From the AFP:
“The Federal Reserve cut US short-term interest rates Wednesday in a widely anticipated move, saying it had acted amid concerns economic growth will likely cool in coming months.”
From the Wall Street Journal:
“Not to burst anyone’s bubble this mini growth spurt apparent in the second- and third-quarter GDP data is built on a shaky foundation and is not built to last… In the aftermath of the release of the GDP data, financial talk TV is full of experts raving over the strength of the U.S. economy and ridiculing the notion of further interest rate cuts. As we dig through the details of today’s report, we find plenty of room to disagree with these assessments.”
From Bloomberg:
“’`I don't expect we're going to see GDP at all like this in the fourth quarter, but coming from where we've been in mid- 2007, it won't be bad,’ said Richard DeKaser, chief economist at National City Corp. in Cleveland, who forecast growth of 3.8 percent.”
From U.S. News and World Report:
“The only question [about the economy] has been how can we make it larger? The new questions are: How can we make it more durable? We understand the economy is pushing environmental limits.
Second: How can we make the economy produce satisfaction? The burst in economic growth has not coincided with an increase in satisfaction.”
The news and information that matters to real estate, small business and alternative investors.
Wednesday, October 31, 2007
Surprise Economic Growth Built to Last?
Will a Fed Rate Cut Affect Mortgage Rates?
From the Seattle Times:
“Wall Street has experienced many scares lately, from a global credit crunch to big mortgage-related losses for top banks, so it's fitting the Federal Reserve's latest decision on interest rates comes on Halloween.
Many investors hope for a treat, in the form of another rate cut, rather than a trick.
The hope is a lower target for the benchmark federal funds rate would prompt banks to cut rates on mortgages — a boon to homeowners with adjustable rates due to reset — as well as credit cards.”
From The Wall Street Journal:
“…mortgage rates actually follow the bond market, not the Fed-funds rate. The interest rate on a 30-year fixed-rate mortgage tracks the yield on the 10-year Treasury note… Lenders typically set their base mortgage rate around two percentage points higher than the 10-year bond yield.”
From the Associated Press:
"’The problems in the housing market, the problems in the credit markets are not easily solved by the Fed cutting rates,’ said Steve East, chief economist for investment bank Friedman Billings, Ramsey & Co. in Arlington, Va., who sees the Fed making three quarter-point cuts by January and puts the odds of a recession in 2008 at 60 percent.
The thinking is that lenders can improve battered balance sheets if they have to pay less for money they borrow short-term while the rate they charge borrowers for long-term loans holds steady or moves higher. Yet analysts say problems in the credit markets extend beyond the benefits of small rate cuts.”
From the New York Post:
“When the Fed attempted to rescue the housing industry in August by cutting its funds rate and reducing the discount rate for the second time in a month, the financial markets became spooked and punished mortgage seekers.
According to BankRate.com, the average rate on an adjustable rate mortgage went up from 6.53 percent right before the latest round of Fed rate cuts to 6.64 percent soon afterwards.”
“Wall Street has experienced many scares lately, from a global credit crunch to big mortgage-related losses for top banks, so it's fitting the Federal Reserve's latest decision on interest rates comes on Halloween.
Many investors hope for a treat, in the form of another rate cut, rather than a trick.
The hope is a lower target for the benchmark federal funds rate would prompt banks to cut rates on mortgages — a boon to homeowners with adjustable rates due to reset — as well as credit cards.”
From The Wall Street Journal:
“…mortgage rates actually follow the bond market, not the Fed-funds rate. The interest rate on a 30-year fixed-rate mortgage tracks the yield on the 10-year Treasury note… Lenders typically set their base mortgage rate around two percentage points higher than the 10-year bond yield.”
From the Associated Press:
"’The problems in the housing market, the problems in the credit markets are not easily solved by the Fed cutting rates,’ said Steve East, chief economist for investment bank Friedman Billings, Ramsey & Co. in Arlington, Va., who sees the Fed making three quarter-point cuts by January and puts the odds of a recession in 2008 at 60 percent.
The thinking is that lenders can improve battered balance sheets if they have to pay less for money they borrow short-term while the rate they charge borrowers for long-term loans holds steady or moves higher. Yet analysts say problems in the credit markets extend beyond the benefits of small rate cuts.”
