The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (19183)	9/29/2004 5:06:18 PM
From: russwinter	Read Replies (1) of 110194

The 30 year mortgage only traded to a 5.64% according to MBAA, which seems oddly high given the sub 4% ten year last week. The agency market from the source I track gcm.com had a spread widening of maybe only 8 bps during all the FNMA news of late, but that's not enough to explain why mortgage rates only dropped from 5.79% on 9-8 to 5.64% last week. Not sure why mortgage rates didn't follow the big treasury rally, but they didn't so a 2211 refi index happened not because of lack of interest, but more lack of rate opportunity. If the ten year rate heads higher than today's 4.10% level, any activity may indeed fade fast. I really feel it will be mortgage rates that will kill the golden goose for the housing and credit bubble, not exhausted consumers. However, 6% plus 30 year, 4.50% ARMS might be the ticket, it may not take much now. 5.25% will rejuvenate the credit junkies, they'll jump all over that. A second goose killer might be tighter lending standards (FNMA?), that would work too. Please post any real, concrete signs of that if you spot it, it will be important to the credit bubble death watch equation.

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