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thank god, more govt programs
Calvinloans.
It's good to play with a deck full of wild-cards.
--bh
A hundred billion here, there, everywhere... Smack - I could have had a V8!!!
America really is the chosen land.
Problem with these programs/breaks/credits is that there is no exit strategy. For example:
Industry Pushes to Extend Home-Buyer Tax Credit
The National Association of Home Builders and other industry groups have long argued that the credit isn't large enough to help reinvigorate the housing sector. Now the groups are being joined in their efforts by the Business Roundtable, an association of chief executives.
The Business Roundtable is calling on Congress to increase the credit to $15,000 and extend it to all home buyers. "What is being billed as a recovery is not showing up in the cash register yet," says Richard A. Smith, chief executive of Realogy Corp. and a member of the Business Roundtable. Realogy is the parent of real-estate brokers Century 21 and Coldwell Banker.
Why would anyone ever buy any xMBS ever again if the government dictates terms instead of the contracts in place? The only reason I could see would be massive yield but that has yet to happen.
All will be bailed out in the great USSA (one reason the former USSR doesn't want our dollars anymore?).
Not that it will help, this will be like all the loan mod programs on first liens: pretty much useless.
All this crap sure is helping my OIL position though, as Bailout Nation continues to crush its own currency and standing in the world.
What we need here is a set of completely new and different rules, new and different rules that differ from the old rules in some completely new and different ways. (I am positive that someone out there is currently working on just such a project.)
I guess when you run a $2T deficit, this isn't really much of an add on, percentage wise.
Government is there anything you Can't do?
About tax breaks. Just like easy money there is no exit strategy. Full on currency devaluation is coming or mini-depression take your pick.
Basel Too,
Agree.
More of the same.
Next week: Industry Pushes for Second-Home Buyer Tax Credit.
--bh
As pointed out on the last CRE thread, this does nothing to resolve the empty spaces and lack of cash flow, it just allows bankers and pension trustees to delay recognizing losses. So does this delay the next leg down? Maybe a little, but the market's got to move for the Wall Street front-runners to make money. If the market isn't moving up anymore it's likely to move down.
Basel Too:
Completely self serving, here is the view of Demand in my neck of the woods:
Effective Demand: Ventura County Demand versus Inventory - June 2009
It is significant below 650k (as far as month supply) and inventory is very limited.
They don't want recovery they want reflation of the housing bubble.
Tim,
I'm not sure it matters aside from various betting pools and "I told you so " rights.
Either one, people will be unemployed more than not. I suspect this time around though we'll find out exactly how globally mobile the upper-middle to upper-class is.
--bh
Exactly either way stocks are down.
Cue Otis with the earnings rant here...
albrt,
This is appears to the over-all game plan. Spread the losses (crap) as wide and thin as possible and hope it doesn't stink at the end of the day.
I'm beginning to wonder what the contingency plans say regarding a gross devaluation of our currency. We are heading their fast. Very fast.
--bh
It is significant below 650k (as far as month supply) and inventory is very limited.
I'm assuming that $650K is the sweet spot because it is the GSE/FHA guarantee limit?
Can't say they're not working hard.
The scuttlebutt is that real estate agents are leaving the industry in mass quantities, meaning less money to lobby the gov't. Ditto NAHB, the remodelers, the home furnishings industry, ASID, etc. I'd love to see a chart of the FIRE industries shrinkage over the last few years.
Treasury investors must not want to miss out on the equity bull market!! Check out the TNX...3.93??
From zombie banks to zombie automakers, and now zombie malls and zombie skyscrapers. Can't forget those zombie housing divisions and condo complexes either.
Urrrrrr ...
TLT a dime away from its 52 week low. Yippee.
Regarding the past thread about mortgage rates/MBA apps, any one of you can get current mortgage rates by googling "Wholesale Rate Sheet" and clicking on whatever link you find. Here is one:
https://www.53.com/wps/wcm/resources/file/eb50a40ca5d4857/Group1.pdf
From Fifth Third.
The rate the borrower would be offered would be near the -1 point line (with the -1 being what the wholesaler would keep for revenue), and today, for a refi, probably a 60 day lock.
