Crazy day in the markets. Nothing new right. Up, down, up, down, up. The market continues to shake off bad news and move higher which still fits my thesis that we have seen a good short term (multi month) bottom. There was no reason the market should have gone up today except bad news is priced in. The tape continues to have that feel of wanting to go higher.
Tomorrow and Friday may be the two most important days for the markets for the month of December and will go along way to confirm whether we have seen the 2008 lows. Tomorrow is huge for Europe which has some major economic data coming out and central bank rate cuts forthcoming. How big those cuts will be nobody knows. Friday is the U.S. jobs report of course. We get through both and the GM hearings with the markets above 800, especially above 850, and you might be able to tie a ribbon on 2008. Of course things have constantly been coming from left field so who knows.
During the day there was a stupid leak by the National Association of Realtors concerning a supposed plan for pushing down 30 year fixed rate mortgages to 4% to 4.5%. The reason it is stupid is because apparently it is a long way from happening (it was a leak to put pressure on the Treasury). Secondly, it once again doesn't address the true problem in housing, which is foreclosures. I think eventually we will get to 4.5% and if you are not concerned about job security, house appreciation, but just looking for a good home it will be a great time to lock in 30 year mortgage rates.
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2 comments:
Won't everyone and their mom want to refi? Are they ok with that? Why not offer huge incentives to home buyers rather than anyone with a mortgage?
the chatter is it this rate would only be available for new purchases and you couldn't refi into it. How they plan to prevent refis I have no idea. This was a leak and is light on details.
From an economic standpoint giving huge incentives doesn't really help either. There is to much supply. You need supply destruction. You can create demand but at best it is short term unless the economy and/or the population grows.
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