For the past 2.5 years, the Fed has run two rounds of rate stimulus known as quantitative easing (QE), which is bond buying to drive prices up and rates down. QE2 ends June 30, so here’s a chart recapping 30yr fixed rates from crisis peak to now. It’s labeled to show how QE1, QE2, and
Japan
The mortgage mess and great recession here in the U.S. led to a great deal of additional banking regulation. Regulations are made by people who usually do not have enough awareness of long-term consequences, so nobody really knows how these regulations will impact banking, the mortgage business, and the economy. And on an international scale,
The mortgage mess and great recession here in the U.S. led to a great deal of additional banking regulation. Regulations are made by people who usually do not have enough awareness of long-term consequences, so nobody really knows how these regulations will impact banking, the mortgage business, and the economy. And on an international scale,
Do boom and bust cycles in real estate only happen in the United States? Nope. Take a look at this Freddie Mac table of global home prices from 1996-2009. It’s from a piece Freddie’s chief economist did in February, but still relevant now. Zillow is offering borrowers $1000 Lowe’s gift cards if they contact a
Stocks are down today (S&P 500 -12) and bonds are up (FNMA 30yr 4% coupon +53 basis points), which will push rates down if if the bond rally holds. Stocks were stuck in a flat trading range for the past week then today broke lower, so bonds are benefitting. Part of the flight to safer
Rates ended last week up .125% after being even for three weeks. Poor new and existing home sales, rattled consumers, and the Portugal flare-up in Europe’s debt crisis last week would normally cause rates to drop as mortgage bonds rally. But bonds lost ground as investors moved to stocks, pushing the S&P 500 up 2.7%
Liyba’s civil war has been buried by Japan’s post-tsunami nuclear disaster and a huge week for U.S. economic news. But as U.S. news dies down today, the UN announced a no-fly zone and authorized use of air attacks against Libya to protect pro-democracy citizens who’ve been bombed by Muammar Gaddafi’s government for the past month
Liyba’s civil war has been buried by Japan’s post-tsunami nuclear disaster and a huge week for U.S. economic news. But as U.S. news dies down today, the UN announced a no-fly zone and authorized use of air attacks against Libya to protect pro-democracy citizens who’ve been bombed by Muammar Gaddafi’s government for the past month
The nuclear meltdown situation in Japan is no less dire today as helicopters and water cannons are now being used to cool fuel rods and prevent spreading of radioactive material, but after utter market panic yesterday caused stocks and rates to drop, they’ve now reversed course almost entirely (Dow +166, S&P +21, and FNMA 30yr
Thanks to JH for sending this link from Kottke, a 1989 story by Michael Lewis titled How A Tokyo Earthquake Could Devastate Wall Street & The Global Economy.
Thanks to JH for sending this link from Kottke, a 1989 story by Michael Lewis titled How A Tokyo Earthquake Could Devastate Wall Street & The Global Economy.
Stocks and rates are down midway through trading day following lots of market data. February housing starts, which measure new homes construction, were down 22.5% since last month, the worst monthly drop in 27 years. The February Producer Price Index (PPI), which measures business inflation, was up 1.6% since last month and has spiked 5.6%
The earthquake in Japan is no laughing matter. Just ask Aflac – it fired comedian Gilbert Gottfried as the voice of its duck after a series of Twitter jokes about the earthquake in Japan, Aflac’s most important market. World stock markets are hitting 2 1/2 month lows today, and Treasury yields have dropped due to
Japanese stocks crashed last night, and world stock markets followed the same direction, though less extreme. The Nikkei was down 6% Monday and 11% Tuesday as the quake, tsunami, and resulting nuclear catastrophe in Japan plays out. The Dow and S&P 500 are currently down about 1.7% each (down -212 and -22 respectively). U.S. Treasury
What is the bond market focused on this week? One item that has really turned some heads recently was the letter from PIMCO’s Bill Gross, stating that its Total Return Fund sold all of its Treasury holdings. Mr. Gross has been right and wrong in the past. One quote said, “PIMCO’s not sticking around to
As predicted, rates ended last week even after big volatility caused +/-.3% intraday rate swings. Following the devastating Japanese earthquake and tsunami, mortgage bonds surprisingly weren’t Friday’s safety buy and instead sold (rates up) for four main reasons: (1) profit taking after bonds rallied huge Thursday (rates down) on a very successful 30yr Treasury auction,
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