So on page 3, upper left, a 30 year fixed rate is about 6.125% yield.
Other sources might get you down to sub-6%, and/or the wholesaler might swallow some of their profit, etc, but expect high-fives min.
That is before the price adjusters, which you can see on the bottom of the page, which could move the rate up or down.
I would NOT look at the rates posted on the web pages of banks, those are usually inaccurate and/or misleading (e.g sometimes they quote you a rate with points). Also, the Freddie survey always seems to quote the 0.7pt rate. Bizarre. Most people do not pay points.
The only reason the MBA refi survey was not lower than it was, is a lot of fence sitters submitted apps once rates started to climb. What the survey doesn't tell you is how many apps are floating versus locked.
Anyone floating in a pipeline today is probably a dead app, no sense even working it. BB is going to need to do some significant QE to get those apps back in the money.
I sure hope he does, that will spike my oil position like crazy...
Last Sunday's Doonesbury - Realtor forced to eat at the soup kitchen... pretty funny - Elwood is going to teach her how to dumpster dive...
I'm assuming that $650K is the sweet spot because it is the GSE/FHA guarantee limit?
Well confumbos go up to 729k, I think its just basic affordability for the region. 417k is much more of a limiting factor because underwriting is tighter, down payments go up and fees go up above that point. There is some limited first move up buying (trade up) happening now and I think that is reflected in the up to 650k number.
The bank projected that the default rates on the $700 billion of outstanding CMBS eventually could hit at least 30%, and loss rates, which take into account the amounts recovered by lenders, could reach as much as 13% ...
Thirteen percent? I'll bet a month's mortgage payment on the 'over'. Many of these CMBS are worthless. Not 87 cents on the dollar, not 70, not 50. Worthless.
Glad to see the RMBS debacle helped the Treasury sharpen their powers of forecasting.
"I'm assuming that $650K is the sweet spot because it is the GSE/FHA guarantee limit? "
The limit varies by county, $729K or so is the limit in most of CA.
It was $729K for the last half of last year, then it went down to 650k, then back up...
The govt at work...
Huge turnover in Phoenix as well, although not up to the conforming limit, mostly in a narrow range from the low $100s to the high $200s. And only in central locations.
I found out that the house I've been reporting on is being offered for $89. Recent comps were about $180 to $220. $89 is probably where we are headed unless Bernanke can figure out how to reconnect the inflation pumps.
To paraphrase folks from the housing bubble of yesteryear, 4% on the 10 year looks like its "in the bag."
Blackhat,it is HALF a deck of wildcards.
Currency devaluation of 20-30% would get us there. Otherwise we will realize the true market values at todays dollars.
There is some limited first move up buying (trade up) happening now - ED
That's interesting. So somehow the chain reaction has been restarted?
"To paraphrase folks from the housing bubble of yesteryear, 4% on the 10 year looks like its "in the bag."
Since I am illiterate in matters of bonds and notes.... any idea where this will leave mortgage rates?
Iceman
Jeff "10 earnings growth is in the bag" Immelt
So we give CRE investors debt relief..but homeowners in good standing get zilch....
Angry saver is right..why work or pay taxes...
the higher limits are supposed to expire this year. Anyone want to bet that Congress doesn't extend or increase them?
The modification program in CMBS will likely have a far different outcome from modifications in RMBS, and here is why.
In CMBS, the guys who take the first losses when bankruptcies occur are the unrated / below-investment-grade bond holders, same as RMBS. But in CMBS, the guys who are actually doing the modifications, the special servicers, hold those bonds.
In RMBS, the folks making the modifications have no skin in the game.
In CMBS, the folks making the modifications have ALL of their skin in the game.
Significant difference.
creditcriminalslovetarp (profile) wrote: we give CRE investors debt relief..but homeowners in good standing get zilch....
Angry saver is right..why work or pay taxes...
Next in line, Zombie tax payers.
