Also, did I not read somewhere that banks have been increasing their spreads? Something about "capacity issues". Now they lend to only the higher quality borrowers, charging them more for the privilege. Great bunch of guys here, aren't they?
Wow, that adds up to some real money when your talking 400K-500K for a house here. Do I hear a few more nails in the "Hawaii is different" coffin?
Now if only my savings account interest rate would go up!
So, B.S. Bernutty is gonna loose control anyway. It was nice knowing all of you. I'll wiggle my squirrel tail in a semaphore for CR so you can recognize me in the wasteland.
Maybe this has been noted but there are a great number of people who can currently pay their 15 or 30 year mortgage. But when they realize their home has lost so much value that they may never recover and they will be underwater for the next 20 years how many of those "homedebtors" will just stop payying, walk away and become renters?
Sorry guys, but this is flight from saftey, further showing the "normalization" of the markets since the zombification efforts. A ton of MBS buying today.
stocks go up reducing the demand for t-bills, which pushes mortgage rates higher which depresses the housing market which pulls stocks back down again, allowing t-bill yields to decrease.
realistic, or simplistic?
or will the fear of higher interest rate persuade more buyers to act now be a greater effect on prices than the monthly housing cost analysis?
If they did not get out of them these last couple of months, so sorry charlie.
OK, CNBC is finally talking about the carnage in the bond market, I'm just waiting for the positive spin, come on you know they have to do it or the men in black will have a talk with them.
I've got some land in Hawaii that you might like...er, or not.
Ahhh, thanks but no, I think I need to wait for around 2 to 3 years. Hawaii has always been boom and bust, and the bust are in a big way.
Not a big believer in cycles, but when they slap you in the face, you have to pay attention. I own my current condo and its paid off, so I can wait as long as I need to and keep on building cash, heck if I'm lucky I may be able to pay cash for a decent place in three to four years.
MS,
Look around the world, Global Government Bonds - Markets Data Center - WSJ.com
The US has lower yields than any country but for Hong Kong, Japan, Switzerland
This is not a flight from the USD. As long as that doesn't happen, the economy is going to keep doing what is has been. If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much. The problem isn't the interest rate, it is the debt outstanding, and it is so large that the only way to support it is through ponzi asset growth. One caveat: the interest rate is the problem if you are prepared to have a negative nominal rate.
"The US has lower yields than any country but for Hong Kong, Japan, Switzerland
This is not a flight from the USD. As long as that doesn't happen, the economy is going to keep doing what is has been. If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much. The problem isn't the interest rate, it is the debt outstanding, and it is so large that the only way to support it is through ponzi asset growth. One caveat: the interest rate is the problem if you are prepared to have a negative nominal rate."
Disagree. They never have really tried to control it, but prod it. Once again, enough of the group think, find the REAL answer.
I agree that this current market is full of head fakes, misdirection, and out right lies. I am not even going to think that am am so smart I can out think the insiders and time the markets; let alone really understand it.
I have moved all I can to cash for one simple reason, they have not changed the rules in that arena yet, but the next move?
I hope I see it when its there.
Correct in that they don't fully control it; the market does that and I misspoke.
That said, the actions of the Fed have historically had a significant impact on where rates go; so much so that the market has generally followed it's lead.
REAL Answers? My take...
Market is remarking that the emperor has no clothes.
Will no longer follow the Fed's lead so closely and will do in own self-interest.
And precisely who is the market? Private foreigners/Foreign SWF.
Any idea on generalized time frame of this leading to a blowoff in the dollar?
Controlling interest rates is Ben's "final solution" basically when he outright takes over the treasury markets and buys the whole yield. That is when the fun really begins, but we have not seen that yet. For the country's sake, hopefully we don't, but for comedy's sake, I hope he does.
The US has lower yields than any country but for Hong Kong, Japan, Switzerland
This is not a flight from the USD. As long as that doesn't happen, the economy is going to keep doing what is has been. If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much. The problem isn't the interest rate, it is the debt outstanding, and it is so large that the only way to support it is through ponzi asset growth. One caveat: the interest rate is the problem if you are prepared to have a negative nominal rate.
It's interesting how Obama has been trying to promote this global fiscal deficit blitz.
But if so many countries start issuing debt the financial markets are going to be saturated with it. Not only does that threaten to drive up yields globally but it could cause buyers to become much more selective. In a debt-saturated environment if other countries are seen as having higher quality debt than the US the whole plan could potentially backfire if huge overseas supplies of debt draw capital away from the US.
It's funny to me how our new educated, enlightened, scientifically-minded administration seems to be buying into one of the most ridiculous fantasies concievable, if history is any guide.
A good analysis of today's activity posted over at Setser:
"Something has really changed. There is a volume effect of Chinese Treasury purchases, and there is a PRICE effect. China was a non-economic buyer of long-term Treasuries. It was price insensitive. Much more so, arguably, than the rest of the market.
Now China is 1) less important to the long-dated Treasury market as a % of issuance; and 2) more focused on the shorter end of the curve.
When a price insensitive buyer steps back from a market, what is the likely impact on the demand curve? At what price (yield) do private savers want to finance $3tr in Treasury issuance?
Its easy to argue that the recent run-up in Treasury bond yields is a result of this price effect. Why didn’t it occur sooner — say, in 4q08? First, it took time for the Fed, through its QE commitment, to eliminate deflation tail risk. Second, Treasury issuance really started to ramp in earnest over the past two months or so."
I think this lines up well with the evidence we've seen over the last few months. A couple of charts that appear to indicate that the "deflation tail risk" is gone are here.
"If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much."
the fed activity in the mortgage market was never about the purchase market, it was about the refi market, notably, lowering payments to US households, and more importantly, giving the banks the opportunity to flip the Alt A, OA, subprime on their books into FHA/agency paper, and generating fee income at the same time (150 - 200bps per mortgage).
that is going to be a lot harder now when the call centers call and say "we can offer you a 5.5% rate" versus "we can offer you a 4.75% rate".
BB's mistake was that in order to corner a market, you have to corner the whole market, and since MBS is tied to the curve, unless he bought the entire curve, his only choice would be to buy MBS through the curve.
which he could still do, but that would of course kill the MBS market for years, as it would remove the entire private-market infrastructure.
Obama's #1 economic mission ( in collusion with the 19 too big to fail banks that got trillions in TARP ) is to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored.
But they are going to be a day late and a dollar short
Maybe this has been noted but there are a great number of people who can currently pay their 15 or 30 year mortgage. But when they realize their home has lost so much value that they may never recover and they will be underwater for the next 20 years how many of those "homedebtors" will just stop payying, walk away and become renters?
