Home › Forums › Financial Markets/Economics › Treasury Price Bubble???
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February 6, 2008 at 11:50 AM #11726February 6, 2008 at 4:17 PM #148899
Duck
ParticipantI’ll follow the advice of the Pimco guy at the end of the story. They are the authority on bonds and have said since last spring that the Fed Funds rate was headed towards 3% or lower. The Fed and Washington DC in general are all over housing right now and will do whatever it takes to keep mortgage rates low until the majority of subprime mortgages get refi’d or froze and the inventory overhang of new homes gets worked through the system. The easiest solution is low mortgage rates. It might take another 2 or 3 years, but you can be sure this is the #1 economic concern and despite the overall incompetency of our government, when they set their minds to solving a single problem without partisanship, it usually gets done.
February 6, 2008 at 4:17 PM #149255Duck
ParticipantI’ll follow the advice of the Pimco guy at the end of the story. They are the authority on bonds and have said since last spring that the Fed Funds rate was headed towards 3% or lower. The Fed and Washington DC in general are all over housing right now and will do whatever it takes to keep mortgage rates low until the majority of subprime mortgages get refi’d or froze and the inventory overhang of new homes gets worked through the system. The easiest solution is low mortgage rates. It might take another 2 or 3 years, but you can be sure this is the #1 economic concern and despite the overall incompetency of our government, when they set their minds to solving a single problem without partisanship, it usually gets done.
February 6, 2008 at 4:17 PM #149184Duck
ParticipantI’ll follow the advice of the Pimco guy at the end of the story. They are the authority on bonds and have said since last spring that the Fed Funds rate was headed towards 3% or lower. The Fed and Washington DC in general are all over housing right now and will do whatever it takes to keep mortgage rates low until the majority of subprime mortgages get refi’d or froze and the inventory overhang of new homes gets worked through the system. The easiest solution is low mortgage rates. It might take another 2 or 3 years, but you can be sure this is the #1 economic concern and despite the overall incompetency of our government, when they set their minds to solving a single problem without partisanship, it usually gets done.
February 6, 2008 at 4:17 PM #149151Duck
ParticipantI’ll follow the advice of the Pimco guy at the end of the story. They are the authority on bonds and have said since last spring that the Fed Funds rate was headed towards 3% or lower. The Fed and Washington DC in general are all over housing right now and will do whatever it takes to keep mortgage rates low until the majority of subprime mortgages get refi’d or froze and the inventory overhang of new homes gets worked through the system. The easiest solution is low mortgage rates. It might take another 2 or 3 years, but you can be sure this is the #1 economic concern and despite the overall incompetency of our government, when they set their minds to solving a single problem without partisanship, it usually gets done.
February 6, 2008 at 4:17 PM #149166Duck
ParticipantI’ll follow the advice of the Pimco guy at the end of the story. They are the authority on bonds and have said since last spring that the Fed Funds rate was headed towards 3% or lower. The Fed and Washington DC in general are all over housing right now and will do whatever it takes to keep mortgage rates low until the majority of subprime mortgages get refi’d or froze and the inventory overhang of new homes gets worked through the system. The easiest solution is low mortgage rates. It might take another 2 or 3 years, but you can be sure this is the #1 economic concern and despite the overall incompetency of our government, when they set their minds to solving a single problem without partisanship, it usually gets done.
February 6, 2008 at 4:46 PM #149194DWCAP
ParticipantDuck,
Actually I agree with you. I dont think the Gov is gonna let this one get away. If they think people vote with their checkbooks, just wait till the middle class starts loosing houses in mass numbers.
I actually posted this thinking there would be more of a response. PIMCO may be right, but stories like this tend to get people talking and even small changes in perception can move markets.
I really think the FED is gonna squash rates until housing heals, the question is, what kinda price do we pay 3-5 or maybe even 10 years from now? Inflation builds, returns are worse, rates are raised, and housing is hurting again. A return to the 6.5% rates we were paying 1 year ago would be a knife in the heart, so how are we ever gonna get outa this mess? Remember inflation only really counts if it is wage inflation, and we havnt been seein too much of that lately.February 6, 2008 at 4:46 PM #149265DWCAP
ParticipantDuck,
Actually I agree with you. I dont think the Gov is gonna let this one get away. If they think people vote with their checkbooks, just wait till the middle class starts loosing houses in mass numbers.
I actually posted this thinking there would be more of a response. PIMCO may be right, but stories like this tend to get people talking and even small changes in perception can move markets.