From the New York Post:
“When the Fed attempted to rescue the housing industry in August by cutting its funds rate and reducing the discount rate for the second time in a month, the financial markets became spooked and punished mortgage seekers.
According to BankRate.com, the average rate on an adjustable rate mortgage went up from 6.53 percent right before the latest round of Fed rate cuts to 6.64 percent soon afterwards.”
Tuesday, October 30, 2007
Home Sellers Turn to Divine Intervention
From The Wall Street Journal:
“With the worst housing market in recent years, St. Joseph is enjoying a flurry of attention. Some vendors of religious supplies say St. Joseph statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses.”
From the Okeechobee News:
“A couple with a large waterfront home for sale have had it listed with a realtor for almost six months with absolutely no interest being shown in it. They have buried a St. Joseph statue in their yard, hoping to have divine intervention assist them.”
From Bankrate:
“Stephen J. Binz believes it works. The author of ‘St. Joseph, My Real Estate Agent,’ he became a believer when his own house had been on the market for seven long months. Upon the advice of his Presbyterian real estate agent, Binz buried a St. Joseph statue in his yard. ‘I thought it was a rather ridiculous superstition,’ says Binz, a practicing Catholic. But a week later, he had an offer and sold the house."
“With the worst housing market in recent years, St. Joseph is enjoying a flurry of attention. Some vendors of religious supplies say St. Joseph statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses.”
From the Okeechobee News:
“A couple with a large waterfront home for sale have had it listed with a realtor for almost six months with absolutely no interest being shown in it. They have buried a St. Joseph statue in their yard, hoping to have divine intervention assist them.”
From Bankrate:
“Stephen J. Binz believes it works. The author of ‘St. Joseph, My Real Estate Agent,’ he became a believer when his own house had been on the market for seven long months. Upon the advice of his Presbyterian real estate agent, Binz buried a St. Joseph statue in his yard. ‘I thought it was a rather ridiculous superstition,’ says Binz, a practicing Catholic. But a week later, he had an offer and sold the house."
Is it Time to Refinance?
From Realty Times:
“We used to have a rule of thumb that one should refinance only when rates drop at least 2 percent from your current mortgage. With the tremendous volatility of the financial marketplace, this 2 percent rule of thumb does not always makes sense.
More importantly, there are many other reasons to refinance other than lower mortgage payments. As of January of this year, credit card companies increased their minimum monthly payment from 2 to 4 percent of the outstanding balance. Mortgage interest is deductible while credit card charges are not. If, for example, you currently owe $5000 on your charge card, consider increasing your refinance mortgage by that amount and pay off the credit card debt.”
From the Navato Advance:
“Refinance now. Lock in a low rate. Save yourself from crippling mortgage debt. Ever since the Federal Reserve cut the federal funds rate mid-September, mortgage companies have been encouraging homeowners to heed these calls. Meanwhile, consumer advocates are warning against debtors falling prey to predatory lending schemes, and financial and real-estate professionals caution that many people in trouble may not qualify for new fixed-rate loans.”
From The Sydney Morning Herald:
“As interest rates rise, some borrowers are seeking to fix their loans while others are looking to refinance, in hot pursuit of lower rates. Saving even half a per cent on your mortgage repayments may help you sleep easier at night. However, if your home loan is reasonably small, it may take some time before the savings of a lower interest rate actually make up for the cost of refinancing…
…Before you jump from one loan to another, make sure you understand just how much it will cost to refinance. Depending on the terms and conditions of your current home loan contract, this may be an expensive exercise.”
From The Austin-American Statesman:
“Subprime guidelines have been rolled back about three years… You're going to have to save up your money, document your income, maybe wait a little bit. Understand that it's going to be OK for someone to look at your bank statement. Depending on the loan amount, consider an FHA loan. That's not subprime, but their credit guidelines are relaxed. Of course, that is also a full-doc loan.”
“We used to have a rule of thumb that one should refinance only when rates drop at least 2 percent from your current mortgage. With the tremendous volatility of the financial marketplace, this 2 percent rule of thumb does not always makes sense.
