The Fed Cut rates on Sept 18 by 50 Basis Points (0.50%).? Since then rates fell much more than I expected.? Now there is talk of another cut at the end of October. On average so far 1Y rates have fallen 30 Basis Points and the longer term has fallen even further.? Another cut would [Read More…]

The FOMC dropped rates 50 Basis Points or 0.50%.? The rate went from 5.25% to 4.75%. Short-term CDs will probably drop 20 Basis Points over the next few days.? Whether or not they drop further, depends on the outlook as we had to the next meeting.? Longer-term CDs probably won’t drop as much and we [Read More…]

Almost everyone expects the Fed to Lower rates. Most of the debate is how far. A 50 Basis Point Cut or 0.5% seems that it may give the economy the boost it needs. MoneyCafe has a nice historical graph on the Fed Funds Rate.

That remains the big question.? Various short-term funding mechanisms such as rates tied to Libor have gotten as high as 6.00% as banks and Wall St are struggling to find and make loans. The Fed and Europe’s counterpart continue to pump liquidity into the system.? It still seems more likely than not that the Fed [Read More…]

Bernanke finally admitted the credit and housing market problems have spread and will problem spread further into the general market.? Really?!? And on a good note I believe, he indicated investors shouldn’t be looking for a bailout.? After all, you need to be responsible for the risks you take. They will be looking at data [Read More…]

Despite the higher rates that some of the bigger banks are offering (IndyMac, Countrywide, WaMu, etc.), most CD interest rates have retreated a bit. Average short-term rates fell, 3?- 5 Basis Points (0.03% – 0.05%), but longer-term actually came up 5 – 10 BPs.? However, what do average rates really matter?? The highest rates we [Read More…]

I’ve read quite a bit of misinformation on the internet about FDIC insurance.? Given the headlines on Countrywide, people are concerned. If your bank is FDIC insured (Countrywide is), your funds are insured up to $100,000. If you have a joint account with your spouse (or anyone else for that matter), the funds are insured [Read More…]

Update 8:45 PST.? Some comments from JumboRateNews, another publication we subscribe to, as to why this isn’t like the S&L crisis in the 80s: A spike in oil prices in 1979 pushed up inflation and coupled with interest rate deregulation to create a perfect storm of sorts in the 1980s. Short-term interest rates on deposit [Read More…]

I wish we had an Underdog, but I’m not sure we do.? Chicago Fed President Poole made the statement that only a “calamity” would warrant a rate cut.? How much more of one does he want? The 3-month T-Bill is down to 3.78%.? A few weeks ago it was above 5%.? The 2-year is down [Read More…]

Yesterday, the talking heads of the stock markets wanted us to believe the credit markets were fine.??And the Fed only gave passing notice to the trouble that has been brewing. Today, the Bank of England made an loan of about $130BB to insure the orderly conduct of the money markets.? The last time they made [Read More…]