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Old 09-18-2007, 06:55 PM #1
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whos happy today.....

Whats everyones take on the fed's move.....I just took a few laps around the house w00t w00t
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Old 09-18-2007, 07:19 PM #2
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Doesn't really directly affect me, but I was VERY suprised at the 50 point drop rather than 25 points, especially from a generally conservative Bernanke. This will certainly give the economy a nice jump-start kick in the ***.
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Old 09-18-2007, 07:46 PM #3
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I dont like the government interfering with the market. Shows that there is a problem. This is just post-poning the recession/correction.
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Old 09-18-2007, 07:51 PM #4
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This is just post-poning the recession/correction.
Agreed

Since mortgage rates are not even tied to the Fed Funds rate I really don't see it helping to much long term. Near term it should loosen up some credit. A recession is not about how the stock market is doing, it is about how much money people are spending. Did this cut put more money in your pocket? Certainly not mine. It's just trying to ease inflation, but it won't really change the amount of discretionary income people have.

Also have fun if you are leaving the country, the dollar should continue to decline because of this rate cut.
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Old 09-18-2007, 08:51 PM #5
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Agreed

Certainly not mine. It's just trying to ease inflation,
False statement. The cut is meant to increase spending, not ease inflation. Those two are quite opposite. If we were heading toward inflation, they would not cut, but rather increase basis points.
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Old 09-18-2007, 08:58 PM #6
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I don't get happy or mad, I just become "interested". I'm in for the long haul of 10+ years.
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Old 09-18-2007, 09:04 PM #7
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"Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully. "

http://www.federalreserve.gov/newsev.../20070918a.htm

If you read the statement the reasons they are lowering rates are yes, to increase spending but mainly to avoid a credit crunch.
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Old 09-18-2007, 09:31 PM #8
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Originally Posted by pballer34 View Post
Doesn't really directly affect me, but I was VERY suprised at the 50 point drop rather than 25 points, especially from a generally conservative Bernanke. This will certainly give the economy a nice jump-start kick in the <del>***</del>.
I was very surprised. I never expected such a move from Bernanke. I thought for sure it was a quarter point today and possibly more cuts further down the road, if needed.
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Old 09-19-2007, 05:29 PM #9
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Makes my job a lot easier....that is for sure.
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Old 09-19-2007, 05:31 PM #10
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Makes my job a lot easier....that is for sure.
For writing loans?
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Old 09-19-2007, 06:46 PM #11
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Nope, I don't do any lending.

Customers have been worried to invest because of the credit burst and the shaky economy (expecially in Michigan) right now. Most don't care what the fed does, as long as they do something and people can see what direction they're heading in. You have to remember that most of these people invest with way too much emotion and don't realize that no matter what happens markets always rebound.

As a nice side effect, CD rates are going down which makes my fixed income options look much better.

A customer yesterday liquidated his IRA (about 350k in it) and bought a CD ladder. Stupid move for sure, but some people just don't get it. He didn't like "what the market is doing" and thinks he's better off tying it up in some BS savings account that earns crap for interest. Most of it was a 10 year term! You just can't save some people from themselves...

On the lending side, it will take a bit of time before we see the fed's cut affect our retail lending rates. It will happen, just not real quick.

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Old 09-19-2007, 08:07 PM #12
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Nope, I don't do any lending.

Customers have been worried to invest because of the credit burst and the shaky economy (expecially in Michigan) right now. Most don't care what the fed does, as long as they do something and people can see what direction they're heading in. You have to remember that most of these people invest with way too much emotion and don't realize that no matter what happens markets always rebound.

As a nice side effect, CD rates are going down which makes my fixed income options look much better.

A customer yesterday liquidated his IRA (about 350k in it) and bought a CD ladder. Stupid move for sure, but some people just don't get it. He didn't like "what the market is doing" and thinks he's better off tying it up in some BS savings account that earns crap for interest. Most of it was a 10 year term! You just can't save some people from themselves...

On the lending side, it will take a bit of time before we see the fed's cut affect our retail lending rates. It will happen, just not real quick.

Ah. That was my understanding regarding lending. That these cuts won't really affect mortgage rates. Rather the loosening of the credit market for institutions and businesses.

That's interesting that people would do that with their IRA. The penalty must have been huge.
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Old 09-19-2007, 11:36 PM #13
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Honestly I don't get it. Why do people think CDs and savings account with rates better than 1% will compete with mutal funds/stocks/IRAs.

Stocks etc have always outperformed Real estate and other investments over the long term.
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Old 09-20-2007, 12:15 PM #14
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That's interesting that people would do that with their IRA. The penalty must have been huge.
He still held the CD's within his IRA, he just moved the money from his security holdings into a CD.

No tax implications, just moving the $$ to a different account.
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Old 09-20-2007, 11:47 PM #15
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Ah. That was my understanding regarding lending. That these cuts won't really affect mortgage rates. Rather the loosening of the credit market for institutions and businesses.

That's interesting that people would do that with their IRA. The penalty must have been huge.
About 99% of Mortgages are tied to the LIBOR, I think that is actually close to its 3 yr high which it hit a few weeks ago. Bad news bears for resets.

Basically this affects big banks like mine who need money to cover their overnight liabilities, in turn lowering the value of those liabilities.

In bigger news, Canada is about even with us as far as currency goes. So no more weekends binges in Montreal'...
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Old 09-21-2007, 12:42 AM #16
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About 99% of Mortgages are tied to the LIBOR, I think that is actually close to its 3 yr high which it hit a few weeks ago. Bad news bears for resets.
Holy smokes. I had no idea that so many lender used the LIBOR as a benchmark for their mortgages. Bad news indeed.

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In bigger news, Canada is about even with us as far as currency goes. So no more weekends binges in Montreal'...
Indeed. We just went to Toronto a few weeks ago as their's is the closest Ikea. Paying on par and GST wasn't bad enough. My CC socked me with a exchange transfer fee on top.
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Old 09-21-2007, 01:04 PM #17
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About 99% of Mortgages are tied to the LIBOR, I think that is actually close to its 3 yr high which it hit a few weeks ago. Bad news bears for resets.

Basically this affects big banks like mine who need money to cover their overnight liabilities, in turn lowering the value of those liabilities.

In bigger news, Canada is about even with us as far as currency goes. So no more weekends binges in Montreal'...
I thought it was about 50% of the ARMS that were tied to the Libor.

This cut will put money into peoples pockets. For those with an arm, not tied to the Libor, that was up for adjustment benefits from this.
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Old 09-22-2007, 03:58 PM #18
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You might be right, I heard 99% the other day on CNBC but I really can't back that up with fact.
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