interest rates

Ditech is Wrong…People are Stupid

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Our government wastes a lot of time on the soap box about issues that really have nothing to do with solving the problem. They spend very little time solving the real problem. Housing prices are a symptom, not the problem. Executive pay was a symptom, not the problem. Madoff was a symptom, not the problem. … Read more Ditech is Wrong…People are Stupid

Greenspan’s Flaw in Free Market Model

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Greenspan WAS the flaw in his free market model…because he altered free markets by lowering rates to boost the economy after the stock bubble burst. Plain and simple. Had free markets been allowed to correct after the bubble burst, we would have unwound the excess risk and leverage much sooner and with much less pain. … Read more Greenspan’s Flaw in Free Market Model

FED: Finance & Economics Disability or FOMC: First to Originate Make-believe Crisis

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The FOMC should have left interest rates alone as the housing bubble started to burst, and let home prices fall back to historic trend-lines. Granted there may have been defaults, but they were necessary. These people didn’t deserve to be in these homes in the first place, they bought overpriced assets with no equity up … Read more FED: Finance & Economics Disability or FOMC: First to Originate Make-believe Crisis

Banks now bidding to buy other banks to gain their deposits

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Banks bidding for deposits to gain liquidity is just one more blatant sign from the markets that the FED needs to let interest rates go up to provide liquidity. Without the higher interest rates for bank deposits, people are just shifting funds into a treasury bubble. Its no wonder the treasury needs to provide funds … Read more Banks now bidding to buy other banks to gain their deposits

Case for USD Bull Market

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The de-leverage in the market to adjust back to normal risk levels is decreasing the money supply substantially, they are trying to inject huge sums of USD into the market to offset that. All in all, the functional money supply is actually down substantially. Also, a very large portion of the USD money supply is … Read more Case for USD Bull Market

Bank Liquidity

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How many more signs in the open market do people need to see to realize equilibrium interest rates need to rise to free up the markets? Right now, the low rates are just shifting the excess risk leverage into treasuries creating a pricing bubble there, driving the yields down, and escalating the spread between rates. … Read more Bank Liquidity

Response to Mrs. Kelly’s housing analysis on CNBC

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What Mrs. Kelly doesn’t see, is that the traditional 20% down payment to secure a loan for an underlying asset that is still likely to drop 10-20% going forward, is not the same security as 20% down in a normal market. Banks would need 30-40% down to not be insane to lend money in this … Read more Response to Mrs. Kelly’s housing analysis on CNBC