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Archive for Credit Crisis
November 24, 2008 at 2:18 pm · Filed under Credit Crisis
Here we go again…The next company too big to fail puts their hat out for some tax payer love.
The more I hear the term “bailout”, the less I believe it is the right thing to do. Probably the one that I have the biggest problem with at this point is the auto industry. I know that there are millions of jobs associated with the auto industry. And I know that a collapse of any one of the big 3 US auto makers would have a devastating affect on the economy. But, has anyone noticed that Toyota and Honda are expanding?
Hmm…Some auto manufacturers are actually expanding and creating new jobs, while the US auto makers are completly crippled by expenses and technology issues. I also discovered that the average wage for GM was $73 per hour, while the same worker at Toyota is making about $44 per hour. I am no economist, but it looks like the company that makes a better product and can sell it cheaper deserves to beat out the competition.
So, that brings us back to Citi. The term “too big to fail” is complete BS to me. If you are providing a quality service, with an appropriate amount of risk, in a market where consumers need or want your product….you won’t fail (regardless of how big you are). The more we keep throwing money at these companies to subsidize their failure, the more it is going to come back around to bite us (or our grandchildren) in the end. And worse yet, the more we do it, the more everyone becomes numb to the idea of it.
Anyway, that’s my soapbox for the day. If you would like to discuss your own mortgage bailout, give me a call at 850-221-8334, or visit SteveRussellOnline.com.
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November 10, 2008 at 12:02 pm · Filed under Affordable Housing, Credit Crisis, Gulf Coast Housing, Pensacola, Residential, The Mortgage Market
Stocks are higher this morning following a rally in the Chinese market after a government stimulus plan for $586 Billion was announced to help relieve their struggling economy. As the stock market shows signs of life, it will continue to put pressure on bonds this week to hold their current levels above established resistance.
Also scheduled this week, the Treasury Department will be auctioning off $55 Billion in treasury notes which will no doubt put even greater pressure on the bond yield. If the yield on mortgage bonds falls, mortgage rates will go up to meet the market demand.
Watch rates carefully this week. If you have a loan in process, it would probably be prudent to lock ahead of potentially bad news in the financial markets. If you are still looking for a house, or are not ready to lock, it may cost you on your mortgage rates later this week.
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October 17, 2008 at 9:55 am · Filed under Affordable Housing, Credit Crisis, Gulf Coast Housing, Residential, The Mortgage Market
Mortgage Bonds have been slaughtered lately, but may be correcting.
If you checked rates last week, and then looked again this week, you may have noticed that they are about .5% worse. Mortgage rates are based on the trades that happen with mortgage bonds and mortgage backed securities. When traders and investors are buying them, the price goes up, and mortgage rates come down. When the market is scared of them, the demand decreases which drives up the yield curve for mortgage bonds and therefore causes interest rates to rise to a point where investors are comfortable buying the paper.
If you were looking at a mortgage bond trading chart last week, it looked similar to rolling a marble off the kitchen table…not good. This week, bonds have been recognized as over-sold, and have recovered almost 50% of the losses. For answers to your mortgage and real estate questions, check back here often.
If you are currently interested in taking advantage of this incredible real estate market, call me at 888-257-8383, or apply online at www.SteveRussellOnline.com.
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