{"id":5465,"date":"2008-11-07T20:33:03","date_gmt":"2008-11-08T03:33:03","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=5465"},"modified":"2008-11-07T20:33:03","modified_gmt":"2008-11-08T03:33:03","slug":"why-i-think-the-jobs-report-wont-be-helpful-for-mortgage-rates","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5465\/why-i-think-the-jobs-report-wont-be-helpful-for-mortgage-rates\/","title":{"rendered":"Why I think the Jobs report won’t be helpful for mortgage rates…."},"content":{"rendered":"

Okay, let’s face the fact that the jobs reports and the reports from Ford and General Motors that came out today were ugly.\u00a0\u00a0 Not just ugly, downright nasty.<\/p>\n

In normal economic times, that sort of bad economic news would send people fleeing stocks and going into the bond market.\u00a0\u00a0 That would in turn send bonds and Treasuries up and the rates down.<\/p>\n

But that didn’t happen.\u00a0\u00a0 Just looking at one indicator – the 10 year Treasuries, the yield went up by .09% today.\u00a0\u00a0 What’s up with that?<\/p>\n

A couple of things are keeping mortgage rates higher than what the economic fundamentals would justify:<\/p>\n

    \n
  1. The amount of money the government is spending on bailouts.\u00a0 The Federal deficit is truly skyrocketing because of all of the bailouts, buyins, rescues, TARPS, etc. that are happening.\u00a0 That money needs to be financed somewhere because we don’t have the money sitting in the “bank.\u00a0\u00a0 When the markets get flooded with additional loan demand, the “buyers” of the debt can demand a higher rate on their money.\u00a0\u00a0 That pushes rates up.<\/li>\n
  2. The concern that foreigners are not going to be able to continue to buy our debt.\u00a0\u00a0 This is not an economic downturn that is only happening in the United States, it’s truly an international downturn.\u00a0 If, due to concerns about the amount of US debt or due to economic downturns in other areas, foreigners either stop or slow down the amount of US debt that they buy, that will reduce demand and push rates higher.<\/li>\n
  3. The Bank of England cut rates by 1.5% this week (in their version of the Fed Funds rate).\u00a0\u00a0 We can’t do that.\u00a0\u00a0 Why?\u00a0\u00a0 Because we’re already at 1.0%.\u00a0\u00a0 So the options that the Fed has going forward are more limited than we’d like to see them.<\/li>\n<\/ol>\n

    I truly believe that if this was a “normal” economic downturn, we’d see mortgage rates at least .75% lower than we have them.\u00a0\u00a0 I also believe that short of a major Federal “buyout” of mortgage backed securities (a topic for another post), we aren’t going to see rates substantially lower than we have them now.\u00a0\u00a0 I also believe that it’s going to Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Okay, let’s face the fact that the jobs reports and the reports from Ford and General Motors that came out today were ugly.\u00a0\u00a0 Not just ugly, downright nasty. In normal economic times, that sort of bad economic news would send people fleeing stocks and going into the bond market.\u00a0\u00a0 That would in turn send bonds […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26],"tags":[264,263],"class_list":{"0":"post-5465","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"tag-jobs-report","8":"tag-tom-vanderwell","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":14866,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14866\/could-mortgage-rates-drop-after-a-treasuries-credit-ratings-downgrade\/","url_meta":{"origin":5465,"position":0},"title":"Could Mortgage Rates DROP after a Treasuries’ credit ratings downgrade?","author":"Brian Brady","date":"July 29, 2011","format":false,"excerpt":"The dictated debt limit deadline looms and a credit rating downgrade, to US Treasury securities and agency mortgage-backed securities, seems likely.\u00a0 Naturally, a spike in treasury yields is expected and a subsequent rise in mortgage rates should follow. \u00a0 That's right out of the senior year textbook, in most American\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9504,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9504\/the-fed-translated-and-why-it-isnt-good-for-interest-rates\/","url_meta":{"origin":5465,"position":1},"title":"The Fed Translated – and why it isn’t good for interest rates…..","author":"Tom Vanderwell","date":"August 13, 2009","format":false,"excerpt":"My apologies for taking almost 24 hours after the Fed to get this up.\u00a0\u00a0 As I\u2019ve done in the past, I want to go through what the Fed said yesterday and give some insights into what I think it means for the housing and mortgage markets.\u00a0\u00a0 You can find the\u2026","rel":"","context":"In "Dirty Laundry"","block_context":{"text":"Dirty Laundry","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dirty-laundry\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5764,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5764\/quick-summary-of-the-day\/","url_meta":{"origin":5465,"position":2},"title":"Quick Summary of the Day…..","author":"Tom Vanderwell","date":"November 21, 2008","format":false,"excerpt":"Okay, here's a quick summary of the day: 3 Banks got taken over by the FDIC.\u00a0\u00a0 The biggest one was Downey Federal, a huge \"Option Arm\" lender. While Citibank didn't go under or get bought out, but their stock was 50% lower tonight than it was Monday morning. The stock\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5913,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5913\/treasury-may-lower-mortgage-rates\/","url_meta":{"origin":5465,"position":3},"title":"Treasury\u00a0may lower mortgage rates?","author":"Tom Vanderwell","date":"December 3, 2008","format":false,"excerpt":"WASHINGTON (MarketWatch) - The Treasury Department is contemplating a proposal that would cut mortgage rates for new loans for homes, according to the Wall Street Journal. The plan would employ Fannie Mae to offer mortgages with rates as low as 4.5%, roughly 1% lower than current rates. The measure is\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2796,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2796\/will-the-fed-buy-mortgage-backed-securities-in-the-open-market\/","url_meta":{"origin":5465,"position":4},"title":"Will the Fed Buy Mortgage Backed Securities In the Open Market?","author":"Brian Brady","date":"March 18, 2008","format":false,"excerpt":"I never post my Mortgage Rates Reports here.\u00a0 They're boring unless you are thinking about buying a home or refinancing your mortgage.\u00a0 Today, it seems plausible that the Fed is shifting its open market activities from buying treasuries, to buying mortgage-backed securities, in order to bolster liquidity in the mortgage\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6152,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6152\/the-fed-translated-3\/","url_meta":{"origin":5465,"position":5},"title":"The Fed Translated…..","author":"Tom Vanderwell","date":"December 16, 2008","format":false,"excerpt":"Release Date: December 16, 2008 The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1\/4 percent. What\u2019s up with the \u201crange\u201d of rates?\u00a0\u00a0 Well, they\u2019d look pretty foolish if they said they wanted the rate to be at .25%\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/5465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=5465"}],"version-history":[{"count":1,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/5465\/revisions"}],"predecessor-version":[{"id":5466,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/5465\/revisions\/5466"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=5465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=5465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=5465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}