More importantly, there are many other reasons to refinance other than lower mortgage payments. As of January of this year, credit card companies increased their minimum monthly payment from 2 to 4 percent of the outstanding balance. Mortgage interest is deductible while credit card charges are not. If, for example, you currently owe $5000 on your charge card, consider increasing your refinance mortgage by that amount and pay off the credit card debt.”
From the Navato Advance:
“Refinance now. Lock in a low rate. Save yourself from crippling mortgage debt. Ever since the Federal Reserve cut the federal funds rate mid-September, mortgage companies have been encouraging homeowners to heed these calls. Meanwhile, consumer advocates are warning against debtors falling prey to predatory lending schemes, and financial and real-estate professionals caution that many people in trouble may not qualify for new fixed-rate loans.”
From The Sydney Morning Herald:
“As interest rates rise, some borrowers are seeking to fix their loans while others are looking to refinance, in hot pursuit of lower rates. Saving even half a per cent on your mortgage repayments may help you sleep easier at night. However, if your home loan is reasonably small, it may take some time before the savings of a lower interest rate actually make up for the cost of refinancing…
…Before you jump from one loan to another, make sure you understand just how much it will cost to refinance. Depending on the terms and conditions of your current home loan contract, this may be an expensive exercise.”
From The Austin-American Statesman:
“Subprime guidelines have been rolled back about three years… You're going to have to save up your money, document your income, maybe wait a little bit. Understand that it's going to be OK for someone to look at your bank statement. Depending on the loan amount, consider an FHA loan. That's not subprime, but their credit guidelines are relaxed. Of course, that is also a full-doc loan.”
Sub Prime Affecting Mexican Real Estate?
From the Latin Business Chronicle:
“… Mexico is not directly tied to the sub prime crisis because the mortgages in Mexico were underwritten with a tougher standard than in the U.S. But…it will cut capital worldwide.
From CNN Money:
“U.S. real estate investors are staking claims in Latin American countries where growth has returned after years of economic struggle. Property yields have hit 9% to 15% a year there, compared with roughly 5% to 8% in the U.S…
… In Brazil and Mexico, disposable income is rising and pent-up demand is lifting real estate returns.”
From Reuters:
“Bank of Mexico Governor Guillermo Ortiz said on Friday that a crisis in the U.S. subprime mortgage market has had little effect on emerging markets.
In contrast to previous financial crises that spread rapidly to emerging markets, ‘the crisis in subprime has barely touched emerging markets,’ he told a Federal Reserve Bank of Dallas conference.”
“… Mexico is not directly tied to the sub prime crisis because the mortgages in Mexico were underwritten with a tougher standard than in the U.S. But…it will cut capital worldwide.
From CNN Money:
“U.S. real estate investors are staking claims in Latin American countries where growth has returned after years of economic struggle. Property yields have hit 9% to 15% a year there, compared with roughly 5% to 8% in the U.S…
… In Brazil and Mexico, disposable income is rising and pent-up demand is lifting real estate returns.”
From Reuters:
“Bank of Mexico Governor Guillermo Ortiz said on Friday that a crisis in the U.S. subprime mortgage market has had little effect on emerging markets.
In contrast to previous financial crises that spread rapidly to emerging markets, ‘the crisis in subprime has barely touched emerging markets,’ he told a Federal Reserve Bank of Dallas conference.”
Monday, October 29, 2007
The Value of Water
From The New Zealand Herald:
“Few [People] have any idea what a valuable commodity water is. We luxuriate under the shower, drink our fill out of the tap and buy our consumer goods without a worry in the world.
But start reading about the world's use of water and the soundbites of information you'll find are enough to keep you up at night.”
From USA Today:
“Water has been a good investment in the past, says Joe O'Brien, president of WaterColorado.com. An acre-foot of water from the Colorado Big Thompson project cost about a dollar in the 1950s, O'Brien says. It's worth about $10,000 today. (An acre-foot is one acre of water, 12 inches deep, or 325,851 gallons.) ‘Water runs uphill to money,’ he says.
You can't just speculate in water rights: It's illegal in Colorado, says O'Brien. You could, however, buy real estate with water on the property, if you really wanted to cash in on Western water.
Robert Doll, chief investment officer for BlackRock, a New York investment manager, also thinks water is a good long-term investment. ‘It's a precious and rare resource,’ he says.”
