Barry Habib of GMAC finance was on CNBC
(agreed on greed, which denies the needy in favor of seedy)
Habib points out the FannyMae30 price chart as rolling over, dealing with a critical 20MA that is about to fail
he expects mortgage rates to tick up, in opposition to the rate cut trend underway in the Treasurys
does anyone have a chart for the FannyMae30
he pointed out past precedents and the phenomenon that with extensive stimulus both monetary and fiscal, that higher rates must factor in future inflation expectations
why is the mainstream investment community so ignorant?
I expect the Mortgage Backed Security market to repudiate the Fed policy almost imminently, maybe as late as Christmas
a risk premium must be integrated to account for both delinquencies and defaults, both of which are rising, only accentuated in the last month by rising layoffs and horrendous consumer confidence
furthermore, with foreigners holding 45% of Trez debt, a currency risk premium must be in place to protect our unenlightened foreign supporters
we in the USA are very grateful to them for subsidizing our higher standard of living, financing what we cannot finance ourselves within households, corporations, or the federal govt
we are very grateful indeed
we take their goods, products, and real capital
we give them pieces of paper with govt logos on them
a nice trade for us, but sure to invite backlash
the 3-month TBill yield is around 1.4%
political pressures are huge for the Fed to close the gap from the current 1.75% FedFund target
the bond market is ORDERING GreenScheiss to cut a little
to me, the rate cut will be totally meaningless to the economy
/ jim |
