Thursday, November 18, 2010

Tidbits about mortgage and facts

Mortgage rates have been pressured higher the last few days but remain in the low 4’s for well-qualified borrowers.

The Fed’s goal with QE 2 (round two of quantitative easing) is to create inflation and avoid a deflationary spiral. Inflation is bad for long term securities like bonds and mortgage backed securities because it makes the bond you hold now worth less in the future. Who wants to hold a 3.5% T-Bill when you can get one paying 4.5% in a few months maybe? Inflation fears were also stoked by some recent economic reports that were better than expected. Greenspan is also voicing fears about our enormous deficits and our need to control it or risk a Greece-like crisis.

Some tidbits to share with you:
An estimated 35% of the 816,251 homes seized by lenders this year were investment properties or vacation homes.

There were 5 unemployed Americans for every 1 job opening as of 9/30/10.

Revolving credit (which includes credit cards) fell for the 25th straight month in September 2010. It has fallen 16% from its 2008 peak.

In the last 3 years, the price of oil has swung from a high of $147.27 per barrel to a low of $33.87. Last Friday it was at $84.88.

The U.S. import more than twice as much oil from Canada in August 2010 as it did from Saudi Arabia – 77 vs. 35 million barrels.

The S&P 500 is up 9.4% YTD as of 11/12/10.

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