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March 10, 2008 at 1:32 PM in reply to: Dow dips to 11893. We are below 12000 for the time being…. #166835March 10, 2008 at 1:32 PM in reply to: Dow dips to 11893. We are below 12000 for the time being…. #167156
(former)FormerSanDiegan
ParticipantAnother interesting point from the daily AP report is that it appears the Fed’s desperate measures to pull out of a financial decline are failing:
“There is a growing sense that the Fed is trying to pull out all the stops and use all the tools they have but with little net effect,” he said. “It just doesn’t appear to be the quick-fix that investors had been hoping for. What we’ve seen is people continuing to press very bearish bets.”
While they may proven correct, I find this a little comical. It takes at least 6 months for rate cuts to ripple through the economy. We won’t know that the initial cuts have failed until at least the second half of 2008. It will be 2009 before we can confirm that the Fed is pushing on a string.
March 10, 2008 at 1:32 PM in reply to: Dow dips to 11893. We are below 12000 for the time being…. #167160ParticipantAnother interesting point from the daily AP report is that it appears the Fed’s desperate measures to pull out of a financial decline are failing:
“There is a growing sense that the Fed is trying to pull out all the stops and use all the tools they have but with little net effect,” he said. “It just doesn’t appear to be the quick-fix that investors had been hoping for. What we’ve seen is people continuing to press very bearish bets.”
While they may proven correct, I find this a little comical. It takes at least 6 months for rate cuts to ripple through the economy. We won’t know that the initial cuts have failed until at least the second half of 2008. It will be 2009 before we can confirm that the Fed is pushing on a string.
March 10, 2008 at 1:32 PM in reply to: Dow dips to 11893. We are below 12000 for the time being…. #167192ParticipantAnother interesting point from the daily AP report is that it appears the Fed’s desperate measures to pull out of a financial decline are failing:
“There is a growing sense that the Fed is trying to pull out all the stops and use all the tools they have but with little net effect,” he said. “It just doesn’t appear to be the quick-fix that investors had been hoping for. What we’ve seen is people continuing to press very bearish bets.”
While they may proven correct, I find this a little comical. It takes at least 6 months for rate cuts to ripple through the economy. We won’t know that the initial cuts have failed until at least the second half of 2008. It will be 2009 before we can confirm that the Fed is pushing on a string.
March 10, 2008 at 1:32 PM in reply to: Dow dips to 11893. We are below 12000 for the time being…. #167256ParticipantAnother interesting point from the daily AP report is that it appears the Fed’s desperate measures to pull out of a financial decline are failing:
“There is a growing sense that the Fed is trying to pull out all the stops and use all the tools they have but with little net effect,” he said. “It just doesn’t appear to be the quick-fix that investors had been hoping for. What we’ve seen is people continuing to press very bearish bets.”
While they may proven correct, I find this a little comical. It takes at least 6 months for rate cuts to ripple through the economy. We won’t know that the initial cuts have failed until at least the second half of 2008. It will be 2009 before we can confirm that the Fed is pushing on a string.
ParticipantLIBOR Index Watch …
Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.
Current 1-year LIBOR index : 2.71%
This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.
They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.
ParticipantLIBOR Index Watch …
Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.
Current 1-year LIBOR index : 2.71%
This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.
They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.
ParticipantLIBOR Index Watch …
Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.
Current 1-year LIBOR index : 2.71%
This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.
They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.
ParticipantLIBOR Index Watch …
Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.
Current 1-year LIBOR index : 2.71%
This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.
They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.
ParticipantLIBOR Index Watch …
Rate resets for loans originated in the 2003 – 2006 time frame for Alt-A or prime loans were typically based on the 6-month or 1-year LIBOR index, with margins of typically 2.25%.
Current 1-year LIBOR index : 2.71%
This means that loans re-setting in the near future are likely to re-set at rates in the low 5% range. Some folks who took out 5-year ARMs in 2003 will have their loans reset lower than their original rate.
They may still be in tenuous condition as short-term rates could spike in the next couple of years. But one must consider what prevailing rates are re-setting, not just the fact that x billion dollars in loans will re-set and assume that all the buyers are screwed.
ParticipantIf you get out of the market now and stay out till we are out of the bear market we’ve entered, you are probably better off. You can always re-enter when the smoke clears. It will be pretty obvious, as banks will stop failing, interest rates will return to more historic norms and unemployment will be abating.
I disagree. In retrospect the times to buy have usually been at the points where there was the most smoke.
ParticipantIf you get out of the market now and stay out till we are out of the bear market we’ve entered, you are probably better off. You can always re-enter when the smoke clears. It will be pretty obvious, as banks will stop failing, interest rates will return to more historic norms and unemployment will be abating.
I disagree. In retrospect the times to buy have usually been at the points where there was the most smoke.
ParticipantIf you get out of the market now and stay out till we are out of the bear market we’ve entered, you are probably better off. You can always re-enter when the smoke clears. It will be pretty obvious, as banks will stop failing, interest rates will return to more historic norms and unemployment will be abating.
I disagree. In retrospect the times to buy have usually been at the points where there was the most smoke.
ParticipantIf you get out of the market now and stay out till we are out of the bear market we’ve entered, you are probably better off. You can always re-enter when the smoke clears. It will be pretty obvious, as banks will stop failing, interest rates will return to more historic norms and unemployment will be abating.
I disagree. In retrospect the times to buy have usually been at the points where there was the most smoke.
ParticipantIf you get out of the market now and stay out till we are out of the bear market we’ve entered, you are probably better off. You can always re-enter when the smoke clears. It will be pretty obvious, as banks will stop failing, interest rates will return to more historic norms and unemployment will be abating.
I disagree. In retrospect the times to buy have usually been at the points where there was the most smoke.
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