It has been noted, but it's worth remembering. Take interest rates up above 8 percent and real estate pricing will collapse like wet cardboard. Back in the day in California it was a push to buy a $200K house with a nine-percent loan and 20 percent down. Conceivably, it could be again.
I was actually feeling OK when "the real Volker" was propped up as part of the administrations economic team, I started to come to reality when it became obvious that he was being cast out. I mean who needs reality when your smart, know all the answers, and out to save the world.
-That reminds me of an old saying of mine. (IT field)
Hire the dam. teenagers while they still know everything.
I dunno... I've seen some MBS traders on other sites posting that something is going on.
But it hasn't shown up in 30 year conforming - not on main street, not yet.
This is like Krazy K's call a few months ago the 'world was ending' in equities - then we had a 2 month bull run. Note to Karl: wait for the actual results to come in - thank you.
Karl needs to focus on facts - he'd be advised to turn off the caplocks and study CR methodology. The chart CR has on the front page 10 Yr T vs 30 Fixed Conforming says it all. Solid factual presentation - you make your own call.
30 Yr F/C could easily & quickly GO to 6.5 or higher - especially if market participants anticipate T rates going higher. Again see CR's curve front page... walk up that line.
BTW - Bloomberg had Jumbos at 6.5% today... cherry picking I'm sure but still.
"My current rate is 5.875. I probably should have refi'd when........."
.....I remember one time in the "olden days" we were waiting for it to hit less than 7%. It never did, and ended up passing through our "high 7's", on into infinity.........good luck, Outsider
"This is like Krazy K's call a few months ago the 'world was ending' in equities"
KD has a lot of good info buried on his site, and some knowledgeable commentors as well, but the noise to signal ratio is off the charts at this point. You think people here get "doomy"? It's Krazy Town over there...
Keep looking at U.S. National Debt Clock : Real Time
My only problem with this is that it does not include the unfunded pensions and liabilities of the federal employees. If I remember that included it comes out to around $450,000 liabilities per tax payer. /I almost typed tax prayer/.
All I can say it it really kinds of blows my net worth calculations and retirement planing. So if inflation goes over 4%, is there any chance in hades that anyone below the deca-millionaire will be able to retire?
Ouch. equities aren't looking good today. Treasuries are getting killed.. Wonder who is going to have to write down Treasury and MBS exposure. Do insurance companies have to write down their valuation losses on long-term securities?
To buy more TBT, or not to buy? That is the question.
@Chainsaw, I am just a humble middle-aged dude on an intertube message board, but one thing I am very good at doing is never letting 20 points of profit in a trade get away. I would have to advise covering at least a little something near here. Very, very close to support going back two years on the 20+ yr index.
I've already got Eras End on my ignore list ( a short, but distinguished list).
Here's what JJ had to say about the MBS market today (versus Eras End's "lots of buying in MBS today")
"There has been massive selling of mortgages by an eclectic group of clients. In the early stages of this game servicers and originators led the charge. Today real portfolios joined in the selling to make for the ugly scenario we have today."
kauai, yeah, what was it? they can show a profit on the declining value of their own debt? they can't show a profit on the declining value of their assets yet, right?
Does anyone know of a country other than the US where a 30yr fixed rate mortgage is offered? In Canada a 30year mortgage usually refers to a 30 year amortization, but a reset of 5 years. The longest fixed rate available up here is 10yr and the interest rate is near double the 2yr mortgage rate
Full disclosure: I've ridden TBT down from the low 60s, all the way to 38 or so, added a little more at 50. So I was way early with my call on the long end. Don't know if these last few trading days are really the beginning of the big move back up, but I do think that move is inevitable at some point. I'm not a good enough trader to try and make money in equities anymore, so I'm trying to figure out a way to preserve some wealth by capitalizing on the eventual humbling of Mr. Bernanke.
Since somebody must have been on the other side of those trades it seems to me it must technically be true that there was "lots of buying" today....
Exactly. And what was even more bullish is that those buyers got 'better value'. Same thing with stock market - values looked better today at close than yesterday. It's all a matter of what side of the trade you are on... and the middlemen agent/brokers love it BOTH ways... Ka Ching! Ka Ching!
//It has been noted, but it's worth remembering. Take interest rates up above 8 percent and real estate pricing will collapse like wet cardboard.//
My bet is that when interest rates start poking towards 8% there's going to be a temporary spike in buying. All the fence sitters will worry about rates shooting to 18% and jump in. After the panic buyers burn off, the market will continue to stagnate/slide.
Ponyless -
I think they may be able to do it if they say - Through the PPIP, (or what ever it's name will be next week). I sell this asset to myself at a loss, then I have made X in profit.
As for the doom and gloom here, I see doom if NK lobs a few nukes at SK, Japan, and maybe FEDEX's a few to the US. That is doom and gloom. Everything else is the market. Either lead, follow or get out of the way. Right now I'm standing as far out of the way as possible. The doom situation is when I'll be bending over to....
Comrade Misean is Dope (profile) wrote on Wed, 5/27/2009 - 12:42 pm
Hmmm...listening to the dow ticker....I am reminded of that old Tarzan joke punch line:
Whooooo Greased the vine!?!?!??!?!?!
Talk to me in 1200 points. What we have now is so divorced from investing there are no investing processes applicable.
"Does anyone know of a country other than the US where a 30yr fixed rate mortgage is offered? In Canada a 30year mortgage usually refers to a 30 year amortization, but a reset of 5 years. The longest fixed rate available up here is 10yr and the interest rate is near double the 2yr mortgage rate"
Not me, and I have seen mortgage debt from quite a few countries.
I know where you are going though, WTF? 30 year fixed rates?
Lot of history there, but goes to my point that the mortgage finance system in this country is totally broken.
Let rates go up to 8% and Joe Underwater Homeowner can squeeze his home equity back from the bank, if he saves and earns something and was lucky enough to lock in at 5.
The start of dollar collapse is around 1.60 eurusd. Then foreigners most likely will pull up and let the US economy collapse. The bond market holds now all the keys. Most likely this fall things will seriously go out of control.
kauai, sure.. If they buy it by using a shell company through the PPIP at a higher price than on their books they can show a profit. Considering this is the real purpose of the PPIP they will probably be able to do this too..
@Chainsaw, I am just a humble middle-aged dude on an intertube message board, but one thing I am very good at doing is never letting 20 points of profit in a trade get away. I would have to advise covering at least a little something near here. Very, very close to support going back two years on the 20+ yr index.
