Wall Street’s high about the Fed’s $200 billion intervention was replaced by more rational thinking in that some of the main concerns like weak housing and continued credit concerns had not been really resolved but still remain a serious problem to be dealt with. The markets retreated and received no support to the upside with oil prices topping $110/barrel. While …
Shifting Risk
Euphoria returned to Wall Street yesterday as the Fed, in what I consider a desperate move to curtail the financial meltdown, let banks borrow money from the Fed using questionable assets as collateral. The whole idea seems odd to me since banks were not able to liquidate their Subprime holdings in the open market place (no bidders) but now found …
Feeding The Bears
Al Thomas, author of “If it doesn’t go up, don’t buy it,” made these market observations titled “Humpty Dumpty Market” in his last weekly update: ….and all the King’s men could not put him back together again. Our king is supposed to be Fed Chairman Ben Bernanke. Did you have the opportunity to listen to his testimony before Congress this …
How High Can You Go?
Here’s an amazing statistic as reported in “B of A says merger on despite Countrywide woes:” Countrywide said last week that 90-day delinquency rates in its $28.42 billion adjustable rate mortgage portfolio climbed more than 900% from a year earlier, up to 5.4% from 0.6% during the same period last year. The lender also warned that 71% of its ARM …
Sunday Musings: A Friendly Game Of Texas Hold ‘Em
Thursday’s report by MarketWatch titled “Let’s see ‘em” reminded me of a poker game like Texas hold ‘em with the only difference that the eventual last guy bluffing will be not the winner but the big loser. This week, one player after another was forced to show their cards: Over in London, Carlyle Capital Corp., an arm of private-equity giant …
Need $1 Trillion
Here’s an interesting question: Why are interest rates on 30-year mortgages rising even as the Federal Reserve slashes interest rates and yields on Treasury Bonds fall? MarektWatch had this to say about the current mortgage crisis: The answer is that the mortgage market is short of roughly $1 trillion in capital, according to Paul Miller, an analyst at Friedman, Billings, …