--bh
"Why would anyone ever buy any xMBS ever again if the government dictates terms instead of the contracts in place? The only reason I could see would be massive yield but that has yet to happen."
problem is, most people are investing OPM. which is why you should NEVER invest via a mutual fund, and if at all possible, try to get the self-directed 401K option.
otherwise, you pump your 401k dollars into "Fidelity Pimco Steady Return Fund" (I just made that up) and you end up owning SPG generated CRE loans wrapped into a CMBS via GS, in turn wrapped into a CDO via MS. no thanks.
I don' think that there is a direct 1:1 correlation since the FED started buying FRE/FNM paper but the spreads between the Treasuries and MBSs have widened over when they first implemented the program
According to the CR chart 4% on the 10 year should be around 6% on a 30 year fixed mortgage.
Better double that first time home buyer tax credit to $16,000 or else.
Fed releases balance sheet info according to cnbc...
OT-
Idle Capacity in the Auto Industry Hits a Record High
AIER - Idle Capacity in the Auto Industry Hits a Record High
kind of looks like a CR chart...
That's interesting. So somehow the chain reaction has been restarted?
Its not a huge part of the market because it is tough to get sellers convinced where market price is from what I can see. They usually overvalue their home.. either because they are convinced that is the value or they want that big nice move-up house just out of their reach.
What do you call those who don't work or pay their taxes? UE.
Are the fireworks starting soon? I want to make sure I get a front row seat.
What does it mean when the bond market is tanking, equities are down, and the dollar is not looking fresh? Are foreigners heading for the hills? Is it proof that the "something for nothing" economic policies of the government (bailing out EVERYBODY, and assuming all risk) can't possibly work? Stay tuned.
The dopes are on a rampage these last couple months or so.
The dopes are on a rampage these last couple months or so.
They barely pretend anymore. We should all be like the Chinese students who laughed at Geithner.
They usually overvalue their home.. - ED
I see that a lot in my area, the "move up sellers" often don't really have to sell, they just want someone to fund their retirement-- in other words, they bought the move-up with the expectation that they would trade down in the end. I'm not excepting myself-- I certainly had that thought, 5 years ago. It's all different now, of course, and I've reached the acceptance stage of grief on it. Sorta.
According to the CR chart 4% on the 10 year should be around 6% on a 30 year fixed mortgage.
Thanks, iceman!
It would be a lot easier if Obama just told us who IS allowed to fail....
"There is some limited first move up buying (trade up) happening now and I think that is reflected in the up to 650k number. "
Is there a reason you think these are move-up buyers instead of just higher end first time buyers/knife catchers? I think even at this level you have some amount of people priced out of the bubble who are trying to get back in a little early.
rb (profile) wrote on Wed, 6/10/2009 - 12:09 pm
They barely pretend anymore. We should all be like the Chinese students who laughed at Geithner.
We are. Have you ever seen the movie Hero? We're the legions of black clad mandarins shouting "DEATH DEATH DEATH".
We're gonna win the argument, too.
Market's P/E Ratio Surges: What Does This Mean?
Market's P/E Ratio Surges: What Does This Mean? -- Seeking Alpha
Good chart
"Last Sunday's Doonesbury - Realtor forced to eat at the soup kitchen... pretty funny - Elwood is going to teach her how to dumpster dive... "
My Brother had to do this for awhile to survive back in the ninties. Anytime someone would ask me how he was, I'd tell them "Well, the last time I saw him, he had his diving cap on". It stumped them every time!
It would be a lot easier if Obama just told us who IS allowed to fail....
Middle Class America
Wow, TNX at 3.944. In April, I ventured out into GNMAs to pull in some interest. Over the last two weeks, I had been steadily retreating back into the short end of the curve and yesterday had exited completely. Still, the suddenness of the spike in rates ate up most of the interest I had earned. This is very bad.
It would be a lot easier if Obama just told us who IS allowed to fail....
The US government, perhaps?
A great source for what is happening in the mortgage market at any one time:
Mortgage Rates Blog
For general bond stuff (techy but I'm always learning something new):
Across the Curve
4.75 on the long bond? I see that right?
Comrade Coinz (homepage, profile) wrote on Wed, 6/10/2009 - 12:14 pm
Wow, TNX at 3.944
July 1, 1981: TNX: 15.84%
""The US government, perhaps? "
I'm quite sure he has little say in that matter.
my evidence professor from last semester is the new "pay czar"
- NY Times
"July 1, 1981: TNX: 15.84%"
I weep for my crappy savings rate today...
basel
wow really
"it is significant below 650k (as far as month supply) and inventory is very limited."