I agree. don't buy more TBT here. My target is to sell TBT at 5.5% yield on the 30-year T bond. But I might take some off the table if TBT gets up around $60. Why be greedy? And silver is going higher, so you can recycle profits.
Misean,
So it is unlikely a 30yr fixed rate mortgage makes sense in any rational environment, and one should look at the fact it still exists because it is still affordable to some rather than how much more expensive it is compared to a 30yr fixed rate mortgage from lala-land. The risks are just so big, I don't see it sticking around
can't wait for the infomercial where they send you an envelope to mail in your flatware for cash
Now that will be something to watch for, but is demand really there or is this another head fake.
Now why do I feel like a dozen people have just slapped the back of my head?
Mish Shedlock turned bullish on long term treasuries last week. However, Clyde Harrison stated at the Chicago Resource Expo in April that if the 10 year US treasury broke its major resistance @ 3.10%, it would set the stage for a bond market crash. Clyde is famous for his line that all currencies sink, but some sink faster than others. Nancy Pelosi, one of the greatest spenders the world has ever seen, noticed that her credit card's interest rate went up and the limit went down. She left for China on Sunday to find out why. At that same expo, there was a rumor circulating, which is also on the internet, that when Hillary went to China last December, she promised them that if the US defaults on its debt, that China would be granted eminent domain. US debt instruments, especially the municipal bonds and high yield corporate junk, rallied nicely after December. Beware of women politicians in pant suits.
Wow, that adds up to some real money when your talking 400K-500K for a house here.
Since most people buy what the can afford, this just means that the 400K-500K house is now 300K-400K. (math may be off; i'm on a dial-up and can't be bothered to look).
jansen posted an interesting link about how the non-absolute prior rule is starting to undermine the capital structure.
"So it is unlikely a 30yr fixed rate mortgage makes sense in any rational environment, and one should look at the fact it still exists because it is still affordable to some rather than how much more expensive it is compared to a 30yr fixed rate mortgage from lala-land. The risks are just so big, I don't see it sticking around"
The 30 year mortgage will last as long as Fannie/Freddie/FHA last. How long that will be is anybody's guess. But if we ever go to a covered-bond type market, most mortgages will be hybrids. Look at the jumbo market, almost exclusively (75%+) 5-1s and 7-1s.
"So it is unlikely a 30yr fixed rate mortgage makes sense in any rational environment,"
They never did. It is all a game manufactured by the gov't and banks. Never before the gov't got involved would any sane person loan for 30 yrs at a fixed rate for a long term consumable, like a house (I distinguish against cash flow properties like apts and farms).
Everyone gets all starry eyed about our great savior, the FedGov coming in and creating the wonderously affordable 30 yr mortgage market. Uh huh. All this did is drive up prices (lowered monthly cash outflows) focused peoples attentions to monthly payments (took time, and a gov't run youth indoctrination prison system to weed out any financial acumen from the population) instead of cost. Of COURSE it wasn't done on purpose, just good ol gov't people only trying to help.
In any event, the scam lead to most people paying a HUGE chunk of their life time earnings to banks in interest, which as anyone with some cursory knowledge knows, is paid first, before principle. Add insane rates of inflation that would have lead our ancestors to burn Warshington to the ground, and you have the illusion of houses as investments. When in fact all they did was protect the downpayment from inflation a bit.
The football thing was [part of my warped mind conveying that this is all a game.
**Nancy Pelosi, one of the greatest spenders the world has ever seen, noticed that her credit card's interest rate went up and the limit went down. She left for China on Sunday to find out why. **
Wiping up the choked out drink after reading that, thank you. But I still want to cry after that.
Since most people buy what the can afford, this just means that the 400K-500K house is now 300K-400K. (math may be off; i'm on a dial-up and can't be bothered to look).
I hope so, or more truthfully I'm banking on it. I just hope the collateral damage does not raise my tax's so I that I can't afford it then.
It's going to be pretty funny when the banks need to take their crap back from the fed b/c it is trading at a higher value than the treasuries they swapped them for.
great responses to the 30yr comment everyone. Now does the question is FHA/FHLB/Freddie/Fannie/Ginnie go down before the Federal government? Then the follow-up question of if the govt ditches them under any context, does the market take the govt down in response?
"Now does the question is FHA/FHLB/Freddie/Fannie/Ginnie go down before the Federal government?"
Two equally weighted anvils sit on a cliffs edge, chained around Wile E. Coyote's neck, who is danlgeling over the edge. Does it really matter which one the Road Runner pushes off first?
EHP et al.
In reference to the 30 yr.
If I remember Japan started doing what I called generational mortgages back during their bubble. And even though I was rather young at the time I remember everyone saying how crazy that was. A decade later we came very close to doing it also with a few 40yrs here and there.
But you have to live somewhere, and when an you get someone who slept through all of their math classes being given teaser rates that makes it look like its equal to what they are paying in rent. I can see why some went for it.
I took out my mortgage at 30 years @ 7%, made certain I could pre-pay and then plugged every extra cent into paying it down living paycheck to paycheck.
After 10 years it was paid off and looking at the interest I paid, I still choke but I think it was worth it. Once again I have to live somewhere and I got too much junk to carry around in a shopping cart.
I learned a few things today. i paste them here for others who do not know everything:
"Bid-to-Cover Ratio is a ratio that compares the number of bids received (tendered) in a Treasury security auction to the number of bids accepted.
A ratio above 2.0 indicates a successful auction comprised of aggressive bids. A low ratio is an indication of a disappointing auction, marked by a wide bid-ask spread."
todays 5 yr auction had a bid to cover of 2.31with $81 billion tendered and $35 billion accepted. about $15 billion of that $31 billion was by indirect bidders
"An indirect bid, or IB, which is a bid of significant size that does not go through the primary dealer community. Treasury traders view this bid as demand from central banks, which accumulate dollars during periods of intervention in the foreign-exchange markets. "
48% was purchased by central banks.
I'm wondering, are monetizing purchases by the fed part of indirect bids?
Yep, Denninger has a table in the attached article showing the 30 year mortgages went up nearly 30% today, to 6.5%. Pretty shocking.
It Is Failing: ALL OF IT - The Market Ticker
MS, re: last thread, leading question about 5y Ts
My point was it really doesn't make an impact where they are yielding 1% or 4%
well at least we got inflation somewhere, right?
Also, did I not read somewhere that banks have been increasing their spreads? Something about "capacity issues". Now they lend to only the higher quality borrowers, charging them more for the privilege. Great bunch of guys here, aren't they?
sterlingerl -
went up nearly 30% today, to 6.5%
Wow, that adds up to some real money when your talking 400K-500K for a house here. Do I hear a few more nails in the "Hawaii is different" coffin?
