Your Gold Teeth
From "Countdown to Ecstasy"
May 27 (Bloomberg) -- Yields on Fannie Mae and Freddie Mac mortgage bonds rose for a fourth day, after exceeding for the first time yesterday their levels before the Federal Reserve announced it would expand purchases to drive down interest rates on loans.
Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds climbed to 4.55 percent as of 3:15 p.m. in New York, the highest since Dec. 5 and up from 3.94 percent on May 20, data compiled by Bloomberg show.Rising mortgage-bond yields, driven higher in part by climbing Treasury rates, means the Fed now “faces a challenge to its ability to sustain low mortgage rates,” according to Jeffrey Rosenberg at Bank of America Corp.
The Fed, seeking to use lower home-loan rates to stem the housing slump and bolster consumers, said March 18 it would increase its planned purchases of so-called agency mortgage bonds by $750 billion, to as much as $1.25 trillion, and start buying government notes."
The rising rates are due to all the borrowing that the government is doing. I know some people are operating on the hope that the Fed's have some secret plan for making the inflation go away. Sorry to burst any bubbles out there, but no, they don't.
When you take into account the fact that the Fed's have to finance a massive deficit, and the only way to sell that many treasuries is to have a very high inflation rate, the only thing they can do is stand by and let inflation take off. Heck they are creating the inflation. Get ready for 15% inflation and a rerun of the Carter era stagflation.
Of course, Bush will get blamed for all of this.
~ 3 Wood
He should not be blamed for ALL of it 3 Wood, but he certainly played an undeniable, unusual & exigent role in it...
Single-Regulator Plan for Banks Now Close
WASHINGTON -- Top Obama administration officials are close to recommending that Congress create a single regulator to oversee the entire banking sector, people familiar with the matter said, a departure from the hodgepodge of federal agencies that failed to contain the financial crisis as it ballooned out of control last year.
The new agency is expected to be a major plank in a proposal that Treasury Secretary Timothy Geithner and White House officials send Capitol Hill in a few weeks with the goal of overhauling supervision of financial markets.
RENDER, MFers! Hopium Changeum!