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Old 05-28-2009, 03:10 PM
 
Location: New Jersey
4,180 posts, read 5,061,593 times
Reputation: 4233

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from Yahoo News:

today in the U.S. bond market, benchmark 10-year notes bounced 24/32 higher for a yield of 3.64%, 10 basis points lower on the day, after an auction of 7-year Treasury notes.

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Old 05-28-2009, 04:22 PM
 
Location: Stewartsville, NJ
7,577 posts, read 22,606,032 times
Reputation: 1260
Quote:
Originally Posted by gagaliya View Post
wtf are you talking about....it makes zero sense.
QUOTE: "...wow, i think the mortgage rates will start to go very soon. This is very bad."

It makes perfect sense...

Chase..my mortgage company... closed 2 weeks ago at 4.87% interest rate.. today Chase is offering a 7.19% interest rate.... what doesn't make sense?

bankrate.com

30 yr fixed mtg
Chase Bank

7.19 1 0.250/0.000 7.125 $669 N/A 60 $1,112

Last edited by wileynj; 05-28-2009 at 04:31 PM..
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Old 05-28-2009, 04:42 PM
 
Location: New Jersey
11,345 posts, read 16,702,711 times
Reputation: 13368
Quote:
Originally Posted by wileynj View Post
QUOTE: "...wow, i think the mortgage rates will start to go very soon. This is very bad."

It makes perfect sense...

Chase..my mortgage company... closed 2 weeks ago at 4.87% interest rate.. today Chase is offering a 7.19% interest rate.... what doesn't make sense?

bankrate.com

30 yr fixed mtg
Chase Bank

7.19 1 0.250/0.000 7.125 $669 N/A 60 $1,112
...and my bank is offering 5.625% for 30 years fixed.

Since doesn't make sense for Chase to be that high.
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Old 05-28-2009, 07:34 PM
 
Location: NJ
31,771 posts, read 40,693,520 times
Reputation: 24590
Quote:
Originally Posted by sholden View Post
In case you haven't noticed I live in NJ near a lot of big cities. Clearly I'm not planning to fend of the zombies with a shotgun from my basement - if I was I'd be in Kansas...

I'm am not however, investing in US treasuries...
the kind of zombies that will come out when the crap hits the fan are the ones that are in the big cities. i believe in zimbabwe they are called war veterans.
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Old 05-28-2009, 07:52 PM
 
Location: Ridgewood NJ
592 posts, read 2,187,757 times
Reputation: 316
Quote:
Originally Posted by wileynj View Post
QUOTE: "...wow, i think the mortgage rates will start to go very soon. This is very bad."

It makes perfect sense...

Chase..my mortgage company... closed 2 weeks ago at 4.87% interest rate.. today Chase is offering a 7.19% interest rate.... what doesn't make sense?

bankrate.com

30 yr fixed mtg
Chase Bank

7.19 1 0.250/0.000 7.125 $669 N/A 60 $1,112
no it doesnt, if the interest rate went from 4.87 to 7.19 in 2 weeks, it means the dollar just crashed.

so please put down the crackpipe.
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Old 05-28-2009, 08:10 PM
 
Location: Montgomery County, PA
2,771 posts, read 6,275,311 times
Reputation: 606
Quote:
Originally Posted by gagaliya View Post
no it doesnt, if the interest rate went from 4.87 to 7.19 in 2 weeks, it means the dollar just crashed.

so please put down the crackpipe.
I read today that mortgages moved by 45bp at the same time that the bonds jumped by 12bp. That's a huge jump.

The mortgage market is going to take a beating sooner, rather than later. Apparently traders were piling into treasuries because they were concerned about the possibility of mass refinancings, now that they're letting go of those positions, the bond market is weakening and that in turn is going to push mortgage rates higher still. It looks like the first sign that the government are no longer able to keep long term borrowing rates down.

Sure, they can backstop housing loans, but that only pushes 30Y bond yields even higher, which puts a rising floor under borrowing rates.
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Old 05-29-2009, 05:45 AM
 
505 posts, read 1,762,488 times
Reputation: 208
This is very interesting. It seems as though the Fed can no longer justify its insane spending spree with the line that "there are no indications of inflation." Well, here they are, and given the lag of inflation, its only going to go up from here.

The Fed has injected millions of dollars into the marketplace, of course this was coming. This disaster of this is that through no fault of its own, the market is trying to undo everything the government has done to try to instill confidence in the consumer. If rates rise to 12%, home prices will PLUMMET, destroying any consumer confidence and we could very well slip back down.

You could have an entire segment of buyers, who purchased between 2003 and 2008 literally trapped in their homes, stuck with high purchase prices and low rates. While the monthly payment will be similar to a house with a high interest rate and lower sale price, the beauty of the latter is you can refinance when the interest rates fall.

I am not going to lie, I am a little concerned given the fact that I am in that segment I mentioned (03-08). Do I hope we recover sooner rather than later? Sure. But I am also not going to ignore the writing on the wall that hints of the possibility that in a couple of years the market value of my house could be half of what I paid for it, and could stay there for the next 15 years.

As for the person who mentioned hyperinflation. If we get that far, forget about the housing market, forget about the stock market, forget about everything, at that point, it's game over.

If this is inappropriate, please remove, but below is a link to a blog that is run by a Rutgers economics professor, Farrokh Langdana. I took his macro course and I think he has an excellent way to explain complex economic topics in relatively simple terms. If anyone is interested in reading up, check it out. Note, I have no affiliation with this site.

Macrobuddies - Economic Insight and Analysis
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Old 05-29-2009, 06:09 AM
 
Location: Stewartsville, NJ
7,577 posts, read 22,606,032 times
Reputation: 1260
Quote:
Originally Posted by MPBsr View Post
...and my bank is offering 5.625% for 30 years fixed.

Since doesn't make sense for Chase to be that high.
Could mean that Chase would rather not give out mortgages at the moment unless it's extremely profitable for them?? I was just using my "specific" mortgage company. Others are still below 6%.
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Old 05-29-2009, 06:10 AM
 
Location: Stewartsville, NJ
7,577 posts, read 22,606,032 times
Reputation: 1260
Quote:
Originally Posted by gagaliya View Post
no it doesnt, if the interest rate went from 4.87 to 7.19 in 2 weeks, it means the dollar just crashed.

so please put down the crackpipe.
Just stating a fact....one bank...my bank.
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Old 05-29-2009, 07:26 AM
 
Location: New Jersey
4,180 posts, read 5,061,593 times
Reputation: 4233
the banks are fighting Obama's attempts to regulate their oligarchy:

Banks Seek Role in Bid to Overhaul Derivatives - WSJ.com
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