Bankruptcies soar. Unemployment hits new highs. The Fed can't lower interest rates because that causes the dollar to crash and inflation to go nuts, driving the price of oil to $1,000/barrel like the devaluation of the German mark pre-WW2. A new Shirley Temple comes along to make people happy. A comet comes by and hits the earth and millions die, solving the problem.