Now if only my savings account interest rate would go up!
EHP-
But if it spikes above 4% in the short term (reflection of the world abandoning anything longer then 5 y) then it makes a difference....No?
Ciao
MS
I love it when Denninger is subtle.
However the spread has reached the lower end of the range, and the recent increase in the Ten Year yield will push up mortgage rates.
...unless the Fed gets busy.
So, B.S. Bernutty is gonna loose control anyway. It was nice knowing all of you. I'll wiggle my squirrel tail in a semaphore for CR so you can recognize me in the wasteland.
Those poor ARMS
Dude, good luck on waiting for CD rates to rise.
I've got some land in Hawaii that you might like...er, or not.
I can haz Free Lunch?
Maybe this has been noted but there are a great number of people who can currently pay their 15 or 30 year mortgage. But when they realize their home has lost so much value that they may never recover and they will be underwater for the next 20 years how many of those "homedebtors" will just stop payying, walk away and become renters?
Sorry guys, but this is flight from saftey, further showing the "normalization" of the markets since the zombification efforts. A ton of MBS buying today.
My current rate is 5.875. I probably should have refi'd when it went to 5, but I was stubbornly holding out for something under 5.
I'm still holding out. Stubborn.
maybe bb is going to dis-intermediate himself
here's an interesting interaction for you:
stocks go up reducing the demand for t-bills, which pushes mortgage rates higher which depresses the housing market which pulls stocks back down again, allowing t-bill yields to decrease.
realistic, or simplistic?
or will the fear of higher interest rate persuade more buyers to act now be a greater effect on prices than the monthly housing cost analysis?
Yep, Denninger has a table in the attached article showing the 30 year mortgages went up nearly 30% today, to 6.5%. Pretty shocking.
http://market-ticker.denninger.net/archives/1066-It-Is-Failing-ALL-OF-IT...
Krazy Karl is cherry picking again... want to cherry pick the other way Bloomberg had 'National Average 30 Yr' @ 5%. Go figure.
shill -
If they did not get out of them these last couple of months, so sorry charlie.
OK, CNBC is finally talking about the carnage in the bond market, I'm just waiting for the positive spin, come on you know they have to do it or the men in black will have a talk with them.
MBS buying???? I don't think so....
MBS SUPER MEGA ALERT: End Of The World As We Know It?
Looking at today's action the move into the mid-$70 range for Oil should not be ruled-out.
Shill, I just had the same ruhroh thought myself.
So reset + recast = time for some new default rate analysis
"MBS buying???? I don't think so...."
Yes so. Today was a major turning point.
Oil bear:
Would you take a short term gain on etf's bought in December or hold out for the >1 year bonus?
Yeah, the comment re those poor ARMS just brought it home.
I think that we can now officially say that the Fed has lost full control of the interest rate mechanism. The resets are gonna be ugly.
Eras End,
What do you mean? Lots of buying... just at much lower prices (higher yields)?
A turning point, yes. What kind of turning point do you think it is?
"I think that we can now officially say that the Fed has lost full control of the interest rate mechanism. The resets are gonna be ugly"
Disagree. They never have really tried to control it, but prod it. Once again, enough of the group think, find the REAL answer.
Krazy Karl is cherry picking again... want to cherry pick the other way Bloomberg had 'National Average 30 Yr' @ 5%. Go figure.
I dunno... I've seen some MBS traders on other sites posting that something is going on.
What happens when the red and blue beams cross in the second plot?
homedad43 -
I've got some land in Hawaii that you might like...er, or not.
Ahhh, thanks but no, I think I need to wait for around 2 to 3 years. Hawaii has always been boom and bust, and the bust are in a big way.
Not a big believer in cycles, but when they slap you in the face, you have to pay attention. I own my current condo and its paid off, so I can wait as long as I need to and keep on building cash, heck if I'm lucky I may be able to pay cash for a decent place in three to four years.
Group mind here.
Assuming that this isn't a single occurrence and start of a trend, then how valid are the recast/reset charts and data?
MS,
Look around the world, Global Government Bonds - Markets Data Center - WSJ.com
The US has lower yields than any country but for Hong Kong, Japan, Switzerland
This is not a flight from the USD. As long as that doesn't happen, the economy is going to keep doing what is has been. If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much. The problem isn't the interest rate, it is the debt outstanding, and it is so large that the only way to support it is through ponzi asset growth. One caveat: the interest rate is the problem if you are prepared to have a negative nominal rate.
This could be related to what's going on
US Treasury chief Geithner to visit China June 1-2
"The US has lower yields than any country but for Hong Kong, Japan, Switzerland
This is not a flight from the USD. As long as that doesn't happen, the economy is going to keep doing what is has been. If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much. The problem isn't the interest rate, it is the debt outstanding, and it is so large that the only way to support it is through ponzi asset growth. One caveat: the interest rate is the problem if you are prepared to have a negative nominal rate."
Well said
'energyecon -
What happens when the red and blue beams cross in the second plot? '
Dogs and cats start living together, of course
10 year closes out with a yield of 3.695% ( thx nemo )
Bohemian rhapsody from Queen comes to mind for some reason.
Eras End -
Disagree. They never have really tried to control it, but prod it. Once again, enough of the group think, find the REAL answer.
I agree that this current market is full of head fakes, misdirection, and out right lies. I am not even going to think that am am so smart I can out think the insiders and time the markets; let alone really understand it.
I have moved all I can to cash for one simple reason, they have not changed the rules in that arena yet, but the next move?
I hope I see it when its there.
How much interest rate VAR exposure did GS have again? Just sayin.....
Eras End.
Correct in that they don't fully control it; the market does that and I misspoke.
That said, the actions of the Fed have historically had a significant impact on where rates go; so much so that the market has generally followed it's lead.
REAL Answers? My take...
And precisely who is the market? Private foreigners/Foreign SWF.
Any idea on generalized time frame of this leading to a blowoff in the dollar?
Deflationary Jane -
Dogs and cats start living together, of course
Only because I'm renting out the dog house to renters who got a "no notice" eviction.
10 year closes out with a yield of 3.95%
3.695% you mean. (Getting ahead of yourself?)
Controlling interest rates is Ben's "final solution" basically when he outright takes over the treasury markets and buys the whole yield. That is when the fun really begins, but we have not seen that yet. For the country's sake, hopefully we don't, but for comedy's sake, I hope he does.
