Google http://www.cheatnova.org Thu, 18 Mar 2010 18:42:33 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Rising US LIbor? http://www.cheatnova.org/interest-rates-libor/rising-us-libor http://www.cheatnova.org/interest-rates-libor/rising-us-libor#comments Thu, 18 Mar 2010 18:42:33 +0000 admin http://www.cheatnova.org/interest-rates-libor/rising-us-libor If the Fed is cutting interest rates, shouldn’t Libor also fall along
with it? Assuming that the difference from the prime rate and the libor rate is the interest banks make from lending dollars, shouldn’t the spread be narrowing as the Fed cuts rates. I just don’t see any reason why Libor is still continuing to rise.

You are on the right path.

As you pointed out, there is a spread. In the Financial world, this is called the "Ted Spread". The Ted Spread has been widening because it is a function of supply and demand. US Libor is influence by many different bond instruments, but mortgage backed securities are by far the biggest part of the demand side. Normally, with all else being equal, the Ted Spread stays stable when the Fed Rate falls, which leads to lower interest rates. But this is not the case.

As you’ve read in every newspaper, the mortgage industry in the US is the dog house with volumes way down. The spread is widening while the base rate (Fed Rate) is falling, with net-net higher interest rates.

This is not necessarily a bad thing. It’s more of a normalization from "giving a mortgage to everyone who has a pulse" to "giving mortgage to people who are suppose to have them".

The Ted Spread should normalize by 1Q08 as soon as Sub-Prime bottoms out.

]]> http://www.cheatnova.org/interest-rates-libor/rising-us-libor/feed 1 How can the overnight call rates be so low compared to the market interest rate? http://www.cheatnova.org/interest-rates/how-can-the-overnight-call-rates-be-so-low-compared-to-the-market-interest-rate http://www.cheatnova.org/interest-rates/how-can-the-overnight-call-rates-be-so-low-compared-to-the-market-interest-rate#comments Thu, 18 Mar 2010 18:42:30 +0000 admin http://www.cheatnova.org/interest-rates/how-can-the-overnight-call-rates-be-so-low-compared-to-the-market-interest-rate When the RBI has a repo rate of 6% and a reverse repo rate of 7.5%, one would expect the overnight call rate among the banks to be somewhere between 6% and 7.5%. I believe the current very low levels of the call rate is because of the RBI using the repo window to suck liquidity only to a limited extent of Rs 3000 crore / day. What i dont understand is how the call rates can be as low as 1% (the 1% is for interest charged per annum right?). Isnt this cheap money for the banks then? Why not borrow cheap and park them in treasury bonds or liquid mutual funds? How can the overnight call rate be far off from the market interest rate irrespective of the repo and reverse repo rates and the amount of money the RBI actually does borrow from the commercial banks?

Hi!!! I dont know the reason for low calling rates during night times. But I got a site which offers very low calling rate. Find the below link.

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]]> http://www.cheatnova.org/interest-rates/how-can-the-overnight-call-rates-be-so-low-compared-to-the-market-interest-rate/feed 1 What is the Swiss Bank Account interest rate? http://www.cheatnova.org/bank-rate/what-is-the-swiss-bank-account-interest-rate http://www.cheatnova.org/bank-rate/what-is-the-swiss-bank-account-interest-rate#comments Thu, 18 Mar 2010 18:42:27 +0000 admin http://www.cheatnova.org/bank-rate/what-is-the-swiss-bank-account-interest-rate I tried looking around the internet, and I am so far unsuccessful. So does anyone know the current interest rate for a Swiss Bank Account ( savings ) ?

interest rates depend on what currency your account is in.

Swiss francs accounts pay an interest rate that is usually quite low and there is a witholding tax to boot. This is not very attractive and most people (apart from the Swiss) have their Swiss bank account in some other currency such as US Dollar, British Pound or Euro.

Non Swiss franc accounts pay interest in a slightly different way. Your banker puts the money in a special type of fund called money market fund to get you the interest. There is a small cost (usually below 1%) to move the money into the fund, but there are absolutely no penalties and no notice period when you withdraw money. The minimum needed to enter most of these money market funds is only about $200. In Switzerland, this is the standard way of getting interest on non Swiss currencies.