From Money Week:
“Since 1950, the world’s population has doubled but the amount of fresh water available hasn’t actually budged at all. The result? According to the International Water Management Institute (IWMI), one-third of the world’s population is short of water. What’s worse, this is a point that the planet was not expected to reach, according to previous reports, until 2025, implying that the situation is deteriorating – fast.”
“Few [People] have any idea what a valuable commodity water is. We luxuriate under the shower, drink our fill out of the tap and buy our consumer goods without a worry in the world.
But start reading about the world's use of water and the soundbites of information you'll find are enough to keep you up at night.”
From USA Today:
“Water has been a good investment in the past, says Joe O'Brien, president of WaterColorado.com. An acre-foot of water from the Colorado Big Thompson project cost about a dollar in the 1950s, O'Brien says. It's worth about $10,000 today. (An acre-foot is one acre of water, 12 inches deep, or 325,851 gallons.) ‘Water runs uphill to money,’ he says.
You can't just speculate in water rights: It's illegal in Colorado, says O'Brien. You could, however, buy real estate with water on the property, if you really wanted to cash in on Western water.
Robert Doll, chief investment officer for BlackRock, a New York investment manager, also thinks water is a good long-term investment. ‘It's a precious and rare resource,’ he says.”
From Money Week:
“Since 1950, the world’s population has doubled but the amount of fresh water available hasn’t actually budged at all. The result? According to the International Water Management Institute (IWMI), one-third of the world’s population is short of water. What’s worse, this is a point that the planet was not expected to reach, according to previous reports, until 2025, implying that the situation is deteriorating – fast.”
Homeownership Rates Decline Further
From Bloomberg:
“The proportion of households that own their residences fell to 68.1 percent in the July-September period from 68.3 percent in the prior three months, according to a report today from the Census Bureau in Washington, whose comparable records go back to 1981. The rate has been declining from a peak in 2004, which culminated a decade of gains fueled by easier lending standards and rising home purchases by immigrants and younger households.”
From MarketWatch:
“While more homes were built in the past year, fewer American households were living in their own home at the end of the third quarter than did a year before. The number of homes occupied by their owner fell by a half million in the past year to 75.2 million.
As a result, the homeownership rate fell to a four-year low of 68.1% in the third quarter, the government said. The homeownership rate measures the percentage of occupied housing units that are occupied by owners; it peaked at 69.2% in the first quarter of 2006.”
From Business Week:
“Many analysts have fingered easy lending as a contributor to the housing boom, but the Atlanta Fed paper may be the first to quantify its effect in a rigorous way. Using math-heavy econometric analysis, the authors conclude that the availability of new kinds of mortgages, mainly ones with low down payments, accounted for 56% to 70% of the decade-long increase in the U.S. homeownership rate, while demographic changes accounted for only 16% to 31% of the effect.”
“The proportion of households that own their residences fell to 68.1 percent in the July-September period from 68.3 percent in the prior three months, according to a report today from the Census Bureau in Washington, whose comparable records go back to 1981. The rate has been declining from a peak in 2004, which culminated a decade of gains fueled by easier lending standards and rising home purchases by immigrants and younger households.”
From MarketWatch:
“While more homes were built in the past year, fewer American households were living in their own home at the end of the third quarter than did a year before. The number of homes occupied by their owner fell by a half million in the past year to 75.2 million.
As a result, the homeownership rate fell to a four-year low of 68.1% in the third quarter, the government said. The homeownership rate measures the percentage of occupied housing units that are occupied by owners; it peaked at 69.2% in the first quarter of 2006.”
From Business Week:
“Many analysts have fingered easy lending as a contributor to the housing boom, but the Atlanta Fed paper may be the first to quantify its effect in a rigorous way. Using math-heavy econometric analysis, the authors conclude that the availability of new kinds of mortgages, mainly ones with low down payments, accounted for 56% to 70% of the decade-long increase in the U.S. homeownership rate, while demographic changes accounted for only 16% to 31% of the effect.”
America's Secret Export: Bubbles
From Reuters:
"The bursting of U.S. housing and mortgage market bubbles has suddenly been replaced by emerging markets inflating…
… Suttle said the Fed ease replayed a now almost routine response to western banking stress and looked set to perpetuate a cycle of market bubbles that moved from Asia in the mid-1990s to technology at the end of the decade and housing post-2001…
…The fear is that when money starts to leak from developed to developing markets it supercharges already-elevated assets and stokes inflationary and systemic problems down the road.”