Your porcupine looks a bit bactrian. There are two bumps, one around 417k and one around 729k (extrapolated from numbers posted here) and demand is dead at around 850.
Interesting Times (profile) wrote on Wed, 6/10/2009 - 12:19 pm
I weep for my crappy savings rate today...
Oh don't worry, I bet we beat that number shortly, maybe even in real terms.
4.75 on the long bond? I see that right?
Nah... we're already past 4.76 now.
My dad used to tell me stories about how good it was to be a saver in those days. Inflation was high, but you just bought less of whatever was going up and substituted into other products. And, sat back and had a huge risk free rate.
This might be a good moment to consider what strongly negative news in the emerging markets or the BRIC economies would do to these trends.
I have a dr's apt at 2.
Gonna have to leave early and miss the auction, so I can sit in a waiting room for an hour. Someone else will have to take over posting the results.
Save me a beer, I should be back by 4.
Anybody thinking about fading TBT here? They have to have enough buyers lined up to make the 10 year auction go off smoothely. Don't they? They have to get the bond markets back under control or it is game over.
Here's how I see the current mortgage market. With house prices falling, unemployment high and rising, wages stagnant, savings depleted, household debt at reccord levels, and a huge excess supply of homes, now is an extremely risky time to loan against residential real estate.
Based on the above, mortgages rates are way too low. The fed will try to keep eating paper, but that will only make oil and other interest rates rise. Lose-lose.
Something has to give. Now that the "important" banks have been bailed out, the tough medicine will be shoveled down the CONsumers throat. Welcome to the depression middle America.
Could it be that we are actually dealing with 2 kinds of money in the US--
Real dollars, you know that we go out & buy stuff with and,
Imaginary dollars, that are just electronic entries and sit in banks as a pretence that they are solvent
and actually are not worth anything at all. Since they are not being used for anyting?
I guess this is wild ravings, but take it for what it is worth.
Byzantine_Ruins (homepage, profile) wrote on Wed, 6/10/2009 - 9:17 am
July 1, 1981: TNX: 15.84%
Yeah, but now we have a Fed determined to force rates down by monetizing $300 Billion of varies maturities. I guess "don't fight the Fed" doesn't apply to the bond market. Abject failure.
So which is it Benny B? Let long term interest rates spike higher, or face $200/bbl oil within the next 2 months?
To monetize or not to monetize, that is the question.
Liz,
They are all imaginary dollars. Dollars in the computer are the same as dollars in a credit line are the same as dollars in your purse.
I would prefer not to pay $5 a gallon for gas. High rates would reward savers as long as the whole system
doesn't go down.
Gavshire Hathaway (profile) wrote on Wed, 6/10/2009 - 12:25 pm
Anybody thinking about fading TBT here? They have to have enough buyers lined up to make the 10 year auction go off smoothly. Don't they? They have to get the bond markets back under control or it is game over.
I do not trade it, but I have said for a while, I think the US is a giant ABCP conduit and the short end is going to freeze solid one day soon. I don't think they can "roll up" the toothpaste tube of the yield curve too much more or they risk the short end bolting. Not even gonna hazard what that means to people with money in the game, just my gut.
When will Bernanke learn? Printing money raises interest rates. Deflation lowers interest rates.
Bernanke can save bankers, but only at the expense of everyone else. It's that simple.
Greater Fool,
Good summary.
I'm thinking both slings and arrows, and completely outrageous misfortune.
--bh
Liz - That is exactly Mish's perfect counterfit machine argument.
The FED is printing trillions and burying it in their backyard. That's is why we don't see hyper-inflation. YET.
only at the expense of everyone else
Yes, that's the plan. No bankers jumping from skyscrapers this time. It will be the single moms jumping from bridges.
Well, dollars exist, if you believe in them. I believe that I will go to the bank and cash a check and
then go buy lunch and someone will bring me a snack. I don't believe that the money not being loaned
out exists.