]]> http://www.cheatnova.org/bank-rate/what-is-the-swiss-bank-account-interest-rate/feed 2 Accounting/Finance – Swap fixed rate? http://www.cheatnova.org/1-month-libor/accountingfinance-swap-fixed-rate http://www.cheatnova.org/1-month-libor/accountingfinance-swap-fixed-rate#comments Thu, 18 Mar 2010 18:42:23 +0000 admin http://www.cheatnova.org/1-month-libor/accountingfinance-swap-fixed-rate What would be the swap fixed rate (SFR) for a plain vanilla, two-year interest rate swap, payments every six months beginning 07/01/0x, with the following assumptions/data:
·Swap initiation, January 1, 200x
·FRA1,0 = 2.221%; FRA1,1 = 2.258%; FRA1,2 = 2.322%; FRA1,3 = 2.388%; FRA1,4 = 2.520%; FRA1,5 = 2.632%; (Read the notation, FRA1,0 as six-month forward rate from 01/01/0x, FRA1,1 as six-month forward rate, six-months from 01/01/0x, FRA1,2 as six-month forward rate, one-year from 01/01/0x, etc.)
·LIBOR to remain at 2.18%.

looks like another homework problem. The answer is 4%

]]> http://www.cheatnova.org/1-month-libor/accountingfinance-swap-fixed-rate/feed 1 Traders: Is the price of gold being manipulated by the Feds? http://www.cheatnova.org/historical-interest-rates/traders-is-the-price-of-gold-being-manipulated-by-the-feds http://www.cheatnova.org/historical-interest-rates/traders-is-the-price-of-gold-being-manipulated-by-the-feds#comments Thu, 18 Mar 2010 18:42:17 +0000 admin http://www.cheatnova.org/historical-interest-rates/traders-is-the-price-of-gold-being-manipulated-by-the-feds I believe it is.
But now that we have a new Chairman of the Federal Reseerve Board, the practice of using (illegal) Gold Swaps with foreign countries is going to stop and gold prices will fall in line with historical action.
Coupled with rising inflation and US interest rates, the nominal price of gold will rise to over $2000 an ounce.
Assuming all of the above is true and the spot price of gold will reach its peak in May of 2008, what is the best way to make as much money as possible with the least risk?

1/ GATA beleives it was/is ! In a larger context, I agree.
2/ I am not sure what the eventual price in $USD will be.
HOWEVER, price in $USD might not be a good indicator.You may wish to use another currency. The Gold/Dollar Index has hinted to further strength in the $USD Gold Cash Price.
3/ To absord all the liquidity / rationalize all the paper curreny in circulation, the eventual crossover price I have heard quoted was 50% higher and that was 5 yrs ago I last heard it.
4/ Questions exist as to the "real" quantity of gold acutally above ground. The potential existence of greater amounts than ever officially acknowledged, entering the world gold pool thru "grey" channels makes the potential for mischief (manipulation) significant IMHO.
5/ As to leveraging yourself for this eventually, junior precious metal stocks on the verge of development and production seem a good candidate. Lacking that, one might try a "depositary-like" stock, as CEF, to try to leverage moves. Caution here, as timing will be everything.

Good Luck

]]> http://www.cheatnova.org/historical-interest-rates/traders-is-the-price-of-gold-being-manipulated-by-the-feds/feed 7 I want to refinance my mortgage due to the recent low rate. Should I wait longer? http://www.cheatnova.org/mortgage-rate/i-want-to-refinance-my-mortgage-due-to-the-recent-low-rate-should-i-wait-longer http://www.cheatnova.org/mortgage-rate/i-want-to-refinance-my-mortgage-due-to-the-recent-low-rate-should-i-wait-longer#comments Thu, 18 Mar 2010 18:42:13 +0000 admin http://www.cheatnova.org/mortgage-rate/i-want-to-refinance-my-mortgage-due-to-the-recent-low-rate-should-i-wait-longer I bought an apartment in 2007 and the mortgage rate for 30 years is 6.5%. I recently went to a bank and they gave me the rate of 4.9% (as of April 09) for refinancing. It seems like Obama’s plan is working which is great. But do you think the rate will even go lower? Should I wait longer or better to settle now?

Honestly the rate changing a little bit doesn’t make a huge difference. 4.9% is a great rate and waiting longer takes on a risk of it going up too. I’d just lock in now and get your payments down. The longer you wait, the longer you are making your higher payments too.

