The Fed did the expected yesterday by lowering interest rates ¼%. For Wall Street, it turned out to be a disappointment since false hope of a ½% cut was not met. The reaction was fast and furious, and all major indexes retreated sharply with the Dow dropping some 300 points. It will be interesting to see if this pullback was …
The Ratings Game: All AAA Ratings Are Not The Same
The Washington Post featured an interesting article by Steve Perlstein called “It’s Not 1929, but It’s the Biggest Mess Since.” It’s another well written review of the Subprime/credit crises, which contained some nuggets of knowledge I was not aware of. It’s classic Wall Street and shows you how to squeeze more value out of an investment. It starts with mortgage-backed …
The Subprime Fraud Factor
Lax lending standards were one of the prime causes of the Subprime debacle. One of the terms you most likely have heard is that many real estate buyers qualified based on “stated income.” What that means is that you can write down your income based on what you need it to be to qualify and not what it actually is—without …
Sunday Musings: Green With Envy
The Southern California area I live in is a hotbed of overleveraged real estate, leased automobiles and high-end lifestyles that for many have been financed via the housing ATM over the last few years. Sure, there are truly wealthy people who can easily afford that $3 million dollar home, but the masses made the switch to the fast lane lifestyle …
An Insider View To The Subprime Debacle
Over the past few months, I have written my share of posts about the Subprime/credit/housing crisis and have cited many articles for clarification. All along, my goal was to find a posting from an insider who had actually worked in the industry and could add a better viewpoint to the discussion. I lucked out when I found Herb Greenberg’s MarketBlog, …
No Load Fund/ETF Tracker updated through 12/6/2007
My latest No Load Fund/ETF Tracker has been posted at:http://www.successful-investment.com/newsletter-archive.phpThe government sponsored Subprime “solution” and anticipation of a 0.5% Fed interest rate cut pushed the major indexes higher. Our Trend Tracking Index (TTI) for domestic funds/ETFs has moved to +5.90% above its long-term trend line (red) as the chart below shows: The international index climbed +0.86% above its own trend …