Like fairies the kind of money I believe in may fade away.
A couple of clients have mentioned suicide. I don't quite know what to do.
I would prefer not to pay $5 a gallon for gas. High rates would reward savers as long as the whole system
doesn't go down.
Yes, but the blame for high oil can always go on the Arabs. The Arabs can't be blamed for high rates. Hence, start shopping for a hybrid.
10y bond 3.95% +0.04 (1.02%)
Tick tock tick tock....
heres that fed report on programs and balance sheet
FRB: Credit and Liquidity Programs and the Balance Sheet
But now the Treasury is considering issuing guidance that would allow servicers to start talking about ways to avoid defaults and foreclosures sooner, possibly at least two years ahead of the maturity date of a loan ..
They can't even forecast the next quarter, how can they even know who'll be defaulting in 2 years?
I'll tell ya, before you know it, they'll be sending a big fat cheque to every household.
ll,
Tell them it's only money...or refer them to a counselor. When your world turns upside down, talking things through with an objective third party can be helpful.
the bigger problem with tax credits is (a) they reward people who would have purchased a house/car etc thus the marginal cost of bringing in a new buyer is very high (b) it just robs from the future (which seems to be the Obama plan anyway). so on balance over a two or three year period no new net demand is created and the government has given away a lot of money.
Much better for the government to spend that money on things that would not have gotten done in the normal course of things- e.g. in my town there are sidewalks and curbs that will not be fixed within the next 10 years.
my bad pdf is at bottom of link for fed programs or below
http://www.federalreserve.gov/newsevents/press/monetary/monthlyclbsreport200906.pdf
"Much better for the government to spend that money on things that would not have gotten done in the normal course of things- e.g. in my town there are sidewalks and curbs that will not be fixed within the next 10 years."
Like fixing bridges and filling potholes? The whole notion of 'everything is a tax credit' seems rather preposterous to me in general.
who would have known....
The Fed lost $5.25 billion on mark-to-market valuations on the assets it holds from the rescues of Bear Stearns and American International Group Inc. /quotes/comstock/13*!aig/quotes/nls/aig (AIG 1.63, -0.02, -1.21%) . The assets were worth $68.1 billion as of March 31
of course the real mark to market is unknown...
i just recieved my TARP loan mod paperwork. I now officially have a headache after trying to translate them into English...
It's that bad, K?
I got out of TBT with a 20% profit, but used it to double down on SRS. I am an idiot, a stubborn idiot.
Early reports are indicating that the par 30 year fixed rate mortgage to be in the 5.5% to 5.75% range for the best qualified consumers. This is slightly worse than yesterday. In order to qualify, you must have a FICO credit score 740 or higher, a loan to value of 80% or less and pay all closing costs including 1 point loan origination/discount/broker fee.
Could it be that we are actually dealing with 2 kinds of money in the US
There is a good reason stocks, bonds and other investments are not included in the national income definition of savings. These "investments" are claims on future output/savings. If you try and spend that future output now after over-paying, you'll find out very quickly how little that future savings is worth.
I still see a future that is smaller than today's mob of investors (speculators) envision. Is it any wonder why my simple savings have outperformed the so called experts for decades?
First and foremost - avoid shams.
lawyerliz,
But it won't be $5 gas at $200 pb. That was so $140 pb. It'll be $7-8$ gas.
--bh
Anybody thinking about fading TBT here?
Whether they are or not, I think it's wise to behave as though the markets were manipulated.
So, that's a windy 'yes.'
ETA: Aaaaaand.... dead wrong.
Well liz, I don't speak fluent legalese but I just get that bad feeling I'm getting screwed again. With the bond market going all wiggy at this point I'm terrified to not lock it in at 8 percent right now though. Next adjustment is August 1 and I have a sick feeling that won't be pretty. The only thing bothering me is I've paid on time for over two years and now this will show my being "delinquent" during the trial period of three months...
LL,
Not now, thanks..just speaking from past experience
OT-
chart of the day and week....
jazz - MarketWatch.com Search
July 1, 1981: TNX: 15.84%
And there you have ZackAttack's investment plan for essentially the rest of his working life.
