October 3, 2007

Stock Markets Telling Us The Worst is Over

Good article from CBSmarketwatch

The stock markets pay attention to interest rates and mortgage backed securities. The health of these markets is directly related to mortgage rates and availability of money for new homes sales.

The market hit a record high....thats right a high as it broke through 14000 before sliding back a little. One can never tell for sure but it seems that the mortgage crises is now behind us. Liquididty is back

1. Libor was 5.7% in early September and now trades at 5.24%.

2. The credit market is now functioning in a way that is conducive toward economic expansion, certainly much better than was the case in early August," said Tony Crescenzi, fixed-income strategist at Miller Tabak.

3. Fed Chairman Alan Greenspan kept up the upbeat tone: "Is this August-September credit crisis about to be over? Possibly," the Times of London quoted him as saying.

4. The Fed did lower rates a half a point recently

5. Kim Rupert, managing director of fixed income at Action Economics. "There's still a lot of nervousness, even if there are no reports of the illiquidity that we saw in asset markets back in August."

6. My blog of 09.18.07 - "foreclosures are declining" and other pieces of news point to the early beginnings of a more positive change in the markets

Surely, there is more pain in the pipeline, because the variable mortgages are resetting and higher monthly costs will force more supply and lower prices and then there is the psychology of boom /busts...it takes a while for people to regain some trust and be sure that the worst is oveR...BUT THERE ARE REAL SIGNS OF HOPE


Thanks for Reading

Howard Bell

Your Property Path

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