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.”
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.
Johnny merci encore.
I think the myth of Obama raising taxes on small business owners was appropriately debunked IronBalls. See Joe the Plumber. Fox and Limbaugh aren’t a source of objective, accurate information. Unless you need to score some Oxycontin.
And again, a quick economics primer ’cause I’m bored . . .
Small business owner #1 makes $500,000 but his last hire didn’t add to profitability. Result – no increase in hiring.
Small business owner #2 makes $50,000. but her last hire added $5,000 to profitability. Result – she’ll hire.
In short, marginal net revenue and not personal income drive hiring. And a strong economy drives marginal revenue on aggregate.
Now, back to your original point. Even if the above wasn’t true (it’s a simple but pretty accurate model) giving everyone that makes over $250,000 a tax cut because a small percentage of you are direct employers is akin to spurring the economy by giving everyone in America a hard hat.
Put the money to work. Put the economy to work. Put the people to work. So simple Sarah Palin could almost figure it out.
Johnny just wanted to thank you for that succinct lecture in basic economics. We think our friend ferrousballs will benefit from it the most since he seems to simply espouse and regurgitate that Bill O Reilly nonsense.
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?.. The remaining working population will receive a tax cut that will indeed help people and buttress the disastrous economy Obama is inheriting.
We remember explaining this to you in the past but will repeat: laissez faire trickle down economics is dead!
PS: personally we will see an increase in our taxes but we understand that the sacrifice is needed…plus we’ve abstained from looking @ the paystubs:( 🙂
dave OBAMA can’t , if he does we will see something like the great depression.. Hmmm, I have predicted this all and now I predict this. I am going to solid assets. I am now looking harder than ever to purchase a home. Of course I will only purchase if i can get a great deal thru a short sale. Many of those will be coming to market. If you know how to deal with the brokers and have cash its a good time. Of course find out what the previous price paid on the existing property and offer 50 percent of the last price or lower.
Obama’s not going to raise ANY taxes ANYTIME soon. Wake up.
don’t have to tell me dave, this market is fast and I have taken profits as soon as my charts tell me too. I am thinking about taking profits soon and possibly moving them to silver long term…
ok i see , interesting pick , i think its a winner but we will see how long this current treasury hoarding holds. You never know these cycles or bubbles can last for long periods of time. It is a winner but you will possibly have to hold for a long period of time,
PST is 7-10 Year, TBT >10YR