Subprime Lenders Up on Hope Fed's Done

If there is one pause, there is likely to be more. There's really not much point in stopping for one month. That's the sort of half-measure that the organization has tried to avoid. If so, the August hike may have been the last of Greenspan's tenure. In that context, a pause could be seen as a magnanimous gesture by a retiring hero to a grateful nation. (Or not.)

Meanwhile, back on Planet Wall Street, traders appear to be betting on the pause by pushing up shares most affected by higher rates. The subprime lenders, often reviled by the snobbish market intelligentsia, provide an important service to less-advantaged consumers who wish to buy a house and don't mind spending a little extra in interest and fees to do so. Aames, which pays a dividend of 10%, could easily move all the way back to $9 if this move gets going, while NovaStar could revisit $40 and Accredited would have a shot at $45 or better.

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For those who read my piece on BJs, I've updated the column with some additional information from Avalon Research.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider IberiaBank to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

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