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To: tonka552000 who wrote (5138)	7/18/2003 4:00:14 PM
From: RealMuLan	Respond to of 5423

there would be many of this sort surprises coming on the way as the baby boomers are retiring, and as the Fed squandering Social security money at an ever faster pace<ng>

To: tonka552000 who wrote (5138)	7/18/2003 5:07:00 PM
From: RealMuLan	Read Replies (3) \| Respond to of 5423

you think that is unbelievable. read this "The bill also raises from 70-1/2 to 75 the age at which retirees must start drawing money from retirement accounts." Message 19124124

To: tonka552000 who wrote (5138)	7/20/2003 11:22:11 PM
From: Jim Willie CB	Respond to of 5423

Hartman of Puplava's Financial Sense Online he remarks on what is happening in TBond market unwinding mortgage hedges will accelerate we should pound long rates way past 4.0% (I think this Hartman guy has been spot on for several months) financialsense.com The Real Cause Once Alan Greenspan began speaking on Tuesday, he tried to paint an optimistic future for the U.S. economy, but left most listeners with more uncertainty than answers. All he had to do was tell the markets that “special policy actions” (implied open market purchases of government bonds) are “most unlikely to arise,” and the bond market protested. They protested because that is all we continued to hear since the last Fed meeting on June 25th. Last month’s rally in the bond market was based on expectations that the Fed would begin purchases of treasuries. Maybe Mr. Greenspan and company decided it would create even bigger distortions in the financial markets if he worked to push more money into the bond bubble. Over the course of three weeks, the Fed changed their stance from buying bonds to avoid deflation, to saying that the situation was unlikely to arise. Basically he said, “Let the selling begin!” Once the selling of U.S. Treasury Bonds began in earnest, market forces began to take over. When interest rates make a sharp move, mortgage writers need to adjust their positions to re-hedge their interest rate risk. Normally, mortgage writers buy treasury instruments to offset early mortgage prepayment risks when they think that rates could decline further. What happened this week is just the opposite. With rates rising, they have less risk of pre-payment, therefore they sell the treasuries that they held as a hedge for declining rates. According to an article in today’s Wall Street Journal, “While mortgage re-hedging and other technical trades may have exaggerated the Treasuries’ sell-off this week, that selling could get a lot worse if the Treasury 10-year note’s yield rises to 4.25%, analysts reckon. If that happens, heavy selling in Treasuries could last for days, and yields would shoot up much faster.” Above 4.25% on the 10-year yield is a critical level for the mortgage writers’ treasury hedge positions. MORTGAGE RATES CURRENT 1 MO PRIOR - 3 MO PRIOR - 6 MO PRIOR - 1 YR PRIOR 15-Year Mortgage 4.81 4.37 4.82 5.01 5.55 30-Year Mortgage 5.49 4.92 5.47 5.61 6.1 1-Year ARM 3.52 3.48 3.75 3.83 4.06 Please take a look at the rate table to see that mortgage rates have not risen to the same degree as yields on treasury bonds and notes. Over time, we will see where mortgages stabilize, but for now, I would say that rates have not gone high enough to kill the housing market. I expect the cash-out refinancing activity will subside a bit, but rates are still low enough for debt consolidations or to buy a home with reasonable payments.