Short the long end opportunistically, never allowing the position to take a 5% loss from any given basis, until it hits 18%, then cover and go long zeros. Watch his Bernanke Bucks double every 4 years.
I'd like to see the bank stress tests run under a scenario where the fed let markets clear at the free market interest rates. Residential mortgage rates would be much higher than today's 5.75%. Commercial mortgages would be even worse off.
As an aside, treasury rates would be ~ 2% and Jas would have been right. Eventually a run on the dollar could force the fed to allow this to happen as nature runs its course.
Layoffs began today. I hope it isn't based on who posts on blogs.
got this about 5 minutes ago..
"we're sorry but this stock is not available to sell short"
JAZZ
Figures....
Ciao
MS
The IT guys are watching you, Speed - see Reuters...
The Fed website shows a purchase of another $3.5B of Treasurys today, after $7.5B on Monday.
It's not working.
I like that ! "Bailout Nation". All part of the govt. "No banker, broker or speculator left-behind".
I though socialism was suppose to help the proletariat over the mega-rich and entrenched ruling class. This is looking more like Kleptocracy or a cronyist state at work.
Anonymity via proxy servers. Learn it. Live it.
Swami predicts yet another massively oversubscribed 10y offering...
ETA: Aaaaaand.... dead wrong.
I know they're watching. I suspect that I'm not the most egregious example.
The Fed website shows a purchase of another $3.5B of Treasurys today, after $7.5B on Monday.
we may be witnessing and event today.....stay tuned.
Liz, if clients have gone down that road, you must try to talk them down from the ledge.
You are witnessing the despair of people who have had the delicate veils of illusion torn from their eyes.
All they believed has been shown false, and they continue to believe the voices telling them that everything is fine and normal. Thus, they blame themselves and feel that they have somehow failed, not just as investors but as people, as human beings.
It is important for them to realize that they are still valuable human beings, with experience and wisdom and compassion and grace, even if the whole money thing didn't quite work out as planned.
threetorches,
well said.
--bh
3.99 on the 10 year. That is deflationary, right?
If Russia, Brazil, and China like the IMF bonds, then I suppose a few others will be diversifying out of USD.
That is the Good luck and Good night portion of the program.
Coming soon.
--bh
With apologies to Col. Jessep in A Few Good Men:
Please tell me that you have something more, Fed Chair. This country is on a trial for its life. Please tell me their Fed Chair hasn't pinned their hopes to a printing press.
lots of demand for the 10 year, at a lower price.
green shoot?
From Krugman's blog:
"Eats green shoots and leaves?
Just a quick note: is it just me, or has the economic news started to darken again? Up through about March, every report was worse than you expected, often worse than you could have imagined. Since then, most reports — although continuing to be bad in an absolute sense — have “surprised on the upside.” But my sense is that in the last few days we’ve been getting reports — Korean trade, Japanese orders, German exports — that are once again surprising on the downside.
This thing ain’t over yet."
Maybe Obama didn't promise him anything, just snowed him emotionally. Outside his field, Krugman's as much an impressionable fanboy as anybody, to the right people. And reality is beginning to set in again as his time in the ObamaBunker recedes.
4% on the 10 year will stifle growth. Deflationary, yes.
"lots of demand for the 10 year, at a lower price."
They're *ucked......but that also means the middle class is as well.
Ciao
MS
just looked at my parents' local newspaper. At the local level, it's basically tax increases followed by fee increases followed by surcharges. Many a local administrator are way in over their heads and just now delivering the bad news. either that or they seriously believed in the second half recovery.
But not the 1st home , just the second. I love this.
$71+ pb.
USD has so much further to go. Gas so much higher. Wages so much to stagnate. So many more jobs to lose.
--bh
Interest Rate ____________________ 3-1/8%
High Yield ______________________ 3.990%
Allotted at High __________________ 46.85%
Price ________________________ 92.968581
Accrued Interest per $1,000 ______ $2.63247
Median Yield __________________ 3.915%
Low Yield _____________________ 3.850%
_________________________ Tendered _______ Accepted
Primary Dealer_________ $35,897,000,000 ____ $10,640,935,000
Direct Bidder ____________ $6,296,000,000 _____ $1,737,550,000
Indirect Bidder ___________ $7,495,500,000 _____ $6,447,779,500
Total Competitive ________ $49,688,500,000 ____ $18,826,264,500
The nice thing about the phrase "second half recovery" is it lulls you into the lazy thinking that we're in the first half of the recovery already.