Seriously..
You had me scared there at 3.95%.
LOL my bad thank you NEMO! hahaha!
Just checking to make sure everyone is on their toes!
ehp-
can't disagree......
Ciao
MS
The US has lower yields than any country but for Hong Kong, Japan, Switzerland
This is not a flight from the USD. As long as that doesn't happen, the economy is going to keep doing what is has been. If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much. The problem isn't the interest rate, it is the debt outstanding, and it is so large that the only way to support it is through ponzi asset growth. One caveat: the interest rate is the problem if you are prepared to have a negative nominal rate.
It's interesting how Obama has been trying to promote this global fiscal deficit blitz.
But if so many countries start issuing debt the financial markets are going to be saturated with it. Not only does that threaten to drive up yields globally but it could cause buyers to become much more selective. In a debt-saturated environment if other countries are seen as having higher quality debt than the US the whole plan could potentially backfire if huge overseas supplies of debt draw capital away from the US.
It's funny to me how our new educated, enlightened, scientifically-minded administration seems to be buying into one of the most ridiculous fantasies concievable, if history is any guide.
Denninger has a table in the attached article showing the 30 year mortgages went up nearly 30% today
=====
how can that be when the FNM coupon only went up 7%?
A good analysis of today's activity posted over at Setser:
"Something has really changed. There is a volume effect of Chinese Treasury purchases, and there is a PRICE effect. China was a non-economic buyer of long-term Treasuries. It was price insensitive. Much more so, arguably, than the rest of the market.
Now China is 1) less important to the long-dated Treasury market as a % of issuance; and 2) more focused on the shorter end of the curve.
When a price insensitive buyer steps back from a market, what is the likely impact on the demand curve? At what price (yield) do private savers want to finance $3tr in Treasury issuance?
Its easy to argue that the recent run-up in Treasury bond yields is a result of this price effect. Why didn’t it occur sooner — say, in 4q08? First, it took time for the Fed, through its QE commitment, to eliminate deflation tail risk. Second, Treasury issuance really started to ramp in earnest over the past two months or so."
I think this lines up well with the evidence we've seen over the last few months. A couple of charts that appear to indicate that the "deflation tail risk" is gone are here.
3.695% you mean...
Thanks Nemo. The more simple minded of us get easily panicked by such [air quotes] innocent [/air quotes] mistakes.
I'm looking at around 5% for a 30yr over at bankrate.com. I'm sure you can overpay up to 6.5% - but that's not the going rate, as far as I can see.
"If 3% down and $8k cash aren't enough to restart the debt growth economic ponzi cycle, then $100 increase on a mortgage payment probably doesn't amount too much."
the fed activity in the mortgage market was never about the purchase market, it was about the refi market, notably, lowering payments to US households, and more importantly, giving the banks the opportunity to flip the Alt A, OA, subprime on their books into FHA/agency paper, and generating fee income at the same time (150 - 200bps per mortgage).
that is going to be a lot harder now when the call centers call and say "we can offer you a 5.5% rate" versus "we can offer you a 4.75% rate".
BB's mistake was that in order to corner a market, you have to corner the whole market, and since MBS is tied to the curve, unless he bought the entire curve, his only choice would be to buy MBS through the curve.
which he could still do, but that would of course kill the MBS market for years, as it would remove the entire private-market infrastructure.
what did I say before? price controls never work.
EvilHenryPaulson@12:10 p
The problem isn't the interest rate, it is the debt outstanding, and it is so large that the only way to support it is through ponzi asset growth.
YUP !
Keep looking at U.S. National Debt Clock : Real Time
Obama's #1 economic mission ( in collusion with the 19 too big to fail banks that got trillions in TARP ) is to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored.
But they are going to be a day late and a dollar short
Holy s--t, TNX just closed out with a yield of 9.365%.
Maybe this has been noted but there are a great number of people who can currently pay their 15 or 30 year mortgage. But when they realize their home has lost so much value that they may never recover and they will be underwater for the next 20 years how many of those "homedebtors" will just stop payying, walk away and become renters?
It has been noted, but it's worth remembering. Take interest rates up above 8 percent and real estate pricing will collapse like wet cardboard. Back in the day in California it was a push to buy a $200K house with a nine-percent loan and 20 percent down. Conceivably, it could be again.
"how can that be when the FNM coupon only went up 7%? "
His 6.5% quote on a 30 year looks wrong. it should be 5.5% or so.
for now.
TNX just closed out with a yield of 9.365%.
typo, it was only 6.953%
I was actually feeling OK when "the real Volker" was propped up as part of the administrations economic team, I started to come to reality when it became obvious that he was being cast out. I mean who needs reality when your smart, know all the answers, and out to save the world.
-That reminds me of an old saying of mine. (IT field)
Hire the dam. teenagers while they still know everything.
Check the decimal.
I got 36.95%.
Take interest rates up above 8 percent and real estate pricing will collapse like wet cardboard.
yep, I'm keeping my powder dry for when high interest rates price most others out of the market
Check the decimal.
I got 36.95%.
denninger concurs
I dunno... I've seen some MBS traders on other sites posting that something is going on.
But it hasn't shown up in 30 year conforming - not on main street, not yet.
This is like Krazy K's call a few months ago the 'world was ending' in equities - then we had a 2 month bull run. Note to Karl: wait for the actual results to come in - thank you.
Karl needs to focus on facts - he'd be advised to turn off the caplocks and study CR methodology. The chart CR has on the front page 10 Yr T vs 30 Fixed Conforming says it all. Solid factual presentation - you make your own call.
30 Yr F/C could easily & quickly GO to 6.5 or higher - especially if market participants anticipate T rates going higher. Again see CR's curve front page... walk up that line.
BTW - Bloomberg had Jumbos at 6.5% today... cherry picking I'm sure but still.
" Gavshire Hathaway (profile) wrote on Wed, 5/27/2009 - 12:14 pm
How much interest rate VAR exposure did GS have again? Just sayin....."
I was thinking the same thing about a lot of the insurers....
The problem is 8% interest rates are far away.
a high treasury yield is great for investment. more bang for your buck! should be 10% on a ten year! you guys doomy too much!
"Group mind here."
Tell em, daddy-o.
"My current rate is 5.875. I probably should have refi'd when........."
.....I remember one time in the "olden days" we were waiting for it to hit less than 7%. It never did, and ended up passing through our "high 7's", on into infinity.........good luck, Outsider
a high treasury yield is great for investment. more bang for your buck! should be 10% on a ten year! you guys doomy too much!
=====
buy Tbills now or be priced out forever!
