Short Term Trading Member Forum

[techcharter]

Interest Rates to Rise on FRE-FNM Bailout

That's the "cause-effect" I expect the headlines to read. E-waves were giving a realistic chance of the beginning of Wave 3 in the 10 yr yield a week or so ago. The 4.5 year yield cycle was calling for a major yield-bull / bond-bear back in March-April 2008.

Using these tools I would conclude the equity markets sold off hard last week to start Wave 3 of WAVE 3, so the euphoria of the bailout will quickly wear off.

An interest rate spike would make it even more difficult for ARM holders to refinance their mortgages, for consumers to pay off their credit cards, or people to buy a new car. The bailout has now entered the realm of unintended consequences.

And remember, "Backfire" is spelled F-E-D.