Jumbo CD Investments - CD Rates Blog

Fed Cuts Rates By 75 Basis Points

In a surprise pre-meeting move, the Fed cut the rates by 75 Basis Points (0.75%).? They dropped the overnight rate from 4.25% to 3.50%.? This came after the European and Asian markets had huge losses yesterday.? The US markets were closed for the Martin Luther King, Jr. holiday.

They are hopping such a large cut will give the economy the ncessary shot in the arm to stave off or get us out of a recession.? The FOMC left the door open for further cuts if things detoriate further.

We’ll be back later.? CD Rates will be dramatically affected by the cut.

Market Rundown

Hey, that’s got a double-meaning today.? First, the markets are, in fact, making a rundown.? The DOW posted a 277 point loss for the day to end at 12,501.? Back in October it was pushing 14,000.

Treasuries gained in price, which means the yields went down.? The price moves inversely from the rates.? The 2Y ended at 2.48%, the 5Y is at 2.95%, and the 10-year is at 3.67%.? And don’t forget the 30-year bond that the gov’t brought back.? It is at 4.27%.? At least treasuries have an almost normal curve going for them.? The 3-month and 6-month ruin it a little bit.

Fed funds stand at 4.25%.? At this point most people expect the fed to cut rates at least 50 Basis Points or 0.5% to 3.75%.? Even if they do, the fed funds will still be above all of the rates except for the 30-year bond.? This means that more cuts are also likely.? CNBC keeps giving rumors of an early cut, but I think that is just them trying to push the Fed along.

In other news, Merrill Lynch got a cash infusion from?the?mid east?to the tune of $6.6 Billion dollars.? They are paying 9% for those funds.? Citigroup received about $14 Billion dollars.? I’m not sure what that is costing them.? First question, with the treasury yields being what they are, why such a hugh premium for the money?? I wonder how much confidence their new outside investors really have in them.? Second, question, didn’t people learn the first time around?? The big banks, big firms, etc. are posting huge losses because of their over exhuberance for the pre-2007 housing market.? I don’t really think they have shown any evidence of learning their lesson.? So the big, BIG, BIG question is what is going on?

Honestly, I don’t know.? I tend to have faith in the power of American to overcome and make it through tough times, but I believe that can only happen if as individuals we learn the proper lessons.? You can’t keep spending more than you make.? You can’t buy a house that is bigger than you need for a price that you can’t afford, just becuase you can get a 2% loan for a year.? We need to get back to the fundamentals or this is going to get much uglier than it already is.

EmigrantDirect Savings Rate - Updated Jan 2008

EmigrantDirect has lowered their savings rate?again, to?4.55% APY. It is still very competitive though.

This savings account works really well. You link the account to another bank account, such as where you do your primary banking, and you can transfer funds between the two accounts on-line.

The FDIC# for Emigrant Bank is 12054. They are over $11.5 Billion in assets.

Here is their website, EmigrantDirect

cd :O)

Countrywide Bailed Out

Bank of America is buying Countrywide and giving them the much needed bail-out that the markets seemed to want.? Lots of stories on the various news sites, here is the one from Bloomberg,?Bank of America to Acquire Countrywide for $4 Billion.

The big Question is whether or not this will be good for BofA.? They are certainly buying them at a deep discount, but will all of the loan problems from Countrywide, drag down BofA.? Bank of America?thinks not.? Only time will tell.

What do you think?? cd :O)

Lots of Turmoil Today

The stock markets had lots of turmoil today.? Initially, the markets staged a rally, but that fell apart in the afternoon.? This year’s start has been one of the worst on record.

There were some rumors about banks in trouble that have proven to be unfounded so far.? The bank of question suffered some serious loss in their stock price and the NYSE even stopped trading on that stock for a short period of time.? Whoever started the rumor should face some serious consequences.

AT&T warned investors that they expect to see “softness” in the consumer end of their business.

Stocked ended up with a loss of -238.? As banks smell blood in the water and are expecting the fed to come to the rescue again, even with a possibility of a 50 Basis Point cut, CD rates have been falling across the board.? It is difficult to find rates above 5%, although we still have a few.

You may find my post on 10-year CDs of interest.? For some other places to read, check out Bloomberg or WesCorp.

cd :O)