madasiwannabe

GSEs Into Conservatorship: Can Housing Stabilize Now?

Your comments would be right in a perfect world Mr. Carniol. The credit spreads should narrow, but they won't. The 30 year mortgage rate is linked to the 10 year T bill +2.5%, so if the T bill goes up, so does the mortgage rates. T bills usually follow the vix (too much risk in the market drives everyone to stable T bills), but funny thing is they are on their own. There is no confidence in the treasury around the world so no one is buying T bills. Today's actions did exactly what I said it would, T bills rates jumped .2% in asia on the news. That means mortgage rates are back up .2% from Friday's close. Asians are saying the treasury took on too much risk this time. I agree with them. So much for the drop in rates.

What do we do next?