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#1 OEXCHAOS

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Posted 03 January 2009 - 11:42 AM

https://www.wellsfar...mortgage/rates/

Rates are rising. That takes away stimulus.

That doesn't help the case and folks may start worrying about that.

Also, we got a best fade weekly signal. It is a blunt tool, but we're likely to get a sell off soon. Maybe a two leg correction from higher. Hard to tell.

Of course, a lot has turned up, so we ought to respect that, but I'm cautious in here.

Mark
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#2 hedgehawk

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Posted 03 January 2009 - 11:47 AM

https://www.wellsfar...mortgage/rates/

Rates are rising. That takes away stimulus.

That doesn't help the case and folks may start worrying about that.

Also, we got a best fade weekly signal. It is a blunt tool, but we're likely to get a sell off soon. Maybe a two leg correction from higher. Hard to tell.

Of course, a lot has turned up, so we ought to respect that, but I'm cautious in here.

Mark


Mark, the rates look like they are at or near their local lows to me.........at US Bank.


http://www.usbank.co...erest_rates.cfm

#3 U.F.O.

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Posted 03 January 2009 - 12:35 PM

I'd consider the recent spike up in mortgage rates as a correction before the real business at hand gets underway. The FED has committed to buy some 500+ billion dollars of mortgage-backed securities in the 1st half of 2009, starting in the next couple of weeks. This will have a profound effect on interest rates charged on newly originated loans. Their purchases will be to the tune of approximately 1/2 of all monthly mortgage originations, which is an incredibly large amount. If I was considering the question of when to refi I'd wait a few weeks. IMHO you'll be able to get a 4.00% (or lower) 30yr fixed loan before the snow melts from your driveway.

U.F.O.

Edited by U.F.O., 03 January 2009 - 12:37 PM.

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#4 OEXCHAOS

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Posted 03 January 2009 - 12:36 PM

I may be ahead of the curve here, I think. Wells has been about the best at current rates (except for the skinny from Don). Then again, Third Fed is at 5% which is about as low as they've been so maybe not. Hard to tell. Let's keep an eye on this from a couple different angles. I know things are volatile. Don? Any updates or trends that you're seeing? Mark
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#5 Data

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Posted 03 January 2009 - 02:03 PM

US Bank is in the Midwest. They're less affected by the change on the 1st.

#6 humble1

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Posted 03 January 2009 - 02:10 PM

that is a positive, not a negative, IF there is any significant rise at all. UFO's point about the $500 billion is powerful. also remember: at the late jan two day FED meeting the quantitative approach to monetary policy will be formalized. that means the FED will also be buying "long term" treasuries. we are talking here of outright purchases of at least the bench mark ten year, MASSIVE purchases. think what that means: don't look for a reason to be bearish at the start of this magnificent LIFT-OFF!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Edited by humble1, 03 January 2009 - 02:11 PM.


#7 Data

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Posted 03 January 2009 - 02:30 PM

the purchase of 500 billion dollars of mortgage-backed securities is the quantitative easing. probably, much of it was in foreclosure before the government stopped proceedings last month. nobody is likely making payment on many of these loans. the Fed's in a rush as the foreclosure freeze on these loans is going to be lifted in early January.

Edited by Data, 03 January 2009 - 02:31 PM.


#8 U.F.O.

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Posted 03 January 2009 - 02:31 PM

I agree 100% h1. For the ST/IT I'm going to be looking for excuses to buy dips. IYB thinks we're in the last stage of this bear market rally and he may be correct. If so, what is unknown is how much time and distance remain. It may be that we do have 2-3 weeks and $SPX $1,007 ahead of us, certainly worth exploring on the longside. The 2002 bottom was so complex with a couple of deep retests that many of us are convinced that our current Nov. low has to be retested likewise or it's not legitimate. This may not be the case. I'm gonna try to swingtrade this move taking what my indicators will give me and right now I don't see the risk/reward favoring the shortside.

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#9 humble1

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Posted 03 January 2009 - 03:04 PM

at any rate, i hope it helps toll brothers, sponsors of saturday afternoon at the met. "la boheme" is live now, third act. mimi is starting to cough and the saddest cord in music will soon play and i need to find a place to go and sob quietly to myself.

Edited by humble1, 03 January 2009 - 03:05 PM.


#10 IYB

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Posted 03 January 2009 - 03:06 PM

I'd consider the recent spike up in mortgage rates as a correction before the real business at hand gets underway. The FED has committed to buy some 500+ billion dollars of mortgage-backed securities in the 1st half of 2009, starting in the next couple of weeks. This will have a profound effect on interest rates charged on newly originated loans. Their purchases will be to the tune of approximately 1/2 of all monthly mortgage originations, which is an incredibly large amount. If I was considering the question of when to refi I'd wait a few weeks. IMHO you'll be able to get a 4.00% (or lower) 30yr fixed loan before the snow melts from your driveway.

U.F.O.

UFO- this is the kind of hard data I've been searching for- regarding what and when the Fed will actually act, in real terms, in the mortgage markets and in what dollar amounts. Please pass along any reports you see, and/or any links that will help us on this.

I absolutely agree that when they come in, this will dramatically effect the rates in a very positive way- and that UFO is correct about the 4% area- if they act now, before rates rise too much. This is because the "traditional" risk premium on 30-year mortgages versus the 10-year TSY (which is the bench comparitive instrument because most mortgages have an "actual life" of less than 10 years) has been about 120 basis points, and right now, the absense of this promised intervention is keeping that spread at around 270 (plus or minus) basis points.

Thus, again, if they were to come in right now, in earnest.....we could see rates (as UFO says) at or below 4%! Overnight! And despite all of the spepticism I keep reading here about anecdotal stories of who can't, shouldn't or won't refi, the fact is that the marginal impact from those "others" who can, should and will refi will be massive!

Rates are rising and that concerns me a lot- because if the Fed waits till rates get into the mid 3's before acting in the mortgage markets, they will have squandered this huge opportunity to get half of America refinanced at 4% or less- and the impact this will have on disposable cash in consumers hands.

So, again, it boils down to WHEN the Fed does more than just talk-- and acts. I would love to see that before I wake up on Monday morning- but I have no idea what Ben is planning.

UFO- do you have anything links or articles that give would be helpful on this? Thanks, D
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds