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Non-Tech : Cityscape Financial (CTYS) -- Ignore unavailable to you. Want to Upgrade?

To: Ploni who wrote (1344)	10/23/1997 2:08:00 PM
From: Greg	Read Replies (1) \| Respond to of 2544

If someone is selling a foreign currency and buying US dollars interest rates in the US will go down, not up. (look at the 30 year Treasury tody) Interest rates in the foreign currency will have to go up to entice buyers. Higher interest rates should help CTYS bacause prepayments would slow down. However, the assumed discount rate used to calculate the present value of the future income would go up reducing the book value of the asset.

To: Ploni who wrote (1344)	10/23/1997 2:09:00 PM
From: Bosco	Respond to of 2544

Charles - you sez "The subprime companies are the lenders of last resort (ignoring Motley Fool's "joke" about loan sharks). So if interest rates rise, people who are now marginally eligible for a loan from a conventional lender will be forced to turn to a subprime lender." Loansharking (aptly so) of the last resort is essentially a constant, reflecting the lending rules. Granted that the marginal group may squeeze by when $ is aplenty. Unfortunately, the cost of lending/borrowing is the real concern. It is possible that higher rate squeezes out those who are still good credit risk who may feel the cost of borrowing is too high for them to bother. What is left is the desperadoes! This is the stuff of recession/depression. Again, citing Mar 97 as an example, the subprime grp, including CTYS, SFC, AAM etc are the last to recover stockwise. rgds Bosco