From The Observer:
“In its Financial Stability Review, the Bank of England has conducted a masterly dissection of the shockwaves that have rippled out from the American sub-prime mortgage market. It has also laid bare the risks: commercial property is in jeopardy, as are share prices, the US dollar and heavily indebted individuals.”
From Forbes:
“Like all manias of this kind, the Great China Stock Bubble is rooted in economic realities--the rise of China as a great economic power…
…But like all bubbles, this one comes with a large dose of artificiality and imbalances.
First, as an export-driven economy, much of China's growth is based on an artificially depressed currency. The Chinese government has kept a firm grip on the Renminbi, so that it's appreciated a mere 9% against the U.S. dollar over the last two years--while the Euro has risen about twice as much against the greenback.
Second, to keep the growth machine humming, the government has kept a lid on interest rates…”
"The bursting of U.S. housing and mortgage market bubbles has suddenly been replaced by emerging markets inflating…
… Suttle said the Fed ease replayed a now almost routine response to western banking stress and looked set to perpetuate a cycle of market bubbles that moved from Asia in the mid-1990s to technology at the end of the decade and housing post-2001…
…The fear is that when money starts to leak from developed to developing markets it supercharges already-elevated assets and stokes inflationary and systemic problems down the road.”
From The Observer:
“In its Financial Stability Review, the Bank of England has conducted a masterly dissection of the shockwaves that have rippled out from the American sub-prime mortgage market. It has also laid bare the risks: commercial property is in jeopardy, as are share prices, the US dollar and heavily indebted individuals.”
From Forbes:
“Like all manias of this kind, the Great China Stock Bubble is rooted in economic realities--the rise of China as a great economic power…
…But like all bubbles, this one comes with a large dose of artificiality and imbalances.
First, as an export-driven economy, much of China's growth is based on an artificially depressed currency. The Chinese government has kept a firm grip on the Renminbi, so that it's appreciated a mere 9% against the U.S. dollar over the last two years--while the Euro has risen about twice as much against the greenback.
Second, to keep the growth machine humming, the government has kept a lid on interest rates…”
America For Sale: Canadians Welcome
From ABC News:
“As the value of the dollar plummets, American real estate looks more and more attractive to overseas investors.
Foreigners buying property -- both residential and commercial -- in the United States is nothing new. But in recent months, as the exchange rate has swung further in their favor, Irish, British, Italian and even Canadian investors have started to gobble up more land here.”
From The Canadian Press:
“But there's another trend Jurock is seeing -- Canadians bargain-hunting in the depressed U.S. real estate market.
The strong loonie's buying power is magnified south of the border where the sub-prime mortgage debacle, with its flood of foreclosures, has pushed down prices.
‘I would say I get 10 e-mails a day from Canadians who want to go to Hawaii or Phoenix or all those areas and they're asking me what the laws are, how to get financing, and so on,’ he says.”
From Realty Times:
“As winter looms, dreams of owning a piece of sunshine have become affordable realities for many. Is it the southern US states that attract you, or would you prefer Mexico and other foreign lands where inflated ‘loonie’-exchange rates make Canadians feel richer away from home. Slower foreign real estate markets add to the value offering promoted to attract ‘loonie’ buyers. US brokers, intent on finding qualified purchasers in their saturated markets, are among those actively inviting Canadian buyers to consider buying a foreign property.”
From The National Review of Medicine:
“Today's strong loonie has clout in the US housing market, a market where the burst housing bubble is causing a serious credit crunch. Following years of frenzied buying and skyrocketing prices, defaults on mortgages are now endemic and the big sell-off has begun.
‘With the dollar as it is and the varied situation in the United States, there are tremendous buying opportunities in the southern states and particularly in the states that were grossly overheated,’ says Mr Maranger.”
“As the value of the dollar plummets, American real estate looks more and more attractive to overseas investors.
Foreigners buying property -- both residential and commercial -- in the United States is nothing new. But in recent months, as the exchange rate has swung further in their favor, Irish, British, Italian and even Canadian investors have started to gobble up more land here.”
