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Posted
Oct 07 2009, 07:23 PM
by
Vad Yazvinski
Rating:
Money Blog: Top Stocks Blog - MSN Money
“Whenever you find yourself on the side of the majority, it is time to pause and reflect” -- Mark Twain
One of the main arguments "perma-bears" used in justifying why the recent stock rally is (and was) destined to fail miserably, has certainly been a widespread expectation of an upcoming collapse in the commercial real estate market.
Just yesterday the Wall Street Journal reported that "banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. 'Banks will be slow to recognize the severity of the loss -- just as they were in residential,' according to the Fed presentation, which was reviewed by The Wall Street Journal".
This is true. It has been clear for a while that hundreds of smaller banks heavily exposed to commercial real estate market are likely to fail or require more capital during the next 18 months or so. But isn't everyone expecting that at this point?
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Posted
Aug 19 2009, 09:22 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
A few provisions of the credit card reform or CARD Act take effect on Thursday, Aug. 20. You'll have to wait until next year for more substantive changes to the way credit card companies operate.
We're referring, of course, to major changes to federal laws and regulations governing credit cards, which won't kick in until February and next August. Because the fact is that credit card companies responded quickly to the passage of the CARD Act by:
Whew! Did we leave anything out? In other words, they're trying to squeeze every drop of blood they can from customers before the government restricts their ability to do that. (To see how widespread these activities are, read "Credit card holders unduly whacked?")
Here are the legal changes you can expect right now:
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Posted
Jul 28 2009, 04:04 PM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
While Tuesday's trading was mixed for equities, for the first time in more than a week corporate bonds traded lower according to Tim Backshall of Credit Derivatives Research.
This breaks a pattern that saw stocks, bonds, and the U.S. dollar rise and fall in unison -- typically with early morning weakness giving way to a late afternoon rally.
Besides some renewed apprehension about the state of the economy after a decline in consumer confidence, a big increase in new borrowing is pushing up long-term interest rates and pushing bond prices lower. Not only does this complicate the housing recovery by pushing up mortgage rates it also increases interest rates on things like auto loans.
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Posted
Jul 10 2009, 05:45 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog The Dough Roller.
Among the many personal-finance debates, the 30-year versus 15-year mortgage is always high on the list. In one corner you have the interest savers who swear by the 15-year mortgage (think Dave Ramsey), and in the other corner you have the lower-payment folks who swear by the flexibility of a 30-year mortgage.
We're in our second home, and in both we financed with a 30-year mortgage, so we've preferred the lower payments over the potential interest savings. But the truth is that there is no one answer to the 30-year versus 15-year mortgage debate. What works best for one homeowner may not work best for another.
Let's take a look at a mortgage example so we can see some real numbers, and then we'll look at the factors one should consider when choosing a home loan.
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Posted
Jul 06 2009, 10:23 AM
by
Catherine Holahan
Rating:
Money Blog: Top Stocks Blog - MSN Money
Is $12.8 trillion not enough? In an effort to pull the country from the brink of depression, the U.S. government has already spent, lent or pledged that amount on stimulus packages, bank and insurer bailouts, auto rescues and U.S. Treasury purchases.
But some are still calling on Congress and other rich nations to do more. On July 8, world leaders meeting in Italy for the G-8 summit expressed support for additional stimulus spending, should the need arise.
The call follows comments made early this week by Vice President Joe Biden indicating that the U.S. could seek a second stimulus package in the future. In an interview with ABC on Sunday, Biden said that the government misjudged the depth of the recession. He also said that, though President Barack Obama's administration is not seeking a second stimulus package now, it could do so in the future.
The reason for the seemingly incredible call for more public funds is the unprecedented pullback in consumer spending. The U.S. economy runs on personal consumption. In recent years, consumer spending has accounted for about 70% of U.S. gross domestic product. In the past two years, however, the consumer spending engine has stalled due to high unemployment, stagnant wages, tight credit and more than 14 trillion in paper losses due to steep declines in property values and market investments.
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Posted
Jun 29 2009, 11:13 AM
by
Catherine Holahan
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Are human beings hard-wired for financial folly?
Yes, according to an article in this month's issue of Scientific American. Behavioral economists and scientific researchers interviewed by the magazine say human brains simply can't account for inflation.
According to the researchers, humans suffer from a biological flaw called "money illusion." To put it simply, our brains get excited when we receive large sums of money, even when prices have increased sufficiently to prevent any real gains in purchasing power. The human mind is simply fascinated by more money, even when it's not worth any more.
If you've followed the markets at all in the past year, you probably know this intuitively; people buy when it seems like everyone is buying and they sell when it seems like everyone is selling. We are motivated by fear, greed and, perhaps above all, group-think. It's in our DNA.
So how do we make sound financial decisions when our very brains may be conspiring against us?
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Posted
Jun 18 2009, 04:30 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
S&P says it does not like the huge rise in U.S. government indebtedness. But, it clearly thinks the Treasury can make its debt service and eventually pay those hundreds of billions of dollars back.
According to the Associated Press, it's unlikely that credit ratings agency Standard & Poor’s will lower its rating on the U.S. government in the near-term.
The rating does not include the “long term” and that is the problem. U.S. borrowing is still rising quickly and could move up by several hundred billion dollars before the end of 2009. The deficit is expanding, mostly because of falling income tax and corporate payments. Companies are making less money and so are individual taxpayers.
The government’s borrowing habit is running up against two critical barriers. The first is rising unemployment. It saps funds from other programs because of the need for supporting out of work citizens. It also lowers the tax base and that process will accelerate as unemployment moves over 10%.
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Posted
Jun 04 2009, 07:22 AM
by
Andrew Rosenbaum
Rating:
Money Blog: Top Stocks Blog - MSN Money
Stock markets in emerging markets like India, China, Brazil and Peru are booming. Their success makes the much-touted three-month rally on U.S. markets look like a tame fizzle.
India's Nifty Stock Index has increased 64% in the past three months. Brazil's Bovespa has advanced 41%. Russia RTS Index is up 90%!
Meanwhile the Dow Jones Industrial Average has risen a mere 28% in the same period. Where would you put your money?
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Posted
Jun 03 2009, 03:35 PM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
Aetna Options Strike Out
Reporting on option trading is often like covering baseball: Home runs tend to be highlighted while the mundane, though much more frequent strike-outs that occur during a game, are typically ignored.
Similarly, unusual options activity -- suspicious or otherwise -- that precedes a major move can command the attention of market watchers. (This unusual activity could be a merger, or a news event, that results in windfall profits.)
But the reality is that the batting average for unusual option-activity reports being truly predictive (let alone, profitable) is very low.
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Posted
May 28 2009, 09:05 PM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
With Thursday’s rally, the Dow Jones industrials, S&P 500 and the Nasdaq Composite Index are poised to finish higher in May, the third monthly gains in a row for each index. The last time that happened was August, September and October 2007 -- when the market peaked.
It would require a loss of some 237 Dow points to turn May into a loser. It’s possible, but I suspect it won’t happen because the wild volatility of last fall seems to have worked itself out.
Nonetheless, the rally since March looks like it’s running out of gas
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