I think the FED really panicked today and cut rates along with cutting the cheese. The problem with cutting when you are in a panic is that you can get a nasty surprise!

From Wikipedia on Flatulence:
"Nerve endings in the rectum usually enable individuals to distinguish between flatus and feces, although loose stool can confuse the individual, occasionally resulting in accidental defecation also known as "wet farts", "sharting", "varting", "gambling and losing", "Leaky Pete" or "following through"

Hope the FED has fresh undies for the rest of the week.

Also, if securitization is now just about close to dead (comatose, at least) - why aren't mortgage rates going through the roof? Who wants to loan money for 30 years at 5.4%, or are those advertized rates only going to people with 850 FICOs with 0 DTI, 20% down and 6 months of reserves?

bofiz,

Here's this"

Mortgage Insurance Rates - PMI Mortgage Insurance Co.

The first chart shows NA for 97% or higher LTV for ARM's.

Interesting...

Cheers,

GSE have no risk because we get to bail them out with taxpayers money.

Darth Toll: That's like Ford saying its going to stop selling cars. Wait, that already happened, never mind....

That's like Ford saying "Ok kids, looks like we're on our way!" as the ramp closes on the giant Xaxisian warship taking Arthur, Fenchurch and himself with it.

John M,

It's like Zaphod's Jo Janta 2000 Peril Sensitive sunglasses going completely black.

Cheers,

Mortgages are being priced on the basis of spreads,not risk.Which works fine as long as you can package and sell them.Risk based pricing would be 20% down,33% DTI for 720 plus fico scores,and 12% rates with competent underwriting.

BTW: anyone else notice that those annoying mortgage ads with dancing aliens, people dancing on roofs, etc. are gone now. Something's finally changed in the last few weeks.

You'll be able to sell any mortgage to the government soon for far more than it's actually worth.

ac: can you ellaborate? Hasn't that already been happening (thus the story today about how fannie and freddie will likely write off $16Billion for the 4th quarter)

Also, if securitization is now just about close to dead (comatose, at least) - why aren't mortgage rates going through the roof? Who wants to loan money for 30 years at 5.4%, or are those advertized rates only going to people with 850 FICOs with 0 DTI, 20% down and 6 months of reserves?

nope, those rates only apply to REO's purchased from dealer inventory...
just like used car sales

There are great fundamental problems in the economy created by our enormous debt load, and Bernanke's rate cuts are designed to increase that load; after all, as the interest rate falls, the public is supposed to borrow even more. When the debt burden is the main source of the problem, how can more debt solve the problem?

Ravi Batra speaks truth to power (even if his timing has not always been perfect).

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The Fed rate cut will certainly help; the economy in the U.S. is much stronger than a lot of people are saying,'' Donald Gimbel, who manages almost $2 billion at Carret & Co. in New York, said.A lot of the sell-off has been due to an unwarranted fear in Asia that a slowdown in the U.S. will immediately jump across the Pacific.''

Geoff,

Straits is giving back. Hang Seng and Nikkei not so much.

Thanks Haloscan.

Cheers,

Barley,

"Me thinks while this was a bold move it may carry us in the wrong direction."

Bold...Bold...no. Easy. Bold would be to increase rates. And it shall carry us in the wrong direction.

Cheers,

rich-
Sales of FXP and EEV put seal blubber on the household table for the next three months. Also bought more SRS.

michi_doc,

Thanks very much. Other than trying to make as many retirement bucks as possible, I'm just trying to help other bears put seal blubber on the table.

I watched CNN Asia channel for several hours tonight. The analysts there aren't as hype-oriented as the U.S. version. They are kinda green-eyeshade straight men.

Although the hosts kept trying to put a smile on the news, not one analyst has one positive thing to say about Asia at this point. They aren't even smiling about rate cuts next week.

What happened in India last night isn't a one-time deal, and it isn't just India. Most investors in Asia are green. They are really just chumps for sophisticated U.S. hedge fund shorts. There's no reason left to dance around the seal, making it more miserable.

Things seem to be deteriorating pretty fast...next week's rate cuts seem to be baked-in to today's prices and expectations.

You cant do this but maybe twice. And then, what happens the day you DONT ride in on the white horse to the rescue. Oy...

Then we go into deflation like Japan and become a funding currency for the global carry trade. It is how they gutted our export base so now it will be our turn although wages here will have to fall.

The buying opportunity will come, but it is best if you aren't superballsy to pick a spot and start in lightly. Then add to your position over time no matter what direction we move.

Geoff,

I believed the same up until about three hours ago. Caution is always good, especially when you are way ahead in the first month of the year. But there's rare times when you have to pounce on opportunities.

So, I would advise balancing Geoff's caution with being somewhat aggessive to take advantage of real weakness and deterioration in global financial confidence and too many weak hands. Don't let opportunities in SRS, TWM, EEV and FXP, GLD and SLV pass you by.

There goes the Nikkei...

Europe ought to have fun in a few hours.

Cheers,

What happened? Did the Japanese discover that Ben really meant what he said during hid famous Helicopter piece? Look at the dollar. Pitiful showing. No respect. Getting the passed around like a $2 hooker.

Rob Dawg,

Loved the "Cold Equations" reference, too! Remember "Nightfall"?

The contest between Alan and Ben has begun. Can Ben cut rates faster and leave them lower longer? Gotta save the housing market is the chant of the day.

Savers and retired folks will vote with their wallets next November. Republicans will be out and the next president will certainly replace the PPT members as fast as possible.

But for now, Ben is the deer in headlights and he loves the attention. You can see it in his face....he never dreamed he would have this power (and ultimately big money too).

Anonymoose is right. The housingwire story is pretty disgraceful. This -

"the insurer said it expects incurred losses for the fourth quarter to approximate $1.3 billion as a result. And talk about missing by an entire continent — earlier guidance, provided in October, had suggested paid losses would be between $270 to $290 million."

just blithely assumes that paid and incurred losses are the same thing - you can go back and look at MGIC's guidance in Q3 - their guidance for 2008 realised losses was $1.2-$1.5 billion and their new guidance is $1.8-$2.0. Yes, that's a 50% increase but it is not 'missing by an entire continent'

anonymoose - if you have any interest in casting you eye over a model of Radian that I built (I'm a professional analyst, not specifically on financials, but I know what I'm doing) then email me - sanfranstyle@hotmail.com

anonymoose-
Agreed. Radian is involved in some 'interesting' business lines.

I would argue that given they've provisioned 50% of their RIF on NIM and that the average term to expiration of their NIM business is 2 years (and they're not writing new business) that they're a long way towards cleansing the NIM stables

The seconds business is similarly dodgy. I don't think they've provisioned that puppy adequately. I think you could see another $200-$250 million of provision charge there (on the current RIF net of specific provision of $460 million

So - I agree with you that their business model is not simple, but with care I think you can disentangle it and look at the parts.

Feel free to email if you're interested in continuing the discussion.