From The Canadian Press:
“But there's another trend Jurock is seeing -- Canadians bargain-hunting in the depressed U.S. real estate market.
The strong loonie's buying power is magnified south of the border where the sub-prime mortgage debacle, with its flood of foreclosures, has pushed down prices.
‘I would say I get 10 e-mails a day from Canadians who want to go to Hawaii or Phoenix or all those areas and they're asking me what the laws are, how to get financing, and so on,’ he says.”
From Realty Times:
“As winter looms, dreams of owning a piece of sunshine have become affordable realities for many. Is it the southern US states that attract you, or would you prefer Mexico and other foreign lands where inflated ‘loonie’-exchange rates make Canadians feel richer away from home. Slower foreign real estate markets add to the value offering promoted to attract ‘loonie’ buyers. US brokers, intent on finding qualified purchasers in their saturated markets, are among those actively inviting Canadian buyers to consider buying a foreign property.”
From The National Review of Medicine:
“Today's strong loonie has clout in the US housing market, a market where the burst housing bubble is causing a serious credit crunch. Following years of frenzied buying and skyrocketing prices, defaults on mortgages are now endemic and the big sell-off has begun.
‘With the dollar as it is and the varied situation in the United States, there are tremendous buying opportunities in the southern states and particularly in the states that were grossly overheated,’ says Mr Maranger.”
Friday, October 26, 2007
Dollar Woes Continue
From the Associated Press:
"The dollar skidded to fresh record lows on speculation that U.S. will cut interest rates again as the post G-7 dollar sell-off came into full swing.
The greenback fell to a record low against the euro Friday at $1.4393, according to Interbank foreign-exchange rates from Dow Jones almost half a cent below its last record low of $1.4348, set Monday."
From the Inquirer.net:
"MANILA, Philippines -- The peso edged up Friday to a fresh seven-year high against the US dollar..."
From Reuters:
"The Canadian dollar strengthened to a fresh 33-year high against the ailing U.S. dollar on Friday, lifted by soaring commodity prices against the backdrop of a broad slide in the greenback."
From the International Business Times:
"BEIJING - Impacted by the continuous declining US dollar, the central parity rate of China's currency Yuan broke 7.5 for the first time..."
From Bloomberg:
"The Singapore dollar rose to a 10- year high against the U.S. dollar..."
From The West Australian:
"The Australian dollar finished above 91 US cents today for the first time in 23 years as expectations of a November rate rise mounted and the US currency weakened."
"The dollar skidded to fresh record lows on speculation that U.S. will cut interest rates again as the post G-7 dollar sell-off came into full swing.
The greenback fell to a record low against the euro Friday at $1.4393, according to Interbank foreign-exchange rates from Dow Jones almost half a cent below its last record low of $1.4348, set Monday."
From the Inquirer.net:
"MANILA, Philippines -- The peso edged up Friday to a fresh seven-year high against the US dollar..."
From Reuters:
"The Canadian dollar strengthened to a fresh 33-year high against the ailing U.S. dollar on Friday, lifted by soaring commodity prices against the backdrop of a broad slide in the greenback."
From the International Business Times:
"BEIJING - Impacted by the continuous declining US dollar, the central parity rate of China's currency Yuan broke 7.5 for the first time..."
From Bloomberg:
"The Singapore dollar rose to a 10- year high against the U.S. dollar..."
From The West Australian:
"The Australian dollar finished above 91 US cents today for the first time in 23 years as expectations of a November rate rise mounted and the US currency weakened."
Money Market Funds May be at Risk
From The Wall Street Journal:
“Complex investments known as SIVs are roiling Wall Street and the world of high finance. But the investment vehicles also are threatening trouble in a seemingly unlikely place: money-market funds, the choice for many individual investors seeking safety.”
From Fortune:
“Money market funds are often the safest investments offered by fund companies, but several large money market funds own securities that were issued by structured investment vehicles (SIVs), the large, offshore funds that have recently made it into the headlines because the U.S. Treasury, along with Citigroup (Charts, Fortune 500), Bank of America (Charts, Fortune 500) and JP Morgan Chase (Charts, Fortune 500), are working on a plan to shore up them up."
