The 30-year fixed jumbo mortgage rate has fallen decisively below 7%. It was being quoted at 6.91% at the end of Wednesday -- 9 basis points in the bond world used to be decisive. We have been saying that this one rate is the simplest way to judge if liquidity is being freed and whether the velocity of money is starting to pick up. It's overly simplistic but accurate enough for a quick, simple check, and while this is early-stage and tentative, it is good news.
Look for three-month LIBOR to continue its fall. It was quoted at 1.58% on Wednesday morning's fixing, and I see 1% in the near future. I was told "60 Minutes" ran a critical segment on the problem of Alt-A mortgages (and God knows the idiots who dreamed this category up created a lot of problems) that will have interest rate resets in 2009 and 2010. While it could be a problem, I would want to know the initial teaser rate -- if they reset against all-time-low-yielding 10-year Treasuries at 2.1% or record-low LIBOR at 1.58%, some interest payments could go down!
P.S. Will you be there when Cramer makes his next move?
Strong brands and companies with vast market exposure can help bolster your portfolio. Jim was able to lock in a 64% gain by buying Ingersoll-Rand at $13 and selling at $22.50. Action Alerts PLUS members were the first to see these moves. Were you among them? Get Free Access Today!
Market Commentary Selling Pressure Abates 12/18/2008 5:05 AM EST Are markets poised for a new move upwards?
Market Commentary Low Interest Rates Are Not Enough 12/17/2008 11:39 AM EST We won't see housing revive until the job market stabilizes.
Vincent Farrell Jr. is chief investment officer for Soleil Securities Group and a regular guest on CNBC and other national print and broadcast media.
Prior to joining Soleil in August 2008, Farrell was a principal of Scotsman Capital Management. Before that, he was chairman of Victory Capital Management of Cleveland and chairman of Victory SBSF Capital Management in New York. He was a founding partner of Spears Benzak Salomon & Farrell, which was acquired by KeyCorp in 1995. Vince held a variety of positions in his 23 years at SBSF, including chief investment officer, and he served as the portfolio manager on a number of the firm's largest client relationships.
Prior to joining SBSF, Vince spent nine years at Smith Barney as a vice president, sales.
Vince graduated from Princeton University in 1969 and received his MBA from the Iona College Graduate School of Business in 1972.
RSS FEEDS
PODCASTS