If by recovery you mean, coma, and by second-half, you mean rigor mortis.
--bh
Gas at over $4 looks like a real prospect. Of course the demand destruction will in the medium term result in a bite-the-speculator-in-the-ass scenario. Expect a real crash in oil prices with the resulting fall out. Perhaps that'll be the next bail out
Time to buy a German turbo diesel !
So maybe China is "hyperinflating" the dollar by putting more and more money into commodities. Really sneaky bastard move
"USD has so much further to go. Gas so much higher. Wages so much to stagnate. So many more jobs to lose."
Agreed, agreed, agreed, agreed.
The world is just sick of our corruption after we have denigrated others over theirs. They are sick of our "holier than thou" attitude.
This is what is called "payback time"
And, what would you suggest to them, purchasing more Treasuries? They're swamped with Treasuries and getting killed holding them.
The real bond blow up is when those primary dealers start losing money on the turn.
"Gas at over $4 looks like a real prospect. "
I think gas over $4 is in the books, probably by July 31.
The US population is now in the Theatre of The Crazy, some will make it out while others will not.
Dawg-
didn't that happen with last week's auctions? Recall something along those lines....may be I'm just thinking it as opposed to observing it.
Ciao
MS
Tell me how this will work again when the 10 year bond is ylding 6%?
and now zombie malls
That gives me a great idea for a horror movie!!
pretty soon the Fed will step in and buy some of those new 10 years to show a sign of strength.
but of course that is not "monetizing the debt" because he is buying on the open market, not at the auction.
The continuing oil spike will force an airline bankruptcy - maybe multiple. Airline bailout.
Rob Dawg,
IIRC, accounting rules allow banks to always carry treasuies at par. They never have to book mark to market loses on treasuries (or a lot of other crap nowadays too thanks to mark to model forebearance).
"The continuing oil spike will force an airline bankruptcy - maybe multiple. Airline bailout. "
Or a duopoly in many markets of the strongest remaining lines; which would mean no competition at all.
Long oil seems the way to go unless Benny has the cajones to pull back on QE. But then the equity market takes a dive.
Decisions, decisions.
If the federal government buys a couple of airlines, a major trucking company, maybe a railroad, they could really go back to being "General Motors."
I wonder if the mortgage industry is shutting down today with the 10Y spike (like it did a couple weeks ago).
Courage will be in short supply for mortgage lenders.
MS,
I believe you are right, there was resistance to secondary placements because everyone knew rates were headed higher.
Angry Saver,
They aren't going to give them away but holding them isn't a viable strategy. Primary dealers are in the business of buying/selling them not collecting them.
[damn! pigged again!]
High gas prices will tank Motor home prices! Let ride!
We should all be like the Chinese students who laughed at Geithner.
If I see this lie repeated one more time, you will be sorry. Didn't you get the memo from Obama? They weren't laughing at Geithner, they were laughing with him- he told a knock-knock joke.
its amazing Krugman had one dinner with Obama and has pretty much become a shill for the administration.
Either (a) they showed him some compromising photographs or (b) all he wanted was his ego stroked.
Krugman is a cheap whore.
O's a Chicago politician... he made Krugman an offer he couldn't refuse !
I can picture it now.... "See that secret service guy there ? He's call Vito, wouldn't it be tragic if for example, speaking completely hypothetically, if Vito's firearm were to say.. accidentally discharge and shoot you in both knees Mr.Krugman ?"
Either that or O walked up and down the table behind Krugman with a baseball bat talking about team players.
he told a knock-knock joke
Knock, knock.
Hu's there?
...
'So maybe China is "hyperinflating" the dollar by putting more and more money into commodities.'
I suggested it the other day. The Bernake ball twist. Short/sell treasuries forcing him to defend, and use the money to buy commodities. Of course, China's well positioned to do that. Not sure they'd want dollars at that point though.