30 year fixed jumped 10 bps in today at the news massive bailout and dim fiscal condition of the government. What a rescue plan, using taxpayers money to bailout a few firms, pushing up mortgage rate so housing market and average home buyers suffer. Isn’t the fundamental cure of the whole mess is a recovery of the housing market? In addition, banning short-sale, what a socialist and populism short-sighted measure!
if rates are up, then prices are down. and that means that it will be cheaper (less tax $$). i guess that if the gov’t is going to do another bailout, i’d rather rates go up and the price go down… at least for now. buy low, sell high. right? no idea if this the best plan of action or not. typically i’m anti gov’t intervention, but at the same time don’t want the financial system to be blown to smithereens either. i guess we survived the RTC. I was a lil too young to say how painful that was. the fed deficit scares the $h!t outta me right now. time will tell. i don’t think many would agree that banning short selling was a good idea (ignoring one crazy thread posted today).
Rates are up due to flight to safety - 10 bps move has been pretty much the norm for past few weeks.
CFAAtlanta, You got the price/yield stuff confused. Flight to safety will cause price up, yield down. The Paulson plan is percevied as driving up future long-term deficit, incurs more government borrowing, drives down the T-bill price and drives up the yield. These are all level I stuff.