The Grumpstump

I got ambitious this weekend and made a list of all the best web 2.0 finance sites. I’ve held off including blogs for now and I know that there are probably a bazillion more sites out there that I have neglected to add. If I’ve missed one, drop me a line in the comments or feel free to add it yourself.

Congratulations on another Monday everyone!

-JD

 When the Federal Reserve cuts Interest Rates, it has the effect of lowering the cost for short-term borrowing for banks immediately. In the long term, lower interest rates lead to lower bond rates. Bond rates are what determine the bulk of the pricing for mortgage interest rates.

I think we can all agree that the Fed is trying to stimulate the economy by making the money supply cheaper. However, they are walking a fine line with inflation (as evidenced by yesterday’s Inflation Report) and this proposed stimulus package could be more of a pain in the butt than a kick in the pants.

Here’s how.

Our beloved Federal government doesn’t have enough money to simply write checks to people (of course, why would they have money? It would give them less of an excuse to take mine..) so instead they will be forced to issue bonds (T-bills or Treasury Bills) to cover the difference.

When you sell bonds, increasing supply, prices will drop because there will be more bonds available. With bonds, when prices drop, interest rates increase.

So, taking this very simplified view of things the government is effectively working against themselves on mortgage rates. In the immediate term, bond prices are falling do to inflation pressures (higher inflation means a higher yield is needed to protect value) and are going to be hit again with the market flooded with stimulus package T-Bills. Since the cuts the Fed made just happened, it will probably be the end of the summer before those cuts start seeping into the bond market and help to lower interest rates.

I think Bernake is doing a pretty good job and the government should stop trying to help. Every time it does it seems like it costs me money…

-JD

I’ve been getting e-mails from Zecco lately talking up their investor Social Network called ZeccoShare. It sounded similar to the fantasy stock service that I use called the UpDown, so I had been dismissing it.

However, I took a look at it this morning and was reasonably impressed.

I’ve been intentionally ignoring my brokerage accounts, not because the market is tanking and I don’t want to know the damage, but because the market is tanking and I really want to buy some stock right now. However, I promised myself no more impulsive stock buys until the CC debt was done. As a result, it looks like Zecco has been pretty busy adding new stuff while I have been carefully ignoring it.

I noticed a new stock screener right off the bat under the ‘Quotes and Research’ area of the Trading center. After test driving it, I give it a solid B. It returns stocks quickly, but the results always show Price, Market Cap, and monthly volume regardles of your search term (yield, P/E, etc.) . I would say it’s actually faster and better than Yahoo’s basic screening tool. Using it I was able to determine that Bristol Meyers Squibb is trading with a 5.3% (!!) yield right now..wowza.

As for ZeccoShare - The social network for traders on Zecco, I was a little leery of sharing stock data (well, that’s a lie, I wasn’t really leery, but I can see how some people would be) but it turns out that it’s just holdings and proportions, (ticker symbols and %s) which isn’t terribly revealing because no-one knows quantities or your specific purchase prices.

The Motley Fool CAPS ratings are nice, as well as the overall speed and feel of the site.

I can definitely see myself getting addicted to ZeccoShare once investing time comes around again :).

-JD