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EScroogeJr (< 20)

betting on another rate cut



April 22, 2008 – Comments (1)

Once again, banks are unhappy, and HELOC'ed homeowners are busily scratching their tiny wounds, putting tears on their face with the help of a can of paint. The people to be robbed by rate cuts own no houses and cannot count on the sympathy of policymakers. So it is a safe bet that the Fed will cut once again. The coming months will see another transfer of wealth from the homeless savers to the leveraged homeowners, so place your bets accordingly. Down with "financial ultra-short" SKF. Up with banks and builders.

1 Comments – Post Your Own

#1) On April 22, 2008 at 6:08 PM, Imperial1964 (94.01) wrote:

I agree with you up to the point of "Up with banks and builders."  Although, as a short-term, speculative trade I think you're probably right.

Not that anybody cares about them, but savers with homes are getting screwed by inflation on one end and falling asset values on the other end.  I haven't yet figured out to whom my wealth is getting transferred, though.

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