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Are 3% Mortgages on the Way?By
Tuesday, December 9, 2008
Could we see 3% mortgage rates here? Absolutely! Most investment analysts also think the massive injections of money by the government have to create inflation and higher interest rates. That is likely true... eventually. But you can go broke betting on that before it arrives.
Further Reading:
The Coming 'Lost Decade' in America?
Market NotesTHE WORLD'S TOP "SAFE MONEY" STOCK
Right now, there's a big "should" vs. "is" story unfolding in the world's largest company, ExxonMobil (XOM).
XOM is one of the world's best companies by a country mile. Its efficiency at producing oil and choosing where to invest shareholder money is legendary. As our colleague Dan Ferris points out, the company earns double-digit returns on its assets even when oil prices are below $20 per barrel. Here's where the "should" vs. "is" comes into play. Oil prices are down more than 50% since October. Stocks are down 24% since October. Given the destruction in both oil and the market in general, XOM "should" be plummeting. But shares are up slightly in the past two months. It's a big bullish sign when a stock like XOM "should" fall but doesn't fall... It's a sign that a huge amount of smart money is buying shares. If you're looking for a "safe money" stock, look at ExxonMobil. In the midst of a horrid market for oil shares, it's holding like a rock. |
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