If Fed does cut INT (a) 50 reason pt..?
would that be the bottom of financials according to Cramer?Answers: The bottom will come from a varity of factors. The feds requests to cut aggressively 50 bp and maybe another 25 bpt after that, the financials stipulation to writte off over aggressively their shaky investments (too aggressively so that their 2008 returns will look good), you probably will need to see some consolidations (i.e BofA and Countrywide), you also have need of to see some dividends cut, and see additional feds pumping money via auction into the souk.
We start seeing some of these, so I think the bottom is hard by, not yet tho, but to hand. This of course does not tight-fisted that recovery will be briskly as I believe it will be one of these long bottoms where financials will be out of favor for some times. 2008 will probably be a year long bottom for financials.
I would speak no to that.
Bernanke's speech made it clear that the Fed will be easing. The economy wants the stimulus and the key examine is whether the Fed waits until Jan. 30 or cuts ahead of time and how much. We'll find out soon enough.
As the dollar go's down gold ingots will go up.
No, Cramer won't be relieved until the fed rates stir down to zero.
Where is the logic contained by sub prime mortgage products?
If these people ar glorious risk at 5% interest what qualifies them for matching money at a higher rate .surely this is fraud.Answers: The increased rate is to protect the lender from the expectation of greater default by these high risk customers. However, I construe your point, because the whole entry got so out of mitt, that they seemed to give the brush-off risk altogether when agreeing these loans. May I add the following points of explanation :-
Employees in the Mortgage Banks who are charged with selling these products be trying to maximise their bonuses by lending as much money as they could. That made them lots of money, and the Banks recital pleased the 'City', that is, until the proverbial hit the enthusiast, and then it be the shareholders/depositors who suffered. Basically, Banks were competing beside other Banks, and prudence came second to sale. It was other going to end approaching this, and they all investigational it. Now, they are screaming to lower interest rates, so they can continue near their irresponsibility.
In Britain, Brown et al, has prompted a housing boom and a borrowing binge over the last ten years. He have made no attempt to do anything about it, and he have emasculated the BOE to make sure that they couldn't do anything nearly it either. However, borrowers also own to take responsibility for what they are borrowing.
They enjoy tried to blame it all on the American sub-prime, but this is humbug, because we have our own sub-prime, and if it hadn't kicked bad in America it would hold eventually kicked off here, contained by fact, the problem would enjoy been bigger, so they did us a fancy.
thanks to those who misuse the credit system who can't afford what they desire.
the logic was..greed and money
The sub-prime fiasco are for mortgages surrounded by the US where the lend rate was around 1%. So, the bank lent to anyone and everyone as the rate was so low. These bank then sold the mortgages on to other bank around the world.
Then, went the interest rates go up, the people contained by America couldn;t afford to pay theri mortgages and default. Then, the banks around the world who bought these mortgages bad the American lenders (Northern Rock etc) are the ones who suffered.
Basically, it was the population boroowing in America, not us over here that have caused this. But, wehn America have a financial problem, then the intact world feels it.
Only a unquestionable percentage of people will be able/willing to money their debts. If everyone was 100% guaranteed to do this, the mortgage rate should be alike, and low, for everyone.
However, suppose you have a group of family, out of which, 5% will for some reason never foot back their debts. If we know exactly which ones these were, we wouldn't dispense them loans, but since we don't the only choice is to tilt rates for everyone in that group, so that we don't lose money, overall.
The problem comes surrounded by how to figure out whether it's really 5% that won't discharge, or 1%, or 30%. Grossly underestimating the portion of society that will walk away from loans lead to huge losses, like we see today.
No Elizabeth, it is not a fraud..
the piece is that the financing company is taking additional risk to lend to an individual next to less than within acceptable limits credit scores. for this reason, the company would want to be compensated for the additional risk that it take.
The one element of "fraud" that nearby has be experience of in the sub-prime crisis is the fraudulent completion of applications / declaration by applicants. They are contractually bound to make honest statements surrounded by their applications. Some people hold not.
However, there are a few sub-prime borrowers who have completed their applications from the bottom of your heart and honestly.
Historically, higher interest is charged to beat about the bush higher risk. That's the logic trailing charging risky customers a higher rate.
Sub prime mortgages work ... for a time ... for the lenders. For a time, they label piles of money. They also have homes as collateral.
If a sub prime lender get out of the game, until that time things go haywire, consequently you can bet their strategy was remarkably successful.
Examples:
100 low risk customers pay $5.00 respectively year to the bank.
Bank make $450.00 (10 customers did not pay)
100 high risk customers wages $50.00 each year to the wall.
Bank makes $2,500.00 (50 customers did not pay)
100 totally high risk customers pay envelope $100.00 each year to the Mexican Cartels.
Mexican Cartels breed $3,000.00 (70 customers died or went to prison)
It's simply simple math.
It's not fraud.
I enjoy both SAR-SEP and SEP Accounts, Can I still invest contained by a Roth?
I invest 7.5% of my income in a SAR-SEP and my company match by putting 7.5% into my SEP. Can I still invest in a Roth IRA and what are the limitations?Answers: As long as you meet the AGI precincts, you can put $4,000 in a Roth IRA for 2007 or $5,000 surrounded by a Roth IRA for 2008 (unless you are over fifty where you can put an supplementary $1,000 in the Roth IRA).
The income phaseouts start at $95,000 for a single personage and $150,000 for those filing mutually.