Elmo is exacting his revenge.
Based on today's rout in long Ts, I expect gold and silver to rocket up from here shortly.
In fact, I'm surprised they haven't already.
When you think about it, gold is the antithesis of long Ts. And when long Ts collapse, what else can most of the world believe in?
I'm now up $10 a share on my TBT, and all of that has come in the past six weeks. That's a 19% gain from purchase.
I said yesterday the stock market looked fragile.
Now, I'm saying that if you have some strategy based on waiting for a dip to accumulate gold, silver or miners, don't. Get in while you can.
Gold fever waits for no one.
Bloomberg just seems to have updated the 15:22 close on the 10 yr yield to 3.71...
Bloomberg.com:
Government Bonds
To buy more TBT, or not to buy? That is the question.
Bloomberg.com:
Personal Finance
posted many times before, but this updates every five minutes.
MBS yield up 0.4% today (so far), impact on mortgage rates roughly 1:1.
this is basically the MBS market equivalent of, oh, a 400-500pt drop on the DOW.
"This is like Krazy K's call a few months ago the 'world was ending' in equities"
KD has a lot of good info buried on his site, and some knowledgeable commentors as well, but the noise to signal ratio is off the charts at this point. You think people here get "doomy"? It's Krazy Town over there...
Nova, did they forget to towel the pony again today or what?
Keep looking at U.S. National Debt Clock : Real Time
My only problem with this is that it does not include the unfunded pensions and liabilities of the federal employees. If I remember that included it comes out to around $450,000 liabilities per tax payer. /I almost typed tax prayer/.
All I can say it it really kinds of blows my net worth calculations and retirement planing. So if inflation goes over 4%, is there any chance in hades that anyone below the deca-millionaire will be able to retire?
Karl Denninger is in cohoots with Koch and has taken money from Soros
timmay, ppt please
looks like PPT is still in Easthampton
Ouch. equities aren't looking good today. Treasuries are getting killed.. Wonder who is going to have to write down Treasury and MBS exposure. Do insurance companies have to write down their valuation losses on long-term securities?
ghostfaceinvestah -
this is basically the MBS market equivalent of, oh, a 400-500pt drop on the DOW.
So you mean that bad right?
Sorry, reading and listening to the main stream media it all good, time to smoke some more green shoots?
To buy more TBT, or not to buy? That is the question.
@Chainsaw, I am just a humble middle-aged dude on an intertube message board, but one thing I am very good at doing is never letting 20 points of profit in a trade get away. I would have to advise covering at least a little something near here. Very, very close to support going back two years on the 20+ yr index.
I've already got Eras End on my ignore list ( a short, but distinguished list).
Here's what JJ had to say about the MBS market today (versus Eras End's "lots of buying in MBS today")
"There has been massive selling of mortgages by an eclectic group of clients. In the early stages of this game servicers and originators led the charge. Today real portfolios joined in the selling to make for the ugly scenario we have today."
I forget now, what happens when the 30-year yields more than your fixed-rate mortgage?
Boy Elmo is pissed, look what he did to Kermit!
yogi, you don't prepay.
Write downs, I'm pretty sure the accountants are working on how to turn it into a profit. Now what was that rule again?
"I forget now, what happens when the 30-year yields more than your fixed-rate mortgage?"
Is it assumable?
kauai, yeah, what was it? they can show a profit on the declining value of their own debt? they can't show a profit on the declining value of their assets yet, right?
You get to straddle a banker.
what happens when the 30-year yields more than your fixed-rate mortgage
One by one, the stars would start going out overhead.
Kinda makes it hard for the banks to make money on that nice yield curve they've worked so hard to setup.
misean, you want to sell your mortgage?
Since somebody must have been on the other side of those trades it seems to me it must technically be true that there was "lots of buying" today....
Does anyone know of a country other than the US where a 30yr fixed rate mortgage is offered? In Canada a 30year mortgage usually refers to a 30 year amortization, but a reset of 5 years. The longest fixed rate available up here is 10yr and the interest rate is near double the 2yr mortgage rate
Hmmm...listening to the dow ticker....I am reminded of that old Tarzan joke punch line:
Whooooo Greased the vine!?!?!??!?!?!
ZackAttack,
Full disclosure: I've ridden TBT down from the low 60s, all the way to 38 or so, added a little more at 50. So I was way early with my call on the long end. Don't know if these last few trading days are really the beginning of the big move back up, but I do think that move is inevitable at some point. I'm not a good enough trader to try and make money in equities anymore, so I'm trying to figure out a way to preserve some wealth by capitalizing on the eventual humbling of Mr. Bernanke.
Since somebody must have been on the other side of those trades it seems to me it must technically be true that there was "lots of buying" today....
Exactly. And what was even more bullish is that those buyers got 'better value'. Same thing with stock market - values looked better today at close than yesterday. It's all a matter of what side of the trade you are on... and the middlemen agent/brokers love it BOTH ways... Ka Ching! Ka Ching!
//It has been noted, but it's worth remembering. Take interest rates up above 8 percent and real estate pricing will collapse like wet cardboard.//
My bet is that when interest rates start poking towards 8% there's going to be a temporary spike in buying. All the fence sitters will worry about rates shooting to 18% and jump in. After the panic buyers burn off, the market will continue to stagnate/slide.
"The longest fixed rate available up here is 10yr and the interest rate is near double the 2yr mortgage rate "
Yeah, you only have 3 downs in football as well...so?
Wonder who is going to have to write down Treasury and MBS exposure.
Clearly, the Treasury market is distressed. The model says they are worth par. They will be marked at par.
Ponyless -
I think they may be able to do it if they say - Through the PPIP, (or what ever it's name will be next week). I sell this asset to myself at a loss, then I have made X in profit.
As for the doom and gloom here, I see doom if NK lobs a few nukes at SK, Japan, and maybe FEDEX's a few to the US. That is doom and gloom. Everything else is the market. Either lead, follow or get out of the way. Right now I'm standing as far out of the way as possible. The doom situation is when I'll be bending over to....
and the middlemen agent/brokers love it BOTH ways... Ka Ching! Ka Ching!
=============
"sounds to me like y'all a couple of bookies" -Billy Ray Valentine, Capricorn
Whew.... going up now.
I was scared there for a minute^H^H^H^H^H^H^hour.
Wonder who is going to have to write down Treasury and MBS exposure.
The Federal Reserve?
I mentioned reset earlier,,,,after checking, June is a rest month.....so much for the summer consumer spending.
Double whammy, no job and higher mortgage rate.
