--- In AsburyPark@yahoogroups.com, "dsher4" <[EMAIL PROTECTED]> wrote:
>
> Forget housing related stuff, those businesses are still troubled, you
> want to buy retailers and tech off this rate cut. Retail has been
> crushed and this will help and tech was already strong, has good
> overseas exposure and also is a cyclicall that benefits from rate
> cuts. Avoid the housing stuff, too hard to figure out, do the easy
> stuff
>
However, the real problem in the housing market is not interest rates,
according to Keith Gumbinger, vice president for HSH Associates, a
mortgage industry publisher. It is that there is not enough money
available for making loans.
"The liquidity problem hasn't changed," Gumbinger said. "The primary
issue is trust between buyers and holders of debt." Investors holding
worthless or heavily discounted paper are not eager to buy more.
As a result, Gumbinger said problems in the housing market problems
are too entrenched for a Fed rate drop to have an immediate impact.
Trust can take time to rebuild. Something that might speed the
rebuilding process is better-than-expected earnings from the major
Wall Street banks. Tuesday, Lehman Brothers' reported
higher-than-forecasted profit, which allayed fears about the wallop
that the mortgage crisis may inflict on Wall Street. Goldman Sachs,
Morgan Stanley and Bear Stearns are due to report earnings later this
week.
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