]]> http://www.cheatnova.org/mortgage-rate/i-want-to-refinance-my-mortgage-due-to-the-recent-low-rate-should-i-wait-longer/feed 2 Why is the interest rate higher for potential home buyers when the Fed has cut the interest rate ? http://www.cheatnova.org/interest-rate/why-is-the-interest-rate-higher-for-potential-home-buyers-when-the-fed-has-cut-the-interest-rate http://www.cheatnova.org/interest-rate/why-is-the-interest-rate-higher-for-potential-home-buyers-when-the-fed-has-cut-the-interest-rate#comments Thu, 18 Mar 2010 18:42:08 +0000 admin http://www.cheatnova.org/interest-rate/why-is-the-interest-rate-higher-for-potential-home-buyers-when-the-fed-has-cut-the-interest-rate My DH and I have an offer on a short sale home, and we went to the bank today to ask some questions about our potential loan and found out that the interest rate for our 30 year fixed loan has increased to over 7%. Today the Fed cut the interest rate to 1.5%. How do those cuts affect people with great credit who want to buy a home?

the cut should bring the rate down not the other way around. This all comes down to how much down you have and how your credit is. You said great but didnt mention a score. My wife and I got a loan this week for a new home and we got 5.85% fixed for 30. our credit scores are both in the 780 region. I would sugges tyou shop around some if your scores are similar.

]]> http://www.cheatnova.org/interest-rate/why-is-the-interest-rate-higher-for-potential-home-buyers-when-the-fed-has-cut-the-interest-rate/feed 6 What r the short and long term effects of the widening gap between LIBOR and Fed Fund discount rate? http://www.cheatnova.org/libor-rate/what-r-the-short-and-long-term-effects-of-the-widening-gap-between-libor-and-fed-fund-discount-rate http://www.cheatnova.org/libor-rate/what-r-the-short-and-long-term-effects-of-the-widening-gap-between-libor-and-fed-fund-discount-rate#comments Thu, 18 Mar 2010 18:42:03 +0000 admin http://www.cheatnova.org/libor-rate/what-r-the-short-and-long-term-effects-of-the-widening-gap-between-libor-and-fed-fund-discount-rate Just curious if it is a leading indicator of the nasty to come and if those whom the bush represents care or r profiting

Europe will have slightly lower inflation and lower growth rates than the US in the long term. LIBOR and Fed rates should be different. Although the US economy is intimately connected to the European economy, there are still differences. I doubt that it is a leading indicator of the nasty to come. I also doubt that it involves any sort of Bush conspiracy.

]]> http://www.cheatnova.org/libor-rate/what-r-the-short-and-long-term-effects-of-the-widening-gap-between-libor-and-fed-fund-discount-rate/feed 1 Does anyone know of any SBA financing that has a fixed interest rate? http://www.cheatnova.org/interest-rates-libor/does-anyone-know-of-any-sba-financing-that-has-a-fixed-interest-rate http://www.cheatnova.org/interest-rates-libor/does-anyone-know-of-any-sba-financing-that-has-a-fixed-interest-rate#comments Tue, 16 Mar 2010 18:23:44 +0000 admin http://www.cheatnova.org/interest-rates-libor/does-anyone-know-of-any-sba-financing-that-has-a-fixed-interest-rate I have been looking at expanding my business and I have considered financing sources like SBA. However, everyone I talk to has adjustable rates tied to either prime or LIBOR. They also adjust every quarter with no maximum increase. With rates about as low as they can go, they have no where to go than up.

We (lender, not the government) only approve fixed rates on SBA loans when the proceeds are to be used for specific equipment. A loan to assist you with expansion would require a variable rate.

]]> http://www.cheatnova.org/interest-rates-libor/does-anyone-know-of-any-sba-financing-that-has-a-fixed-interest-rate/feed 2 What is the relationship between interest rates and long term bonds? http://www.cheatnova.org/interest-rates/what-is-the-relationship-between-interest-rates-and-long-term-bonds http://www.cheatnova.org/interest-rates/what-is-the-relationship-between-interest-rates-and-long-term-bonds#comments Tue, 16 Mar 2010 18:23:39 +0000 admin http://www.cheatnova.org/interest-rates/what-is-the-relationship-between-interest-rates-and-long-term-bonds Is it when 10 or 30 year bonds go up, interest rates typically go down or do rates go up and down with long term bonds?

Bond prices typically go down when interest rates go up. Because when rates go up new bonds are issued at those higher rates and it makes existing bonds less valuable. And vice versa. The longer the maturity of the bond generally the more a change in interest rates affects the price.

]]> http://www.cheatnova.org/interest-rates/what-is-the-relationship-between-interest-rates-and-long-term-bonds/feed 3