Archive for November 14th, 2008

Lots of bits of news today, most of which showing how weak the economy is, that it can get worse, and that our government is disfunctional.

Retail sales fell last month off the cliff.  If anyone owns or works in a typical store, sales volumes are horrible.  People are not spending.  Major stores are gearing up for Black Friday already. Some, like KMart, are even starting the Black Friday sales now!  With credit card usage restricted and new high, high rates in the high 20%s and 30%s, people will think twice about buying extra gifts and stocking stuffers.

This Holiday Season we will be thankful for the things we have and family and friends, rather than how big the boxes of gifts are.

The FDIC launched their mortgage foreclosure proposal, designed to save millions of homes from foreclosure.  Some are complaining the Mrs. Blair, the head of the FDIC, is making a play for a political appointment by President elect Obama.  I do not care if it is a political move.  She, thankfully, is trying to move things forward and help people, families, consumers, and many more.  Blair is playing unlike the political and football players we are seeing between Wall Street, Congress and Pennsylvania Avenue in DC.  If only they can say something and then do it, things could be better.

For the FDIC proposal, see http://www.fdic.gov/consumers/loans/loanmod/index.html

No one has confidence in DC, the Treasury, the SEC and the Fed at the moment.  Those who may have faith may rethink their bases for faith.  The rules from 6 months back are no longer valid.

Maybe with the FDIC leadership and impetus, we will see some positive moves from DC and help may be on its way.

Let me know your thoughts.

With the Dow up more than 500 points, after breaking through 8000 on the low at about mid day, we are seeing what will likely be the rythym we will experience over the next six to none months.

There should be much optimism regarding future legislation in the first quarter of the coming year, but at the same time, great fear as to the risks facing the US and global economy.  Thus, there is great opportunity for profit given the volatility and the ability to trade quickly.

For long term investors, there is great hope that the systems will be stronger after this chaos and that growth willbe more consistent moving forward.  Bond yields should be more normalized and defaults after 6-9 months should decline.

Be careful in the short term.  The rallies make for great trading opportunities.

We are seeing credit card rates sky rocket for those who are paying and have credit cards with a balance.  What is happening to those who are not paying?  Please leave a comment, as this is important to monitor and track!

New credit card issuance is at a screaching halt.  If you are seeing new credit issuance, please let me know.

Current mortgage rates here in Florida are as low as 3%, yes 3%, with 1% points, tied to the 30 day LIBOR plus a margin.  Thus money is cheap, if you can get it.  Loan to values on mortgages on these rates is 50% for a cash out refinance and 60% for a $ for $ rate refi.  Thus, if this kind of mortgage would serve you, let me know, but for 90% of those looking to refi or buy a home, the rate is great but the LTV is too low!

I understand that the SBA is beginning to issue loans for those stressed by the economic challenges.  Let me know if you have had success!

Speak with you tomorrow!

God Bless!