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Strategies & Market Trends : Classic TA Workplace

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To: The Freep who wrote (115061)	3/19/2005 12:45:48 PM
From: jjstingray	Read Replies (1) of 209892

Yes, but interest rates were low. That kept liquidity in the market. I just cannot see a sustained move up with interest rates going up. Just look how negatively it will affect the economy. Home builders are already down huge based on a few bumps up in the rate. Homeowners that chose variable rate mortgages just to get into their more expensive homes are going to start seeing their disposable income plummet. Borrowing costs will get more expensive across the board. As interest rates go up, the stock market gets less attractive as more convervative forms of investment have better rates of return, thus moving money out of the market. Etc. Etc. I am not trying to be a fundamentalist here, just a realist. I have a friend of mine that has a million dollar loan on his house that is variable and he has seen his payment go up 30% in the last 8 months. I guarantee you that is happening to a lot of people. Rising interest rates has a very negative effect on our economy.

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