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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Q. who wrote (7084)	5/9/1999 6:30:00 PM
From: Bob Rudd	Respond to of 78462

JohnG S&L's Haven't studied industry deeply, but 3 issues to consider: Rates/Yield curve: Lower rates encourage refinancing & flatter yield curve lowers profit spread for outfits that borrow short [deposits] and lend long Profit squeeze: Net based mortgage sources [Quicken for example] increase competition for loans, while the 800 # Gorilla they sell the loans to {Fannie Mae} has more clout that they do. Y2K=No buyers Buy out premiums lower since potential purchasers of S&Ls don't want to add to y2k headaches by purchasing potentially non-compliant unit. The Y2K issue goes away soon. If economy continues strong the yield spread will widen, but loan volumes may decline. Net based competition is going to increase with lower cost value chain due to lack of bricks & mortar, and net based shopping making comparison between local and national sources easier thus lower rates, fees & profits. Bob