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Freddie Fixed Mortgage Rate Rises For Third Week In A Row, At 2010 High: End Of QE Starting To Be Felt
The Freddie 30 Year FRM just posted its 3rd weekly increase, jumping from 4.99% to 5.08%, which is just 1 basis point below the 2010 high recorded in the first week of the year. The end of QE may not have dented stocks much, but it is sure starting to be felt in the mortgage arena. It is only a matter of time before rising mortgage rates halt additional home refinancing activity, and force homeowners to take more drastic measures, such as those prescribed by the national and enforced doctrine of Moral Hazard. It is only a matter of time before the shorts in the MBS market find their bearings again and instead of covering existing positions, press new ones.
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Still friendly territory for all those who were lucky to re-fi at the bottom. For those with ARMs however, once the Fed starts raising rates as fast as they lowered them, i can only imagine more pain will be felt for the jobless ones with typical mortgages
The Fed will NOT be raising rates unless the bond market tells them to. The Fed react.
Should the bond market tell them to , there'll be an engineered sh*t storm like none other to force the momos from risk into "safety".
Theres not much else they can do. Event horizon passed along time ago. We are just playing out the yo-yo. Our destination is Japan and beyond. I do not foresee The End as soon as many here do but we are being sucked into the vortex nonetheless.
They can spin this shyte out alot longer - we must remember not to skip all the chapters of the book.
Does it work the opposite way as well? Eg: did the bond market tell the Fed to lower rates the way they did to come to the present scenario?
Yes, look at short term rates, the Fed is generally behind the curve.
Wait until the 30yr bond future hits 112; you ain't seen nothin' yet... Rates will be the new green shoots...
you can safely bet your left nut (or left tit) that if 10 year rates breakout that QE part II will be forthcoming
money printing is required to win elections in our sorry state
oil is already $87 - oil is higher than any price it traded during 2007 - unemployment averaged around 4.5% in 2007 give or take, unemployment is 9.7% today (in theory)
this whole inflation deflation debate i have never really understood because the answer seems pretty clear, we getting both - anyone who thinks you dont get inflation when you print record amounts of money, well, make sure to remind yourself of that when it costs $120 to fill up that SUV you just bought with a transfer payment the rest of us funded
and wages just went negative for the first time in who the hell knows how long, so pretty clearly if youre one of the 83% who can still find employment, well you pretty clearly see that check in your hand deflating, dont you?
so here we are - leave ZIRP and all the stimulus in place, you can bet your ass we are looking at $4 at the pump this summer, right around the time all those census workers who were "employed" (ie, on the receiving end of $23 an hour transfer payment from the rest of us) find themselves unemployed once again
stocks are up like 75% from the lows, oil is up about 75% from lows what exactly has been accomplished here? the few people that own a lot of stocks are feeling great while the other 90% of the population gets crushed under the weight of higher gas, electric, home heating, etc etc bills?
but hey the 200 day moving average is upward sloping so im sure all of these intricately complex and seemingly problematic relationships have been totally digested by "the stock market"
you're bang on
{inflation + deflation} = indeflation
Laughing in Thailand!!
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