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alstry (36.57)

Bend Over

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October 08, 2008 – Comments (3)

Read my previous blog.

Rates cut 50bps but 10 year treasury rates up 20bps????

If GE and Goldman are paying 10 1/2% for perpetual preferreds with a warrant kicker.....you will be paying a lot more than 10 1/2% in the not too distant future!!!!!!!  If you think you are as good a credit risk as the above two companies......you should change your medication or recreational drug of choice.

The current administration is taking every possible step to insure that happens before they leave town in January.  My guess is that long rates and mortgage rates will start skyrocketing very very soon.

A half a point rate cut and the market tanks a couple hundred points.....who coulda predicted that???

 

3 Comments – Post Your Own

#1) On October 08, 2008 at 7:11 PM, awallejr (75.87) wrote:

To be honest, if it wasn't for the cuts I bet the market would have tanked harder right off the bat.

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#2) On October 08, 2008 at 7:18 PM, alstry (36.57) wrote:

Just for today....now the market will be off a few thousand points bofore we are anywhere close to a bottom.....maybe.

 

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#3) On October 08, 2008 at 10:57 PM, awallejr (75.87) wrote:

I dunno, alstry.  I really hope you are wrong because too many people will get hurt.  I can't predict the future except knowing that one day I will be dead.  I just can't see a stock market several thousand more points lower.  I'll give you maybe 7000 in pure panic.  I think 8000 is too low myself but the market will decide.

It really is all about inflation in the end.  Yeah we had a commodity bubble (K Ares you were right on potash stocks short run ;p), but the world is still growing.  We used up all the easy stuff.  Demand long run will only continue to increase over the decades.  Treasury and FED are flooding the market with money to really try to prevent a Great Depression scenario.  There really is still a demand for homes, just not at inflated prices.  Eventually we will hit fair value.  I think 2010. And since market looks ahead 6 months,we  might see a market recovery mid 2009.

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