Index fund investors and pseudo-index fund investors must be prepared for a decade of mediocre returns. Stock investors looking for the fast lane will find it clogged. Frustration and other symptoms of unmanageability will be common. Should indexing lose popularity, returns will turn negative as investors seek alternatives. If the herd abandons the index funds [...]
It is clear that during many of the past 50 years, risk-free investments such as Treasury bonds offered real after-tax returns that were either negative or in the low single digits for high-bracket investors. (For example, a 5 percent nominal return in a 40 percent tax bracket with 3 percent inflation is a zero percent [...]
In this section, we examine the delinquency and roll rates, and the default and loss severity of subprime loans. The delinquency status of a loan indicates the number of days the borrower is contractually past due (i.e., days past due or dpd). The loan delinquency statistics may be calculated using either the Mortgage Bankers Association [...]
Democrats and Republicans have settled in the U.S. Congress on a 700 billion euro package for heavy rescue ailing financial institutions agreed. The Democratic chairman of the Senate Banking Committee, Chris Dodd, said on Thursday after two talks: “We are very confident that we can act expeditiously.” Republican Senator Bob Bennett said: “I expect now [...]
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