This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Credit Crunch Continues, Thornburg Exec Says

Thornburg Mortgage (TMA) operating chief Larry Goldstone applauds Tuesday's Fed rate cut but says his industry is still facing tough times ahead.

Federal Reserve Chairman Ben Bernanke cut the benchmark fed funds overnight lending interest rate by 50 basis points. The Fed said it feared that disruptions in the credit markets could seep into the economy.

Shares of financial companies rose sharply on the news, as investors breathed a sigh of relief. And Goldstone says he believes the Fed will continue to cut rates through year-end, to 4% from the recent 4.75%.

But Goldstone tells that even with rate relief, credit worries will persist -- and the housing and mortgage industries are far from out of the woods.

"The moves that [the Fed] made yesterday was absolutely the right move," Goldstone said in an interview Wednesday. "But at the end of the day, the market is still fairly dysfunctional."

He notes that companies are still having difficulties selling short-term commercial paper, a type of debt financing used by mortgage lenders to help fund loans. Scant few asset-backed and mortgage-backed securities have been structured and sold into the market in recent weeks.

"Mortgage spreads are as wide as they've been, so the Fed cut is not having an impact on mortgage rates per se," Goldstone notes.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.14 -1.60%
IMH $14.00 -2.10%
AAPL $94.30 -0.92%
FB $118.08 0.55%
GOOG $695.81 0.50%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.66 -11.71 -0.57%
NASDAQ 4,729.0210 -34.2030 -0.72%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs