Krugman: Mortgage Rates Still Too High
Despite having come down considerably in recent weeks, mortgage rates are still too high, says Paul Krugman in a recent blog post. Why too high? Well, the spread between 30-year mortgages and 10-year Treasurys historically is around 150 basis points. And now? About 300 bips. Krugman’s prescription: “Declare that Fannie and Freddie are backed by…
Despite having come down considerably in recent weeks, mortgage rates are still too high, says Paul Krugman in a recent blog post. Why too high? Well, the spread between 30-year mortgages and 10-year Treasurys historically is around 150 basis points. And now? About 300 bips. Krugman’s prescription: “Declare that Fannie and Freddie are backed by full faith and credit, and if that doesn’t work, have the Treasury borrow on their behalf.”
Who’s Lunus???
Thanks for the nice cut and past job today.
I been reading some of the comments here and quite frankly you idiots are nuts!
There will be a “feel good” period when Obama take office. This should last until May and when he does his FDR trick the Bond market is going to implode! Plus the Madoff thing is getting some serious traction in the financial world. Investor confidence is shot and I can’t see where the “new” money is coming from.
The sad thing is that you can’t see we are in a Depression. The Deflation monster is running wild and asset prices are crashing!
Holiday Sales Drop to Force Bankruptcies, Closings
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajAqMbszJmNY&refer=home
Dec. 29 (Bloomberg) — U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.
This will the worse Xmas shopping season in history until Xmas 2009!
“We’ll be going from a Dickens-esque worst of times this December to the best of times in future Decembers because we’ll rationalize out all the redundant retailers and retail space in shopping centers,†Flickinger said.
Commercial Real Estate is D.O.A!
Downturn Ends Building Boom in New York
http://www.nytimes.com/2008/12/27/nyregion/27developers.html?ref=business
Nearly $5 billion in development projects in New York City have been delayed or canceled because of the economic crisis, an extraordinary body blow to an industry that last year provided 130,000 unionized jobs, according to numbers tracked by a local trade group.
Coney Island, Atlantic Yards and City Point are finished!!!!
So Asshats keep dreaming! You will be like Lunus in the Pumpkin Patch…
The What
Someday this war is gonna end…
there’s going to be a massive inflation explosion at some point in the next 2 years – no one with more than a third of their brain matter can sanely disagree with that observation.
what will be interesting to see if if the govt continues to hold mortgage rates down (by buying mbs) once inflation picks up. if they do, then real estate suddenly becomes a killer inflation hedge – which could bring a lot of cash back into that asset class.
“prices are way higher than the rents”
And rents are falling too. That’s one of the reasons why the brownstone “correction” is going to be far nastier than anyone in this thread anticipates.
“Now just to review for you Ferrousballs that tax increase for less than 8% of the American people will be at the same level as when Bill Clinton was president…remember the peace and prosperity of those 8 years?.. ”
Pierre;
So, are you applying as a spokeman for the Clintons?
Peace: I seem to remember a series of esclating attacks on American targets (the ’93 WTC attacks, the USS Cole, two embassies in Africa) by Al Queada that went unheeded. Is your definition of “peace” that of ignoring a gathering storm?
Prosperity: Have you forgotten the dot-com implosion of the 2000? This is the same implosion which caused Alan Greenspan to dramatically lower interest rates, which started to inflate the housing bubble?
You speak of cable TV shows, but it seems to me that you are engaging in the same antics, by neatly spinning the facts to suit your side.
By the way, will you please stop with the “we” statements. Who are you speaking for when you say “we”?
I just see good value on houses selling for 300 grand and getting great rents..
Don’t hold your breath.
“So, has the DOW bottomed out, or will it go lower? How low will it go? I’m still thinking it’s going to hit 6500, but I’m obviously no expert.”
Definitely time to buy stocks if you’re making calls on a move lower.
Right now the market if it stays above 857 on the sp 500 it looks ok. If it breaks that than its the 818 level on the sp 500 and next the 750 level which if broken will lead to who knows… I can’t read the market so I am looking to purchase assets which have tangible value. Homes which sell at prices lower than rents are a great bargain considering your home will always have some value. But price is important and I am not predicting a housing upturn. I just see good value on houses selling for 300 grand and getting great rents..
long dated treasury rates are noise now. govt needs to buy more mbs so that someone else will do the same at some point before 2050.