Mortgage index FELL 1.8% last week on IMPROVING mortgage rates, so much for excuses to taper, RAISE mortgage rates, and kill the fledgling housing recovery, which has 27% to go to make PARITY with 2007 pricing, which turns all those 100 TRILLION in derivatives into sushi.
Fed blather at the membership level, the argument is supposed to temper the market as along as, and I agree with Moses here, the unwashed and brainless buy that premise. Unfortunately, the market is made up of the unwashed and brainless, so you watch that herd and the way in which it stampedes, not whether they have a clue as to whether the Fed guards tell the truth or not.
Tomorrow first hard eco data of the week, but silver took a shellacking today, as if QE was going away in Dec. Yeah, Dec 2017.
The data don't support tapering. Mortgages would rise, real estate sales would flounder, then existing home prices would dive to make up the difference represented by the increased costs to carry a loan, bond market loses half its demand, bonds would crash, and equities emptied in sympathy to "make up " for "losers".
This is fourth grade math, and it appears non of the financial analysts passed anything but bulltschitt 101.
I mean, that's a couple million shares off the float. Who has been keeping score?
Who knows? A special doesn't appear likely. I'll be happy with something around 30 cents, which is about 15%. That and some option premium garners about 22% a year.
85 billion a month, or a TRILLION a year, is small price to pay to continue reflating the real estate market--we need another two to three years of double digit growth just to get back to August 2006 prices.
If mortgage rates go up, cash flow to carry a loan stays stagnant (with wages stagnant), the buyers can't afford the homes, they go down in price to meet the budget. YOU CAN LOP A THIRD OFF THE PRICE OF A HOUSE if mortgage rates go to 6%, and you can carve 5-7% of GDP to service the same national debt at higher interest rates.
That doesn't say the Fed can't time the market, the Fed has already PROVED it can't time the market, Bernanke was shouting don't worry be happy just before the market collapsed in November 2007.
CYS is about to take a hit, as will all MREITs when this is "announced", and minor Fed officials are shooting off their mouths touting sooner than later, when the unemployment numbers are still 7.3%, and built on jobs that are little more than minimum wage, not the jobs of prosperity, not the robust growth we need to climb past the morass banks got us into starting under the Clinton administration.
What a mess!
XMAS anticipatory sales will be talked to early Dec. The next wave should carry SWHC to $14.62, but we're fighting rumors of tapering and some of the lessor Fed chiefs giving credence to the lunacy about three years too early (all those jobs are low end retail and close to minimum wage) is not helping.
The market did not vote "gee the economy must be getting better" on Friday. It voted for "the figures are hiding the poor quality of the rebound" and continued bond buying to boost the real estate market out of the red, where it flounders 27% below peak prices August 2006. That means home prices are still 27% below that peak, or, if you like, 27% (coincidentally) off what prices would have been at 3% a year since 2000. Do the math, we have three years of 6-8% per year "reflation" to go.
Another Fed chief opens his mouth on a slow news day to clamor "the market should be preparing for the taper". Why the O(&)(&*(& do these people insist on putting a pin in the balloon of the market and the real estate recovery only halfway finished? And, how do you prepare? Go out and jog?
Buy puts and inverse ETF? 3/4 the market is not sophisticated to use those hedging tools, even tho they are 200 years old.
Unbelievable. Silver is down another 2/3%. Market is scheduled ANOTHER selloff BEFORE that idiot opened his mouth.
No matter how inflationary and stupid, one thing Bernookie was incapable of doing, is closing ranks amongst his own "TEA PARTY" constituents. Wow, this is really dumb, IF you believe the ten year rate, needs to stay low, to keep real estate reflating, now at August 2004 prices, leaving at least half those who bought between that date and end of 2006 gurgling underwater, and all those derivatives still threatening the world $100 TRILLION deep.
Go to posters name and click and a topic next to my posts will list all the posts under that posters name.
Next to the date of a specific post in that list, is a hidden icon that says flag. Click on it, you get ignore or report abuse. Click report abuse and a paragraph indicating you've been successful reporting that post will come up.
If you go into the blurb paragraph, it invites you to explain your position further by clicking "here". Do so, you get a chance to list your reasons. Go to "other" and click it, and you get small box to write something like "constant anti semitism" or whatever. Yahoo WILL investigate.
All you need to know.
You figure the best investment, that's all you need to know.
No wonder the disproportionate number of bartenders hired in Sept Oct. All those watering holes need to handle all the extra traffic of the unemployed.