Little improvement in existing home sales makes Fed nervous – short term rates start predicting rate cut
Karen Zuba
Jun. 24, 2007

The fed has started looking nervous, as existing home sales had nothing to cheer about. The short side of the yield curve is adjusting itself for a possible rate cut by Fed sooner than any one can expect. They will most likely preempt. But that will send long bonds in trouble again. The dollar will fall and gold will rise in price.

The real estate market is weak no matter at which angle you look at it. The weakness comes from excessive inventory in the market place. The realtors are reporting some signs of life but the buyers are nervous that they will take it on their chin again.

The real estate market collapse and slow decay of price and equity in the ‘middle class piggy bank – the home’ will put severe pressure on Fed from the Democratic Congress. A rate cut will signal a possibility of severe recession while inflation pressures will rise exponentially.

While the short-term rates fall, the long-term rates may actually rise. The yield curve is already normal and can get even steeper in the next several months and years.

Negotiate with your bank and lower your mortgage rates, negotiate and lower your property tax – falling real estate presents some advantage
Mike Moran
Try and convince your tax assessor to lower the tax on your property. If needed get your home appraised again. You can eventually take the help of the court for tax appeal.
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Higher inflation, lower short-term rates can push gold to $1500 an ounce – but what the long term prospect of the yellow metal?
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So gold is a total winner isn’t it? Well before thinking about the gold homerun, let us analyze a few things.
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The business confidence index is lower. The small businesses that really contribute to growth are reporting trouble. The energy cost is high. The rates are getting higher. The input materials cost double what it used to be three or four years back.
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Take control of your IRA and Roth IRA – do not let collapsing stock market take your dream retirement from you
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What can you do to earn handsome returns for your retirement funds if you decide to say good bye to stock market? The answer lies in commodity futures market. You can still stock index futures.
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Lower consumer confidence and sentiment numbers will manifest slowing economy
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The consumers contribute close to 70% of the economic growth. A collapse in the confidence index point to the underlying weakness in the economy. The sentiment index weakness point to possibility of severe recession in the economy.
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Little improvement in existing home sales makes Fed nervous – short term rates start predicting rate cut
Karen Zuba
The real estate market collapse and slow decay of price and equity in the ‘middle class piggy bank – the home’ will put severe pressure on Fed from the Democratic Congress.
READ MORE>>

Can long bond yield move towards 3%? What happens if the economy plunges into depression and deflation?
Sam Adelton
Long bond yield in the future is the biggest suspense out there in the minds of the investors. The recent sharp moves downwards in typical of an extreme anti-climax move that normally happens before a long-term trend starts in the reverse direction.
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