RE:RE:Cash deposit or selling stocks to meet margin? Migraine and fellow board members, do you know how much of an impact these high rates will have on the financial health of these oil producers? It's evident that the governments at all levels as well as the banks have outwardly expressed their animosity towards the sector, I don't know how the debts have been structured. I've only looked at a couple of names and they have terms of up to 8 years, fixed at ridiculously high rates. Are there any companies in particular that you own whose level of debt is unsettling to you? Nuttall has reiterated several times that these oil companies will be debt free by next year or the year after.
Migraine, the amount of HELOC you qualify for depends on your employment income (and a small percentage of rental income), not the amount of equity you have. I went all in on real estate. Think about just a little more than ten years ago when the government had 40 year amortization and zero down payment. The banks gave cash back, which meant that you were given cash for buying a house. I don't know what happened to them but they let me a 25-year-old biochemist who's just been at her job for 4 years, making 80k/year buy a total of 8. Mind you I had more money than most people my age, but if I were to go house hunting now, I can barely qualify for a 1-bed shoe box in downtown Toronto.) The banks are extremely strict with their lending now so I wouldn't qualify for much HELOC anyway. Nor do I want one. With my personality, I'd be agog to blow it on some "hot" stocks as soon as I could get my hands on it.
I believe there's more pain to come. It's predicted that the bank might increase the rate by a full 1%, followed by two .50 to finish the year, many people will be selling equities to pay off the HELOC (I've talked to many). Others will have the balance reduced. The pressure on selling won't abate until we have this margin and HELOC under control. People sell not because they want to, but because that's the only option they have. Take me for an example. My brokerage will do the selling for me if I won't do it myself. :-)
If the market continues behaving like this for another 2 weeks, I'm pretty much washed out.