When Will We Reach the Bottom?

In the recent past I've pondered the question of "where's the bottom of the stock market." Now I ponder "When will we reach the bottom?"

A lot is made of the increasing rate of mortgage foreclosures, more this month than last month, and so on. Eventually, there will be a month with fewer than the previous month, the monthly rate of foreclosures will decrease, and we will have passed the peak... of foreclosures. Lets assume that the bottom of the stock market will be around the same time (could be longer, could be a little sooner).

The rate of foreclosures is strongly influenced by the schedule of when adjustable rate mortgages (ARMs) readjust from low teaser interest rates to high rates, which are often unaffordable and lead to foreclosure. The peak in the number of subprime ARM interest rate resets per month came at about the end of 2007, tapering off to a low right about now in late 2008 (about month 22 in the graph below, where January 2007 corresponds with month 1).


However, another wave of ARM rate resets is coming and will peak about two years from now. It has been pointed out that the holders of these mortgages, which are of better quality than subprime, might be able to refinance to a fixed rate and afford the transition. True, but this is potentially offset by the fact that many of the associated property values will be worth less than when they were purchased. Statistics say some will fail so that we'll have another wave of foreclosure problems growing to a peak over the next two years.

That's the story on residential mortgages. What about commercial mortgages? According to the Associated Press,

the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure. Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.

"We're probably in the first inning of the commercial mortgage problem," said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey.

And there are compounding factors.

Unlike home mortgages, businesses don't pay their loans over 30 years. Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end.

There's also a chain-reaction effect. As the economy turns down, retailers who are renting space in malls will close some of their stores and stop paying rent. The mall owners will loose their ability to pay their mortgages, and more commercial foreclosures will ensue, placing greater burden on the financial sector, which will be reflected in the stock market.

So when do we reach the bottom? Here's another hint.

About $20 billion [in commercial mortgage payments] will be due next year, covering everything from office and condo complexes to hotels and malls. When those $20 billion in mortgages come due next year — 2010 and 2011 totals are projected to be even higher — many property owners won't have the money.

With both residential and commercial real estate foreclosures possibly peaking out two years from now, it doesn't look like the bottom will be here too soon. This malaise will likely be with us for a while. We seem to have caught what Japan had, for over a decade, starting in the late 1980s.

Psssst... Do Something

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

Epson Stylus CX4200 Requires All Colors to be Replaced?

Editor's note: This is a very popular issue, and blog post. I've updated it to read more easily. Please comment below on why you're searching this topic. Thanks

I think I might have discovered why I was given a "free" Epson StylusCX4200 when buying a laptop. This article applies to more than just the CX4200.

Let me give you the bottom line:

1) As designed, you have to buy ALL colors when replacing cartridges, even if you've only been printing in black.

2) There are work-around options described below....

Probably like you, I tried to print a black document, and the ink-out light remained on, even tho I changed the black ink. Then I discovered this question posed to Epson:

Will the Epson printer still work if one of the ink cartridges is empty or missing? ("no").
FAQ answer to the question.

You'll love this one too:

Q: Why is the Epson color ink cartridge out of color ink if printing has been in black only previously?

A: The Epson printer uses small amounts of ink from each ink cartridge when printing, even if printing only in black. This is done to clear the print head (avoid clogging).

Work-Around Options:

OPTION 1: You can buy cartridge "refill kits" BUT, need a little device to re-set a micro-chip in each cartridge (even if you fill the cartridge, the micro-chip will tell the printer the cartridge is empty if the chip isn't reset):

Refilling cartridges offers the greatest economy possible for the user, as long as it is done correctly.

Original cartridges from Epson printers have a small memory chip that works as a counter. As the printer uses the cartridge, it updates that small memory. When the cartridge is empty, that circuit knows there is no more ink. Simply putting more ink in the cartridge does not enable it for use, since its chip will still indicate that the cartridge is empty.

Here is a link to learn about this resetter hardware. It costs about $20. Check to be sure it works for your particular type of epson. I cannot vouch for it, but if you plan to re-fill your cartridges, this might be the way to go.

OPTION 2: From a commet (Thanks!). Try SSC utility... free download, but is limited to PCs (not macs). It allows you to fool the epson into thinking the ink levels never go down. Wait until the ink really starts fading and then replace the cartridge with this sweet little program. It also allows resets for ink pad problems when the printer decides to stop printing all together because the cleaning pad page count has reached the predetermined number.

Good Luck, and again, please offer any advice you think helpful as a comment!