Does anyone actually believe this shit when they read it?

[bw1]

jnevin you're right only if rates stay low, but right now the economy is in a very odd situation with the flat/inverted yield curve, (which also incidentally is almost a 90% predictor of recession, it's predicted 6 out of the last 7 recessions). the Fed has been raising short-term rates but long-term rates haven't risen (see your stated mortgage rates for proof, the fed funds rate has gone from 0 to 5.25% over the past 3 years, but 30-year mortgages and long-term treasury rates have barely moved). If the yield curve returns to "normal" and long-term rates rise to where they ought to be at at any time in the next 18 months there'll be hell to pay as the ARMs adjust and people can't refi out. especially if energy prices for heating/cooling stay where they are (it's already forcing some people to sell their homes in Dallas, the jump from a $300 to $600 electric bill is even too much for them.) so you can imagine.

it's not all fear mongering IMO it's a real situation that the Fed should be sensitive to in the coming years when making rate decisions.

I agree...Not all fear mongering but certainly the media puts a negative spin on things looking for that "shocking" story. I know in my area they claim prices are down, What the fail to mention is over the past 2-3 years appreciation was rocketing. So know the market has dropped a bit and all hell brakes loose.

 

[mrplunkey]

I'd love to see the yield curve un-invert (if that's the correct term).

Its really messing-up my bond ladder because it makes no sense to replace bonds that mature with bonds that "fit" into the end of my ladder. Instead of being nice and spread-out, my ladder is getting short and stubby!

 

[ItalianMuscle27]

Im in the bracket.. I lost 2 homes to foreclosure..

 

[bran987]

I'd love to see the yield curve un-invert (if that's the correct term).

Its really messing-up my bond ladder because it makes no sense to replace bonds that mature with bonds that "fit" into the end of my ladder. Instead of being nice and spread-out, my ladder is getting short and stubby!

yeah my mom has the same problem, waaaaay too much cash piling up

 

[bran987]

There are always options.

what do you mean? you can either afford the house at a higher rate or you can't. nobody is blaming you bro, I do think you are sour on your job!

 

[mrplunkey]

yeah my mom has the same problem, waaaaay too much cash piling up

It's not a "piling-up" problem as much as it is being able to place money farther out and get paid for it.

Let's say you have a 15-year ladder. When your 2006 money matures you'd like to be able to reach-out to 2021 and get a good return. The great thing about ladders like that is once the a few years click-off you start getting 5+ year rates on money that is only 1-2 years away from maturity.

 

[bran987]

It's not a "piling-up" problem as much as it is being able to place money farther out and get paid for it.

Let's say you have a 15-year ladder. When your 2006 money matures you'd like to be able to reach-out to 2021 and get a good return. The great thing about ladders like that is once the a few years click-off you start getting 5+ year rates on money that is only 1-2 years away from maturity.

I mean it's piling up because the bonds are maturing and as the money rolls off she can't put it out far enough for it to make sense just like you said, so it's piling up

 

[mrplunkey]

I mean it's piling up because the bonds are maturing and as the money rolls off she can't put it out far enough for it to make sense just like you said, so it's piling up

Ahh... my bad. And that's right, you just can't bring yourself to place that money. I still don't trust the stock market. It's far too driven by emotion and fads and there just isn't enough "meat" that's driving the prices of stocks.