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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (13191)	6/12/2012 4:35:11 AM
From: John Pitera	2 Recommendations Read Replies (1) \| Respond to of 33421

Elroy, Banks make more money in FX, derivatives, bonds etc in volatile markets. The bid ask spread expands and that enables the dealing desks to make more money...... big banks have corporate and institutional orders above and below the current level and there is no reason they can not front run the orders. Also if the Euro is at 1.2401 and their are a slew of corporate hedging orders at 1.2400 or 123.99 then the dealer can go long at 124.02 knowing he has a stop loss at 124.01......... the customer order that gets filled. MCD, CSCO, IBM GOOG are not in the business of currency trading.... they are hedging the money they make in their business. The CFO is not a hero and also not seen in most companies as a profit center. They get the big paycheck with zero risk. why take on risk.. which they are mandated to not take..... no reward for being the hero...... *earn your money by reducing risk.* *Henry Volquardsen, who is a name for only the old timers on SI around for 12 years or more pointed out that the swaps market used to have a 10 point spread and on a 500 million dollar swap or a 3 billion swap* that was big enough to drive a mack truck through....... ie easy money for price makers. 1 million bonus points for anyone who can find that post....... that's a limitation of S I. I don't believe it's easy at all , unless you go over the derivatives, Dark Vadar's revenge. His posts are so cogent and illuminating they must be compiled into a book. John

To: Elroy who wrote (13191)	6/14/2012 2:15:10 AM
From: John Pitera	2 Recommendations Respond to of 33421

30 year fixed at a record low of 3.67%. You can look at most areas of the country and find that there are no negative cash flow deals, in terms of buying real estate, and renting it out, especially since as an owner of rental property you can expense out (deduct from current year rental income) capital improvements ( a new heater or A/C...... many examples. over the past several years we've seen erosion in housing prices, along with a concurrent raising of rental rates, As more and more people are shut out of the mortgage market, because of higher lending standards and the higher percentage of Cash on the barrel head to get into a house..... 20% or more in many cases. People's credit ratings have deteriorated. s and obviously current home owners get locked into their houses, as the price of real estate has decreased and left up to 1/3 or even 40+ of home owners have negative equity in their houses. They can not sell. Unless they walk away..... and bye bye credit score. 15 year fixed are quite a bit lower........ I would not be surprised that those with sterling credit cna access 10 year adjustable rate money at 2%. John