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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Elroy Jetson who wrote (24842)10/27/2004 4:13:36 AM
From: Mike JohnstonRead Replies (4) of 306849
 
Is this free market ?

It looks like the Fed has injected some freshly printed funds into Fannie Mae. Two weeks ago there were worries how would they be able to raise capital to bring their ratios up.
Suddenly it is all quiet and the stock is almost back to the level before the accounting blowup.

And why do 10 year notes yield only 3.98 % when the government is technically bankrupt, we have high inflation, huge budget and trade deficits, weak currency and oil at 55 ?

Based on fundamentals, in a free market, bonds should yield at least 10 % and mortgage rates should be well north of 10%.

At 10% mortgage rate a "tool shed" in Los Angeles would definitely not sell for 300 or 400 K , unless of course the Fed intervened directly in this market as well.
(honey, this stinks,i just got off the phone with the realtor, we did not get the house, the Fed bid 200 K more)

Ah, the benefits of a centrally planned economy.
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