Bernanke finally admitted the credit and housing market problems have spread and will problem spread further into the general market.? Really?!?

And on a good note I believe, he indicated investors shouldn’t be looking for a bailout.? After all, you need to be responsible for the risks you take.

They will be looking at data carefully to determine what course of action will be best.? Many still believe a rate cute is in the near future.? Next meeting is September 18.

Our President has also promised some aide for the ailing homeowners.? This needs to be done cautiously.? Just as investors shouldn’t be bailed out, people knowingly?taking advantage of bad loan programs shouldn’t be either.

The next year should be quite interesting.? Keep looking up…

cd :O)?

We have a 10-year CD where the bank is paying our fee.

Rate is 5.69% APR / 5.85% APY.

View our process and contact us for details.

Despite the higher rates that some of the bigger banks are offering (IndyMac, Countrywide, WaMu, etc.), most CD interest rates have retreated a bit.

Average short-term rates fell, 3?- 5 Basis Points (0.03% – 0.05%), but longer-term actually came up 5 – 10 BPs.? However, what do average rates really matter?? The highest rates we are seeing have fallen overall, across all terms.

As the credit crisis continues, banks smell blood in the water (some of it their own), and as they hope (push, prod) for a Fed rate cut in Septemember, they have begun to lower their rates.? A few weeks ago we saw longer-term rates reach towards the 5.60 – 5.65% range.? Today they are back in the 5.30 – 5.40% range.

I will be updating our CD interest rates later.

Keep looking up…

cd :O)

ING Direct is offering a decent Savings Rate at 3.40% APY.? It is called the Orange Savings Account.? Click here?for details.

They also have an Electric Orange Checking account that pays 3.93% APY if you maintain $100,000.? The rate isn’t bad for $50,000 – $100,000, either.? Click here for details.

ING Direct’s FDIC# is 35489.? They are about $68 Billion in assets.

Updated 2/01/08

Here is some relief form the burdens of the up and down economy.?

You Are a Yellow Crayon

Your world is colored with happy, warm, fun colors.?? You have a thoughtful and wise way about you. Some people might even consider you a genius. Charming and eloquent, you are able to get people to do things your way. While you seem spontaneous and free wheeling, you are calculating to the extreme. Your color wheel opposite is purple. You both are charismatic leaders, but purple people act like you have no depth. ?

I was hoping for Orange as that is my favorite color

We’ve updated our running article/commentary on the highest CD Rates.? Check it out and let me know what you think.

Highest CD Rates

cd :O)

I’ve read quite a bit of misinformation on the internet about FDIC insurance.? Given the headlines on Countrywide, people are concerned.

If your bank is FDIC insured (Countrywide is), your funds are insured up to $100,000. If you have a joint account with your spouse (or anyone else for that matter), the funds are insured up to $200,000. IRAs are insured to $250,000.00.

If for some reason your bank fails, the FDIC sends your insured funds within 7 – 10 days. It can take longer if your funds are placed through a custodian and the custodian has over $100,000 on deposit. The custodian has to file forms showing that all of their accounts belong to seperate individuals, with no one owning more than $100,000.

So if you aren’t over the insurance limits and you want to take advantage of some of the higher rates that banks have been offering, feel safe doing so.

If you want help figuring things out, leave a comment.

IRA CD
Certificate of Deposit Rates

Update 8:45 PST.? Some comments from JumboRateNews, another publication we subscribe to, as to why this isn’t like the S&L crisis in the 80s:

A spike in oil prices in 1979 pushed up inflation and coupled with interest rate deregulation to create a perfect storm of sorts in the 1980s. Short-term interest rates on deposit products got very expensive in relation to the income generated by long-term fixed-rate mortgage products. It doesn?t take long to become insolvent when you are paying 15% on deposits and only charging 4% on loans.

They?do go on to point out though, that this scenario is new and we will have to wait and see if the regulations put in place will be suffecient to stave off bank failures.? The difference between 15% and 4% is quite large, but the difference between 5.50% (current rates many banks are paying) and 0% (rate of return on a failed loan) is significant as well. My personal opinion is smaller banks will probably whether the storm better since they are more likely to not be as heavily involed in the subprime?and Alt-A mess.??But even large banks caught up in the mess?have a lot?options to help meet short-term funding needs.? I don’t think we are looking at a situation where we will see?a lot of bank?failures.? Probably just a time where the Fed needs to lower rates a bit.?

Morning comment. In a surprise move, the Fed cut the discount rate to 5.75%.? However, we aren’t out of the woods let.? This is only the rate that the banks can borrow directly from the Fed at for short-term needs.? This will help banks, but not everyone else.

At least it is an acknowledgement, that the economy is not in a stable state.? Many are now betting on a Fed Funds rate cut in September.? I’m sure the Fed wants to see how this move affects the economy over the next few weeks.

Here is a summary from Wescorp,

“Realistically, all this does is calm things down and buy some time.? The banks are the ones that can borrow, and they aren’t necessarily the ones that are troubled.? This isn’t going to suddenly free up mortgage lenders to start making home?loans again either.? This also doesn’t fund long-term that huge pipeline of big LBO?loans on the bank’s books. ??But, this was a much needed step.”

cd :O)

Updated 1/03/08.? LibertyPointe Bank has had some of the highest CD Rates.? They are still competitive.? They are only available for NJ, NY, and CT residents.? CD Rates are 1Y at 4.80% APY, 2Y at 4.90% APY, 3Y at 5.00% APY, 4Y at 5.20% APY and 5Y at 5.25% APY.

LibertyPointe Bank is relatively new.? They were established 10/3/05.? They had a 2.6MM loss as of 12/31/06, but a profit of 27K for the 1st quarter of 2007.? As of September they were in the red again with a loss of 549K.

They are not a big bank; Assets are $1204MM.? Their FDIC# is 58071.

http://www.libertypointebank.com/rates.asp

I wish we had an Underdog, but I’m not sure we do.? Chicago Fed President Poole made the statement that only a “calamity” would warrant a rate cut.? How much more of one does he want?

The 3-month T-Bill is down to 3.78%.? A few weeks ago it was above 5%.? The 2-year is down to 4.22%.? A few weeks ago it was around 5.15%.? One of the big daddy’s, Countrywide is facing beyond serious problems.? At least we have somewhat of a normal looking yield curve at the moment.

Unfortunately, our economy has become one based and fueled by credit.? And credit is getting harder to get.? A rate cut won’t make it easier to get, but it will help the housing and home equity market stave off an even bigger drop and maybe give the economy a soft landing.

Bloomberg is another source of good articles and?commentaries.? I tend to like the opinion section the best.

You can also read, Dwight’s latest.

We will recover, it will probably just be a little slow going for a bit again.? Keep looking up.

cd :O)