No More Conundrum
Greenspan’s attempts to raise long-term interest rates by pushing short term rates higher finally seems to be working according to this article.
Snip…
“The pattern appears to be changing now. With the federal funds rate at 3.75%, and likely at 4.00% on Nov. 1, the yield on the 30-year is poised to trend above its 200-day SMA at 4.540. The close on Sept. 30 was also cheaper than its five-month modified moving average at 4.507, which shifted the monthly chart profile to negative, another sign that the bond conundrum is now over.
Another signal for higher yields would be if the 50-day SMA rises above the 200-day SMA, which, as the chart shows, could happen next week. The Fed's plan to remove monetary accommodation at a measured pace continues, despite the destruction of hurricanes Katrina and Rita. The Fed and most Wall Street economists say that the economic effects of the storms are temporary, but in my opinion, that's wishful thinking. I believe that the FOMC and Wall Street just don't understand Main Street, USA.
In my judgment, sagging income and higher energy prices will continue to depress consumer spending for months, if not quarters. The Conference Board and University of Michigan consumer sentiment readings plunged in September, and some economic statistics from before Katrina suggested that the economy was already slowing. For example, new-home sales fell 9.9% in August.”
more...
Snip…
“The pattern appears to be changing now. With the federal funds rate at 3.75%, and likely at 4.00% on Nov. 1, the yield on the 30-year is poised to trend above its 200-day SMA at 4.540. The close on Sept. 30 was also cheaper than its five-month modified moving average at 4.507, which shifted the monthly chart profile to negative, another sign that the bond conundrum is now over.
Another signal for higher yields would be if the 50-day SMA rises above the 200-day SMA, which, as the chart shows, could happen next week. The Fed's plan to remove monetary accommodation at a measured pace continues, despite the destruction of hurricanes Katrina and Rita. The Fed and most Wall Street economists say that the economic effects of the storms are temporary, but in my opinion, that's wishful thinking. I believe that the FOMC and Wall Street just don't understand Main Street, USA.
In my judgment, sagging income and higher energy prices will continue to depress consumer spending for months, if not quarters. The Conference Board and University of Michigan consumer sentiment readings plunged in September, and some economic statistics from before Katrina suggested that the economy was already slowing. For example, new-home sales fell 9.9% in August.”
more...
posted by Little_Silvered at 6:55 PM
2 Comments:
The conundrum is going to be an avalanche as about $600 billion of sub-prime mtg debt is going to readjust upwards within next 18 months.
Home prices are heading down already and they will really fall when the speculators , flippers and home wantabees finally go bust or are forced to liquidate.
Anyone that thinks housing can go up 50-100% in 3-5 years and can hold must be kidding themselves or in denial.
No free lunches out there. Easy money is gone for now so is the marginal idiot who is now out of the market.
I love your site.
I can help people who plan to move to San Diego save $5,000 to $25,000 on the purchase of their next home by negotiating with the seller. real estate for sale real estate for sale
Come and check my website out if you get time :-)
Post a Comment
<< Home