Comrade Misean is Dope (profile) wrote on Wed, 5/27/2009 - 12:42 pm
Hmmm...listening to the dow ticker....I am reminded of that old Tarzan joke punch line:
Whooooo Greased the vine!?!?!??!?!?!
Talk to me in 1200 points. What we have now is so divorced from investing there are no investing processes applicable.
"Does anyone know of a country other than the US where a 30yr fixed rate mortgage is offered? In Canada a 30year mortgage usually refers to a 30 year amortization, but a reset of 5 years. The longest fixed rate available up here is 10yr and the interest rate is near double the 2yr mortgage rate"
Not me, and I have seen mortgage debt from quite a few countries.
I know where you are going though, WTF? 30 year fixed rates?
Lot of history there, but goes to my point that the mortgage finance system in this country is totally broken.
Somebody tell me why silver is near $15 and not $8?
Jas, today take a load off your acct balance ?
Nice to see the "top stories" at the Yahoo! finance page include one of Dirk's.
Maybe they always show up there but this is the first time I've noticed one.
The towel truck was supposed to arrive, as scheduled, at 3:30. The driver called in and said "unforseen events had overtaken him."
Let rates go up to 8% and Joe Underwater Homeowner can squeeze his home equity back from the bank, if he saves and earns something and was lucky enough to lock in at 5.
The start of dollar collapse is around 1.60 eurusd. Then foreigners most likely will pull up and let the US economy collapse. The bond market holds now all the keys. Most likely this fall things will seriously go out of control.
8 handle is getting sort of tiresome
30yr fixed, Prop 13, and inflation can make home ownership not too bad.
"Somebody tell me why silver is near $15 and not $8?"
They're not making anymore...Sheesh...you'd think after all these years you'd know that one.
Here you go Dawg
Gold Stocks: Investment Lessons, Strategy, Advice, Help, News, Ideas
All That Glitters Isn't Gold - Forbes.com
kauai, sure.. If they buy it by using a shell company through the PPIP at a higher price than on their books they can show a profit. Considering this is the real purpose of the PPIP they will probably be able to do this too..
nova - "unforseen events had overtaken him."
Maybe I'm just dense, but that went right over my head. Or I have lost any sense of humur.
Why is DUG up 4% from the day's low? EHP said 28/29, not 27.
I agree. don't buy more TBT here. My target is to sell TBT at 5.5% yield on the 30-year T bond. But I might take some off the table if TBT gets up around $60. Why be greedy? And silver is going higher, so you can recycle profits.
Now about those OTC rate swaps, how many hundred trillion?
Nice to see the "top stories" at the Yahoo! finance page include one of Dirk's.
========
yeah, gratz Dirk
Jas, today take a load off your acct balance?
Mish also recently made a "buy" call for US treasuries. Very unfortunate timing.
To his credit, he had made quite a few good calls on the stock market prior to that.
Misean,
So it is unlikely a 30yr fixed rate mortgage makes sense in any rational environment, and one should look at the fact it still exists because it is still affordable to some rather than how much more expensive it is compared to a 30yr fixed rate mortgage from lala-land. The risks are just so big, I don't see it sticking around
the swaps on the GM debt will all balance out, right?
Because the supply of silver significantly lags global demand?
Where do you think there is any serious supply, Dawg? Kitchen knives?
Mines have been shutting down capacity for a year.
anonymous1
Late last week I posted my spiel. I just said yesterday that the thick of this week's business will happen on 28/29.
Kitchen knives?
=====
can't wait for the infomercial where they send you an envelope to mail in your flatware for cash
FCB's redoing the yield curve to force the 1 year to rise. Ah, very interesting.
nice round number close on the DOW today. say goodbye to General Motors soon.
rich,
If USD goes up, metal prices go down in terms of USD and most commodity market trading is in USD. You think Gold is going to keep going up if Oil or Equities go down?
,,,
re: Oil
Now: Hedge Funds Bet Most Since August on Commodities: Chart of Day - Bloomberg.com
Worry about this when the market can clear and add storage capacity at the same time: FT Alphaville » Blog Archive » Energy crunch time
"Now about those OTC rate swaps, how many hundred trillion? "
They don't mark those to market, do they? /snark off/
Citizen Scotto -
can't wait for the infomercial where they send you an envelope to mail in your flatware for cash
Now that will be something to watch for, but is demand really there or is this another head fake.
Now why do I feel like a dozen people have just slapped the back of my head?
nice round number close on the DOW today. say goodbye to General Motors soon.
====
were those two related comments?
Mish Shedlock turned bullish on long term treasuries last week. However, Clyde Harrison stated at the Chicago Resource Expo in April that if the 10 year US treasury broke its major resistance @ 3.10%, it would set the stage for a bond market crash. Clyde is famous for his line that all currencies sink, but some sink faster than others. Nancy Pelosi, one of the greatest spenders the world has ever seen, noticed that her credit card's interest rate went up and the limit went down. She left for China on Sunday to find out why. At that same expo, there was a rumor circulating, which is also on the internet, that when Hillary went to China last December, she promised them that if the US defaults on its debt, that China would be granted eminent domain. US debt instruments, especially the municipal bonds and high yield corporate junk, rallied nicely after December. Beware of women politicians in pant suits.
Come on 10%, Drive the housing prices down some more! I need to buy a couple more!
GM soon replaced on DJIA
GM bankruptcy will selectively improve the DOW 30. Who will replace? Apple is my guess based on recent front running price moves.
No, they're always net positive because both sides of the trade select favorable models for their marks.
went up nearly 30% today, to 6.5%
Wow, that adds up to some real money when your talking 400K-500K for a house here.
Since most people buy what the can afford, this just means that the 400K-500K house is now 300K-400K. (math may be off; i'm on a dial-up and can't be bothered to look).
jansen posted an interesting link about how the non-absolute prior rule is starting to undermine the capital structure.
GM soon replaced on DJIA
====
ahh, got it. replace with Apple, google or amazon??
"So it is unlikely a 30yr fixed rate mortgage makes sense in any rational environment, and one should look at the fact it still exists because it is still affordable to some rather than how much more expensive it is compared to a 30yr fixed rate mortgage from lala-land. The risks are just so big, I don't see it sticking around"
The 30 year mortgage will last as long as Fannie/Freddie/FHA last. How long that will be is anybody's guess. But if we ever go to a covered-bond type market, most mortgages will be hybrids. Look at the jumbo market, almost exclusively (75%+) 5-1s and 7-1s.
