Tuesday, December 7, 2010

Bond Market Doesn't Like Tax Cuts: Mortgage Rates Spike

Bond Market Revolt

The US Treasury bond market reaction to the Fed’s QE policies and to this disgrace of a budget proposal was swift and severe. I have a picture of it for you right here.

That is what the bond market thinks of Ben Bernanke’s plan to spur inflation but hold down treasury yields.

The ovals show today’s bond-market reaction to the budget deficit that Bernanke will no doubt monetize as part of QE III and QE IV when this round of “quantitative easing” blows up in his face.

Conforming Mortgages Went From 4.00% to 4.50% in the last few weeks. This is not helping housing or the economy at all.
Jumbo Mortgage Rates have moved from 5.00% to 5.375% in the last two weeks in particular.
Interest rates are ultra-low by historical standards by any measure but we can clearly see what will happen if enormous deficits, high unemployment and a weak dollar are not addressed soon by the FED, Congress and ultimately by the american people.

Monday, December 6, 2010

How the Mortgage Bubble Really Topped Out.

Part of the trillions in bad loans were the option ARMs(pick-a-pay) This nice FED produced map brings a lot of clarity via time series spread of complex mortgages shown in a recent Chicago Fed publication. Nothing like a good real estate crash to bring things to a halt CLICK IMAGE FOR LARGER VIEW:

Ben Bernanke 60 Minute Interview: Worth a View

Part 1

Part Duex