If I have a negative profit next week I am buying C.

[Bosnian]

I think C will do great things as mentioned before. My strategy is that if I do not make a profit next week, which is highly unlikely then I am buying a higher stake in C, I already got some in my portfolio. Despite the bad economic news on the bank closures, I do not think it will effect things within the next months range. One of the strongest vices for my love for C is that the LIBOR rate has constantly been going down. If the banks are borrowing to each other again, and the LIBOR continues declining, I see a very great runup in Bank Stocks.

Thoughts Opinions?

[smartinvestor30]

As a trade it seems you can't go wrong with this garbage. As an investment you'd be an idiot to buy that or fannie/freddie/AIG.

[aiki14]

I think C will do great things as mentioned before. My strategy is that if I do not make a profit next week, which is highly unlikely then I am buying a higher stake in C, I already got some in my portfolio. Despite the bad economic news on the bank closures, I do not think it will effect things within the next months range. One of the strongest vices for my love for C is that the LIBOR rate has constantly been going down. If the banks are borrowing to each other again, and the LIBOR continues declining, I see a very great runup in Bank Stocks.

Thoughts Opinions?

I don't see your correlation between LIBOR and Bank stocks, looks like LIBOR goes down, S&P goes down, at least since Nov 2007 anyway
4671

[Bosnian]

I don't see your correlation between LIBOR and Bank stocks, looks like LIBOR goes down, S&P goes down, at least since Nov 2007 anyway
4671


Well the Libor rate determines if the banks are lending to each other, I read a report that it was going down again so thats a good thing. In 2007 they were all the way over 4% so even the banks didnt trust each other or have the currency to trade.

However now they have restored confidence in each other and are lending to each other again. So i dont think it can hurt.

[Bosnian]

I don't see your correlation between LIBOR and Bank stocks, looks like LIBOR goes down, S&P goes down, at least since Nov 2007 anyway
4671


Most adjustable rate mortgages (http://useconomy.about.com/od/glossary/g/Adjustable_Rate.htm) and credit card interest rates are based on LIBOR. As rates reset, the high LIBOR makes the monthly payment also higher. This will cause a financial hardship to you, if you have that type of mortgage.

Even if you don't, and you pay your credit card in full each month, a higher LIBOR rate will reduce liquidity (http://useconomy.about.com/od/glossary/g/liquidity.htm) in the economy. This could trigger recession in 2008.


An increasing LIBOR indicates that banks are charging each other a higher
interest rate to borrow money from one another. This typically indicates that
banks are worried other banks have a greater chance of defaulting on their
loans.

http://www.learningmarkets.com/index.php/20080930456/Stocks/Intermarket-Analysis/understanding-the-libor-ois-spread.html


http://useconomy.about.com/b/2007/12/19/what-is-libor-why-it-is-high-and-how-it-affects-you.htm

[Bosnian]

While this is still high relative to pre-credit crisis levels (when it traded in single digits), the three-month Forward Rate Agreement/OIS basis curve is pricing in a decline in the basis to the mid-20s over the next year," said JP Morgan.


The OIS spreads for all three currencies were little changed on Monday, with the dollar OIS spread down just one basis point at 21 basis points and the euro steady at 43 bps.
In a research note, JP Morgan analysts said the euro OIS spread had fallen to the mid-40s from nearly 200 bps after the collapse of Lehman Brothers last September.

Pre-crisis in July 2007, the euro OIS spread was at around 5 bps while the three-month dollar equivalent was at around 9 bps, according to Reuters charts.


http://www.iii.co.uk/news/?type=afxnews&articleid=7489520&subject=economic&action=article

[RedStripe]

Buying at these levels is still safe.