EHP,
"So it is unlikely a 30yr fixed rate mortgage makes sense in any rational environment,"
They never did. It is all a game manufactured by the gov't and banks. Never before the gov't got involved would any sane person loan for 30 yrs at a fixed rate for a long term consumable, like a house (I distinguish against cash flow properties like apts and farms).
Everyone gets all starry eyed about our great savior, the FedGov coming in and creating the wonderously affordable 30 yr mortgage market. Uh huh. All this did is drive up prices (lowered monthly cash outflows) focused peoples attentions to monthly payments (took time, and a gov't run youth indoctrination prison system to weed out any financial acumen from the population) instead of cost. Of COURSE it wasn't done on purpose, just good ol gov't people only trying to help.
In any event, the scam lead to most people paying a HUGE chunk of their life time earnings to banks in interest, which as anyone with some cursory knowledge knows, is paid first, before principle. Add insane rates of inflation that would have lead our ancestors to burn Warshington to the ground, and you have the illusion of houses as investments. When in fact all they did was protect the downpayment from inflation a bit.
The football thing was [part of my warped mind conveying that this is all a game.
The 30 year mortgage will last as long as Fannie/Freddie/FHA last.
=====
you beat me to it
Circuit breaker day tomorrow or Thursday, next week? Soon but how soon?
**Nancy Pelosi, one of the greatest spenders the world has ever seen, noticed that her credit card's interest rate went up and the limit went down. She left for China on Sunday to find out why. **
Wiping up the choked out drink after reading that, thank you. But I still want to cry after that.
Circuit breaker up or down?
Told you yesterday's rally was a "lie". Classic pump and dump.
Conjure remains extremely bearish on all long-dated bonds.
Conjure says, "Have a nice day."
Basel Too -
Since most people buy what the can afford, this just means that the 400K-500K house is now 300K-400K. (math may be off; i'm on a dial-up and can't be bothered to look).
I hope so, or more truthfully I'm banking on it. I just hope the collateral damage does not raise my tax's so I that I can't afford it then.
wonder how Jas' hobby of writing out-of-the-money t-bond puts is going?
It's going to be pretty funny when the banks need to take their crap back from the fed b/c it is trading at a higher value than the treasuries they swapped them for.
"the illusion of houses as investments. "
Houses only go down.
Except maybe Frank Lloyd Wright's.
"wonder how Jas' hobby of writing out-of-the-money t-bond puts is going?"
Tears dude....LMAO!
great responses to the 30yr comment everyone. Now does the question is FHA/FHLB/Freddie/Fannie/Ginnie go down before the Federal government? Then the follow-up question of if the govt ditches them under any context, does the market take the govt down in response?
too much Jasenfreude today
Citizen Scotto (profile) wrote on Wed, 5/27/2009 - 1:08 pm
Circuit breaker up or down?
If you have to ask I have some attractive stocks you might be interested in buying...
crap i thought about buying tbt at 45. i bought udn instead. Come on Ben, make me right!
So Ehp, take my short - term gain in oil or try to hold out till December?
I have some attractive stocks you might be interested in buying...
you're lying, you don't own any stocks
wonder how Jas' hobby of writing out-of-the-money t-bond puts is going?
Wow, really?
pigged!
It looks like the "great moderation" CONtinues to unmoderate. You Go Ben!
yogi
What I post should not be construed as investment advice. I would personally sell oil, and even go short in the near term
As the hypersupermajority owner of GM I vote that I get my priority placement $20b back and walk away.
"Now does the question is FHA/FHLB/Freddie/Fannie/Ginnie go down before the Federal government?"
Two equally weighted anvils sit on a cliffs edge, chained around Wile E. Coyote's neck, who is danlgeling over the edge. Does it really matter which one the Road Runner pushes off first?
EHP et al.
In reference to the 30 yr.
If I remember Japan started doing what I called generational mortgages back during their bubble. And even though I was rather young at the time I remember everyone saying how crazy that was. A decade later we came very close to doing it also with a few 40yrs here and there.
But you have to live somewhere, and when an you get someone who slept through all of their math classes being given teaser rates that makes it look like its equal to what they are paying in rent. I can see why some went for it.
I took out my mortgage at 30 years @ 7%, made certain I could pre-pay and then plugged every extra cent into paying it down living paycheck to paycheck.
After 10 years it was paid off and looking at the interest I paid, I still choke but I think it was worth it. Once again I have to live somewhere and I got too much junk to carry around in a shopping cart.
"the illusion of houses as investments. "
Houses only go down."
Yep Thanks for the help!
Actually I had a twofer going, first time that has happened haveing 2 on the front page at once.
I remember some buzz about 40 yr. mortgages a while back.
wonder how Jas' hobby of writing out-of-the-money t-bond puts is going?
Jeebus. No guts, no glory, I suppose.
My experience, that's a tough risk/reward scenario.
I learned a few things today. i paste them here for others who do not know everything:
"Bid-to-Cover Ratio is a ratio that compares the number of bids received (tendered) in a Treasury security auction to the number of bids accepted.
A ratio above 2.0 indicates a successful auction comprised of aggressive bids. A low ratio is an indication of a disappointing auction, marked by a wide bid-ask spread."
todays 5 yr auction had a bid to cover of 2.31with $81 billion tendered and $35 billion accepted. about $15 billion of that $31 billion was by indirect bidders
"An indirect bid, or IB, which is a bid of significant size that does not go through the primary dealer community. Treasury traders view this bid as demand from central banks, which accumulate dollars during periods of intervention in the foreign-exchange markets. "
48% was purchased by central banks.
I'm wondering, are monetizing purchases by the fed part of indirect bids?
The next time I am in the market for a home at the north pole, I will remember that.
Stock market is surging this morning on good consumer confidence numbers. Ned is long MA POT
and GOOG stocks (which keep going up day after day after day)
Breaking News: interesting Finance & Economics Articles
submissions for economics, fi1:03 PM Small-cap value stocks - to date this year's worst segment - have led the charge in
each of the last five economic recoveries. ETF vehicles include DSV, VBR, PWY, IWN, RZV, JKL
and UVT.
Stock market is surging this morning on good consumer confidence numbers. Ned is long MA POT
and GOOG stocks (which keep going up day after day after day)
Breaking News: interesting Finance & Economics Articles
submissions for economics, fi1:03 PM Small-cap value stocks - to date this year's worst segment - have led the charge in
each of the last five economic recoveries. ETF vehicles include DSV, VBR, PWY, IWN, RZV, JKL
and UVT.
Great post from "The Big Picture" Blog:
Foreigners owning Treasuries... double negative:
Dollar’s slide hurting foreign investors | The Big Picture