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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (70498)	9/28/2006 7:19:02 AM
From: aryana	Respond to of 110194

"why should the long end be 7% with plunging home prices, falling oil, falling NG, etc etc." All of these things are good for the economy and they happened without the fed cutting rates from its current neutral level. It's just as hard to make the case to cut the FF rate as it is to raise it. Falling home prices (particularly in a few hot spots) is not a valid reason IMHO as the FED is not in the business of targeting asset prices and we have yet to see firm evidence of a pending recession. I believe that the drop in treasury yields is pure speculation that the FED is going to rollover to public, media, and political pressure to bail out FB's and GF's. For god's sake just refi into a 30 year -- rates are near historic lows. If you can't afford the 30 year payment give the house back to the bank.