"Money market funds are supposed to the safest fund investments of all. They're not supposed to get involved in liquidations. That sort of event is a nightmare for a money market fund."
From the San Francisco Chronicle:
“Despite all the problems in the financial sector, most experts say that as long as you keep your deposits at any one institution under the insurance limit, you shouldn't lose any sleep…
…The basic insurance limit is $100,000 per customer per type of deposit, although there are ways to get additional insurance by opening different types of accounts - such as retirement, joint and trust accounts.”
“Complex investments known as SIVs are roiling Wall Street and the world of high finance. But the investment vehicles also are threatening trouble in a seemingly unlikely place: money-market funds, the choice for many individual investors seeking safety.”
From Fortune:
“Money market funds are often the safest investments offered by fund companies, but several large money market funds own securities that were issued by structured investment vehicles (SIVs), the large, offshore funds that have recently made it into the headlines because the U.S. Treasury, along with Citigroup (Charts, Fortune 500), Bank of America (Charts, Fortune 500) and JP Morgan Chase (Charts, Fortune 500), are working on a plan to shore up them up."
"Money market funds are supposed to the safest fund investments of all. They're not supposed to get involved in liquidations. That sort of event is a nightmare for a money market fund."
From the San Francisco Chronicle:
“Despite all the problems in the financial sector, most experts say that as long as you keep your deposits at any one institution under the insurance limit, you shouldn't lose any sleep…
…The basic insurance limit is $100,000 per customer per type of deposit, although there are ways to get additional insurance by opening different types of accounts - such as retirement, joint and trust accounts.”
New Home Builders Getting Desperate
From the Real Estate Journal:
“Lennar Corp. placed a two-page advertisement in Florida's Orlando Sentinel earlier this month, announcing it would be giving away a home in the Orlando area next month to one home buyer who visits its sales community and enters the drawing.”
From the Real Estate Journal:
“Some builders, such as Centex Corp., had been offering 12-hour sales at some of its sales centers in California, where buyers would be offered as much as $100,000 off the price of a multimillion-dollar home if they purchase a home during the sale hours.”
From Today’s 6 news:
“People lined up early and made deals over the phone. People who had put off buying a new home, waiting for a better deal, think they may have found it. They were drawn to buy a house built by CBH Homes Friday through the builder's 'Deal of a Lifetime' ad campaign. CBH discounted it's homes by as much as 70-thousand dollars, on 200 houses in Ada and Canyon Counties.”
From the New York Times:
“Hovnanian Enterprises Inc., struggling like other home builders, is offering six-figure discounts on some of its properties this weekend as it tries to draw interest in a slumping market.”
“Lennar Corp. placed a two-page advertisement in Florida's Orlando Sentinel earlier this month, announcing it would be giving away a home in the Orlando area next month to one home buyer who visits its sales community and enters the drawing.”
From the Real Estate Journal:
“Some builders, such as Centex Corp., had been offering 12-hour sales at some of its sales centers in California, where buyers would be offered as much as $100,000 off the price of a multimillion-dollar home if they purchase a home during the sale hours.”
From Today’s 6 news:
“People lined up early and made deals over the phone. People who had put off buying a new home, waiting for a better deal, think they may have found it. They were drawn to buy a house built by CBH Homes Friday through the builder's 'Deal of a Lifetime' ad campaign. CBH discounted it's homes by as much as 70-thousand dollars, on 200 houses in Ada and Canyon Counties.”
From the New York Times:
“Hovnanian Enterprises Inc., struggling like other home builders, is offering six-figure discounts on some of its properties this weekend as it tries to draw interest in a slumping market.”
Is the Credit Crisis Over?
From Agora Financial:
"In other words, Citi and Treasury seem eager to replicate – or at least to mimic – the precise Enron-style accounting abuses that FASB’s FIN 46 (R)seeks to prevent. Why, we wonder, is the nation’s Treasury Secretary conspiring with the nation’s largest banks to skirt post-Enron accounting standards? Probably because the credit crisis is much larger and much more serious than any financial or political leader wishes to admit."
From The New York Times:
“’The financial turmoil of the last months is not yet behind us,’ the European commissioner of economic and monetary affairs, Joaquín Almunia, said at a conference of bond dealers in Brussels. ‘Downside risks to the growth outlook have now obviously increased due to the events in the financial markets,’ he added. ‘It is apparent that economic outlook will be somewhat less favorable than we expected.’”