I really think the FED is gonna squash rates until housing heals, the question is, what kinda price do we pay 3-5 or maybe even 10 years from now? Inflation builds, returns are worse, rates are raised, and housing is hurting again. A return to the 6.5% rates we were paying 1 year ago would be a knife in the heart, so how are we ever gonna get outa this mess? Remember inflation only really counts if it is wage inflation, and we havnt been seein too much of that lately.February 6, 2008 at 4:46 PM #149176DWCAP
ParticipantDuck,
Actually I agree with you. I dont think the Gov is gonna let this one get away. If they think people vote with their checkbooks, just wait till the middle class starts loosing houses in mass numbers.
I actually posted this thinking there would be more of a response. PIMCO may be right, but stories like this tend to get people talking and even small changes in perception can move markets.
I really think the FED is gonna squash rates until housing heals, the question is, what kinda price do we pay 3-5 or maybe even 10 years from now? Inflation builds, returns are worse, rates are raised, and housing is hurting again. A return to the 6.5% rates we were paying 1 year ago would be a knife in the heart, so how are we ever gonna get outa this mess? Remember inflation only really counts if it is wage inflation, and we havnt been seein too much of that lately.February 6, 2008 at 4:46 PM #149162DWCAP
ParticipantDuck,
Actually I agree with you. I dont think the Gov is gonna let this one get away. If they think people vote with their checkbooks, just wait till the middle class starts loosing houses in mass numbers.
I actually posted this thinking there would be more of a response. PIMCO may be right, but stories like this tend to get people talking and even small changes in perception can move markets.
I really think the FED is gonna squash rates until housing heals, the question is, what kinda price do we pay 3-5 or maybe even 10 years from now? Inflation builds, returns are worse, rates are raised, and housing is hurting again. A return to the 6.5% rates we were paying 1 year ago would be a knife in the heart, so how are we ever gonna get outa this mess? Remember inflation only really counts if it is wage inflation, and we havnt been seein too much of that lately.February 6, 2008 at 4:46 PM #148909DWCAP
ParticipantDuck,
Actually I agree with you. I dont think the Gov is gonna let this one get away. If they think people vote with their checkbooks, just wait till the middle class starts loosing houses in mass numbers.
I actually posted this thinking there would be more of a response. PIMCO may be right, but stories like this tend to get people talking and even small changes in perception can move markets.
I really think the FED is gonna squash rates until housing heals, the question is, what kinda price do we pay 3-5 or maybe even 10 years from now? Inflation builds, returns are worse, rates are raised, and housing is hurting again. A return to the 6.5% rates we were paying 1 year ago would be a knife in the heart, so how are we ever gonna get outa this mess? Remember inflation only really counts if it is wage inflation, and we havnt been seein too much of that lately.February 6, 2008 at 7:33 PM #149257capeman
ParticipantYou guys have to realize that the Fed. and Gov’t don’t set interest rates especially mortgage rates. Those are based on the bond market (10 yr) and if the bond market doesn’t like what the Fed is doing and treasuries rise then the Fed loses it’s power. Liquidity is being thrown into the market as commercial credit is drying up. If that locks then the bond rates explode as will mortgage rates. We could very well be close to that point right now.
February 6, 2008 at 7:33 PM #149004capeman
ParticipantYou guys have to realize that the Fed. and Gov’t don’t set interest rates especially mortgage rates. Those are based on the bond market (10 yr) and if the bond market doesn’t like what the Fed is doing and treasuries rise then the Fed loses it’s power. Liquidity is being thrown into the market as commercial credit is drying up. If that locks then the bond rates explode as will mortgage rates. We could very well be close to that point right now.
February 6, 2008 at 7:33 PM #149271capeman
ParticipantYou guys have to realize that the Fed. and Gov’t don’t set interest rates especially mortgage rates. Those are based on the bond market (10 yr) and if the bond market doesn’t like what the Fed is doing and treasuries rise then the Fed loses it’s power. Liquidity is being thrown into the market as commercial credit is drying up. If that locks then the bond rates explode as will mortgage rates. We could very well be close to that point right now.
February 6, 2008 at 7:33 PM #149288capeman
ParticipantYou guys have to realize that the Fed. and Gov’t don’t set interest rates especially mortgage rates. Those are based on the bond market (10 yr) and if the bond market doesn’t like what the Fed is doing and treasuries rise then the Fed loses it’s power. Liquidity is being thrown into the market as commercial credit is drying up. If that locks then the bond rates explode as will mortgage rates. We could very well be close to that point right now.
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