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Tuesday, December 22 2009 |
11:04 EDT |
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- With 30-year mortgage rates now above 5.5% - a level which many predict will petrify new loan apps - Mike Shedlock wonders what Bernanke has planned for an encore: "What now Big Ben? You've already blown over a third of your $1.25T commitment, and all you have to show for it is more garbage on your balance sheet and a locked up refi market."
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This news story has 14 comments:
God, this website has just become a place of bitching and moaning and little to no clear thinking. If rates were low, you would complain the Fed is holding them artificially low. Now rates are rising and you are complaining that they are too high.
The increase in the rise of long term rates is actually a GOOD THING! The lowest long term rates were was back in November-December of 2008. Who wants to go back to those wonderful economic times?
On Jun 11 05:34 PM Machiavelli999 wrote:
> How stupid are you people?? Rates are rising because of DEMAND for
> credit. This is a GOOD thing!
>
> God, this website has just become a place of bitching and moaning
> and little to no clear thinking. If rates were low, you would complain
> the Fed is holding them artificially low. Now rates are rising and
> you are complaining that they are too high.
>
> The increase in the rise of long term rates is actually a GOOD THING!
> The lowest long term rates were was back in November-December of
> 2008. Who wants to go back to those wonderful economic times?
On Jun 11 05:34 PM Machiavelli999 wrote:
> How stupid are you people?? Rates are rising because of DEMAND for
> credit. This is a GOOD thing!
>
> God, this website has just become a place of bitching and moaning
> and little to no clear thinking. If rates were low, you would complain
> the Fed is holding them artificially low. Now rates are rising and
> you are complaining that they are too high.
>
> The increase in the rise of long term rates is actually a GOOD THING!
> The lowest long term rates were was back in November-December of
> 2008. Who wants to go back to those wonderful economic times?
You probably trade equities.
On Jun 11 05:34 PM Machiavelli999 wrote:
> How stupid are you people?? Rates are rising because of DEMAND for
> credit. This is a GOOD thing!
>
> God, this website has just become a place of bitching and moaning
> and little to no clear thinking. If rates were low, you would complain
> the Fed is holding them artificially low. Now rates are rising and
> you are complaining that they are too high.
>
> The increase in the rise of long term rates is actually a GOOD THING!
> The lowest long term rates were was back in November-December of
> 2008. Who wants to go back to those wonderful economic times?
On Jun 11 06:37 PM Illusional Delusion wrote:
> Profitability is definitely not an issue for the banks based on the
> spread so far, but the illiquid housing is not going to get better
> for sure. If attracting more liquidity for housing is the key at
> the inflated housing prices (not that it is not cheap but perhaps
> not that attractive given the oversupply versus price), then yeah,
> Ben's plan backfired obviously.
"inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation." Ben Bernanke,
Nov. 21st 2002 address to the National Economists Club in Washington DC
"Two weeks ago when rates were hovering around 5.5% Mark Hanson commented "Mortgage banks that made unhedged commitments at 4.25-4.75% are now in a position to lose substantial sums of money." Today it's an even bigger loss."
I'd like to think that any mortgage bank that stupid would be allowed to fail. Unless they're Too Big To Fail, of course. They should be hedging even for loans originated now. Completely absurd.
Nice reference, Living4Dividends.
Mish is absolutely right:
"What now Big Ben? You've already blown over a third of your $1.25 trillion commitment and all you have to show for it is more garbage on your balance sheet and a locked up refi market.
One thing is clear, Ben Bernanke and the Fed have lost control of the mortgage market (not that the Fed was ever in control in the first place). They weren't. It was all an illusion."
The rise in rates and gas prices will kill whatever illusory green shoots that had supposedly sprouted.
Good observation and conclusion.
Rates were low because the economy was terrible and people had great fear of a depression. Now, stabilization in the financial sector and economy brings us slightly higher rates.