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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (93683)	2/2/2009 1:46:21 PM
From: NOW	1 Recommendation Read Replies (6) \| Respond to of 116555

" Soon, maybe this week, the government is going to give anonymous banks undisclosed sums of taxpayer money for unidentified assets of undetermined worth on terms as yet undecided... in an effort to build confidence. " ckm3.blogspot.com

To: mishedlo who wrote (93683)	2/2/2009 3:05:59 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 116555

Mish, your thoughts on higher treasury rates in the forthcoming future? The spread on Agency debt and US gov't debt has to collapse to near 0 given gov't guarantees. The spike in risky debt (and not so risky debt) yields appears to be very correlated to the contraction in the US current account deficit. One would think foreigners will sell their treasuries and go to other areas of the debt market now especially in light of government backing across large swathes of the debt market.

To: mishedlo who wrote (93683)	2/2/2009 3:43:48 PM
From: Sr K	1 Recommendation Read Replies (1) \| Respond to of 116555

Did you notice that Bloomberg article referred to: "straight into the insolvent arms of Freddie Mae (FNM) and Fannie Mac (FRE"? 30 years at 5.375 would be 1,119.84/month (on $200,000 principal) and at 3.875 is 940.47. It's the same as any buydown of rate. So the builder has to finance the $179.46 per month for 360 months. That's only about $4,988 upfront per home, or 2.5% of the loan amount and 2.00% of the "selling price" if the LTV is 80%. Straightforward marketing, even to the point of being a little under 4% to entice buyers.