From Marketwatch:
"Over the last two months, some markets have recovered, but problem areas remain, particularly in the London market for structured investment vehicles, or SIVs. There is concern in financial markets about bank exposure to these investment pools and concern that possible forced sales of their assets might shock already jittery credit markets."
From The New York Sun:
"’Don't fight the Fed’ has long been a profitable strategy for stock market speculators. Following this maxim on August 17, 2007, a week after the Federal Reserve injected a massive dose of liquidity to contain the subprime mortgage problem, would have produced a tidy profit. The Dow-Jones Industrial Average has risen by about 5% since then. But those who think this Wall Street aphorism also signals the end of the crisis that began last summer would do well to revisit the history of the Great Crash. The Federal Reserve will provide only a temporary reprieve if mortgage credits are fundamentally unsound.”
"In other words, Citi and Treasury seem eager to replicate – or at least to mimic – the precise Enron-style accounting abuses that FASB’s FIN 46 (R)seeks to prevent. Why, we wonder, is the nation’s Treasury Secretary conspiring with the nation’s largest banks to skirt post-Enron accounting standards? Probably because the credit crisis is much larger and much more serious than any financial or political leader wishes to admit."
From The New York Times:
“’The financial turmoil of the last months is not yet behind us,’ the European commissioner of economic and monetary affairs, Joaquín Almunia, said at a conference of bond dealers in Brussels. ‘Downside risks to the growth outlook have now obviously increased due to the events in the financial markets,’ he added. ‘It is apparent that economic outlook will be somewhat less favorable than we expected.’”
From Marketwatch:
"Over the last two months, some markets have recovered, but problem areas remain, particularly in the London market for structured investment vehicles, or SIVs. There is concern in financial markets about bank exposure to these investment pools and concern that possible forced sales of their assets might shock already jittery credit markets."
From The New York Sun:
"’Don't fight the Fed’ has long been a profitable strategy for stock market speculators. Following this maxim on August 17, 2007, a week after the Federal Reserve injected a massive dose of liquidity to contain the subprime mortgage problem, would have produced a tidy profit. The Dow-Jones Industrial Average has risen by about 5% since then. But those who think this Wall Street aphorism also signals the end of the crisis that began last summer would do well to revisit the history of the Great Crash. The Federal Reserve will provide only a temporary reprieve if mortgage credits are fundamentally unsound.”
Thursday, October 25, 2007
Will Gold Continue to Rise?
From Moneyweek:
“Much of the enthusiasm for gold obviously relates to the weak dollar but we think it’s clearly more than that, it also relates to an abiding concern about the well being of global economies.”
From an editorial in the Asia Times:
“…the more idiotic and corrupt the central banks and governments act, the higher the prices of gold, silver and oil will go. And since there is no limit to the idiocy and corruption of government, there is no limit to how high gold, silver and oil will go. It's just that simple.”
From Bloomberg:
“Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency… Platinum, gold, silver and palladium will ‘be much, much higher during the course of the bull market’ he said.”
“Much of the enthusiasm for gold obviously relates to the weak dollar but we think it’s clearly more than that, it also relates to an abiding concern about the well being of global economies.”
From an editorial in the Asia Times:
“…the more idiotic and corrupt the central banks and governments act, the higher the prices of gold, silver and oil will go. And since there is no limit to the idiocy and corruption of government, there is no limit to how high gold, silver and oil will go. It's just that simple.”
From Bloomberg:
“Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency… Platinum, gold, silver and palladium will ‘be much, much higher during the course of the bull market’ he said.”
Wednesday, October 24, 2007
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We separate the wheat from the chaff and highlight some of the best, most distinctive and at times controversial commentary and coverage on topics investors care about. And while NuWire Investor focuses on alternative investments, InvestorCentric also covers what is happening in the global and local economies that directly affects investors.
NuWire prides itself on its high standards and quality content. InvestorCentric does the same. We scour a variety of sources and provide quotes from and links to the most thought-provoking stories we find.
Feel free to leave your comments on any blog posting. If you would like to contact us directly, we can be reached at investorcentric@nuwireinvestor.com.