Will There Be Panic In The Markets?

[Retire Soon]

I'm not worried about individual investors panicking during this crisis. It's the mutual fund and pension fund managers that I worry about. Today's small investors are much more financially educated and sophisticated than what many people give them credit for. Many are invested in 401Ks, 403bs, and IRAs and are in it for the long haul.

[OAG]

IMHO this rate cut will not help the market in the long run (falling value of the dollar), but will help A LOT of ARM "victims"/holders maybe not lose their homes - which may have been the real intent of the action.

[lazygood4nothinbum]

does that mean my house will sell now?

[cute fuzzy bunny]

Fed rate cuts might have little or no effect on the mortgage markets.

I think it reeks of desperation and worry. They should have cut a half point at the last meeting and then a quarter at this one. Would have sent a better message and might have avoided some of the concerns about how the fed is reacting.

[OAG]

Does it not have an impact on "resets"?

[al_bundy]

most ARM's are based on LIBOR plus a premium

last year libor was like 5.5%, now it's like 3.8% partly due to rate cuts. if we have more trouble with banks where they may go belly up than the LIBOR will go up.

i believe it's controlled by British bankers and is not an exact number but an average of different banks charging slightly different rates to each other

[cute fuzzy bunny]

The london interbank rates are one index arms are tied to, others include COFI and treasury indexed plus a premium.

I dont think any ARMS are tied to the fed funds rate, although movements in the fed rates can have intermediate to long term effects on other indexes that ARM's are based on.

I wouldnt expect this to have any huge immediate effect on ARM resets taking place over the next couple of months. It'll probably have more effect (negative) on money market rates.

[clifp]

Damn where is the panic.

I got up pretty early for me (I am retired after all) and the market has already bounced back. The financial are mostly up, dow and S*P down only 1.2%.

So much for bargain hunting.

I don't get it world is ending, the world wide financial system is about ready to collapse, the folks in China, Asia and even Europe have been engaged in two days of panic selling. There is trillions of dollars of dodgy debt owned by naive oil shieks, and Chinese factory owners all starting to panic. It is 1987, or 1932 all over again.

Why aren't you all selling?

Please Please follow Cramer's advice and SELL, SELL, SELL. Tell your friends SELL, SELL, SELL
and when you are all done please tell me so I can

BUY, BUY, BUY.

[cute fuzzy bunny]

Keep your powder dry folks. Hold your allocations, do your rebalancing, and buy stuff thats being put on fire sale.

[twaddle]

I hear Intel is having a fire sale. And it's been going on for 8 years now.

[unclemick]

Being a Boglehead - I suggest stay the course! (with serious money that is!)

Remember this - Sunday 2/3 Superbowl and 2/5 Mardis Gras Day WILL NOT be canceled due to weather.

Plus I heard on good authority the Pats have a good football team.

Greed/fear/lust/passion - man I wish I had more mad money. I'm thinking maybe Caribean later this winter(renewed my Passport) - or should I lust after falling knives.

heh heh heh - decisions, decisions .

[FinanceDude]

Originally Posted by Wags

Agree the US does not build anything anymore but get the popcorn ready it is going to be interesting morning and day.

Could any of this be attributed to GREED?

Let's hope that the U.S government does not have to bait out the people who made bad investments.

GOD BLESS

Wags, you need new material..........time to put some REAL thought into your posts...........

[FinanceDude]

Originally Posted by twaddle

I hear Intel is having a fire sale. And it's been going on for 8 years now.

No fair!! I've been buying MSFT for 8 years!!

[TromboneAl]

Wags, you need new material

I think the concept of baiting out bad investors is quite novel, and worth a try.

[cute fuzzy bunny]

Originally Posted by twaddle

I hear Intel is having a fire sale. And it's been going on for 8 years now.

What is it Wab, a bit of a slow day? Rain keeping you in the house?

Yeah, they've slumped a little since a couple of their best people left about 8 years back.

Good news is a lot of people bought in when it was 12-16 while I was recommending it, and a fair number of those got out when it was in the mid to high 20's. Although I thought it still had a little headroom to it from there and I think it'll be back. The selling is a bit overdone.

[twaddle]

Originally Posted by cute fuzzy bunny

Yeah, they've slumped a little since a couple of their best people left about 8 years back.

Well, my point wasn't really about INTC specifically. There are plenty of stocks that haven't recovered yet. In fact, the returns of the S&P 500 for the last 10 years have been below CD yields.

I just thought it was amusing that two ex-Intel guys were talking about buying at fire sale prices. How do you know when the sale is over?

[cute fuzzy bunny]

Nothing is over until we decide it is!

Was it over when the Germans bombed Pearl Harbor?

Hell no!

And it ain't over now. Cause when the goin' gets tough...the tough get goin'!

Who's with me? Let's go!!!!!!!

[REWahoo]

Originally Posted by cute fuzzy bunny

Was it over when the Germans bombed Pearl Harbor?

Nein, Hare Herr Bunny!

[FinanceDude]

Originally Posted by cute fuzzy bunny

Nothing is over until we decide it is!

Was it over when the Germans bombed Pearl Harbor?

Hell no!

And it ain't over now. Cause when the goin' gets tough...the tough get goin'!

Who's with me? Let's go!!!!!!!

LET'S DOOOOOO IIIIIIITTTTTTTTTTT!!!!!!!!!!!!!!!

[cute fuzzy bunny]

WAAAAAAAAAAAAAAAAAAHHHHHHHHHHH!!!!

Oh shoot, the markets are closed...