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Knowing what is going on around you always helps. What will the credit card
companies do? Look what will happen to the trillions of dollars in credit card
debt with a rise from 17% to 19% interest rate. This debt belongs to the real
shoppers that are keeping this economy going.
BOTTrader@xxxxxxx wrote:
> If bonds break from current levels just under 120, down to 104, that's
> roughly a 13% price drop - which would drive interest rates up to the 6.5%
> level. At 6.5%, the average home buyer is going to be able to buy 13% less
> total home square footage, 13% fewer cars, etc. Effectively, 13% of the
> average borrowers marginal free income stream is going to be taken out of
> commission. And this is the credit fuel that drives the interest-sensitive
> portions of our economy that make the difference between growth and recession
> ( and thereby the difference in the direction of stock prices) . An 80 basis
> point interest rate hike is amply enough to grind this economy to a soft
> landing pancake if not worse. In today's economy, an interest rate change of
> even 20 or 25 basis points can make a serious change in overall activity.
> THIS is where technical analysis benefits from some "tempering" by
> fundamental analysis.
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