Tuesday, October 28, 2008

Manic Monday for those in the financial markets

"JUST ANOTHER MANIC MONDAY..." lyrics from The Bangles.
And last week wasn't just another manic Monday, as the markets were wild the entire week. During the past two months in the stock market, there have been 19 trading days with a 3% move. It had previously taken 6 years to see 19 days with a 3% move.
Bonds and home loan rates began the week with a strong rally on news that the world's largest Bond Fund, PIMCO, raised its stake in Mortgage-Backed Securities to its highest in over seven years. Also helping Bonds and home loan rates break above important technical levels were poor earning reports by companies like DuPont, Texas Instruments, Merck, Wachovia, and Boeing.
However, the gains were short lived as both Stocks and Bonds worsened on Friday after heavy selling took place in Asia and Europe. The waves of panic selling started in Japan due to weak earnings reported by Sony and Samsung, then spilled over into the UK as Britain's economy shrank for the first time since 1992, signaling a recession.
And while a strong sell-off in Stocks would typically cause money to flow into Bonds, helping Bonds and home loan rates improve, there is currently a bit of a departure from the normal "see-saw" trading you may typically see between Stocks and Bonds. This is occurring because securities must be liquidated to raise capital. In an effort to offset margin calls, all securities are being cashed in. Additionally, fear from individual investors, where people throw in the towel and want to get out of the market, is creating massive redemptions from fund managers. Despite the continued volatility and massive action of the last week, Bonds and home loan rates ended the week very close to where they began.

So what does this mean to you? Loans are available. You just need to qualify for them and have a real downpayment. Just as always in the income property and Apartment building market.

Banks are not foreclosing on apartment buildings. Apartment owners are enjoying a steady stream of cash flow and income from their investments.

Remember the old saw about not putting all your eggs in one basket. Hope your nest egg was not in the Wall Street basket.

Do you need a good dependable Real Estate investment?

Keith L.

Monday, October 06, 2008

Wall Street or Beer?

If you had purchased $1,000.00 of AIG stock one year ago you would have $44.34 left.

With Wachovia, you would have had $54.74 left of the original $1,000.00.

With Lehman, you would have had $0.00 left.

But, if you had purchased $1,000.00 worth of beer one year ago & drank all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have $214.00 cash

(Disclosure this came from a boating friend. And I think his annual beer consumption is over $1,000 per year.)