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Archive for Energy Crisis
September 2, 2008 at 12:09 pm · Filed under Energy Crisis, Gulf Coast Housing, Gustav, Headlines, Hurricane, Residential, The Mortgage Market
So, what happened with mortgage rates while you were weathering Gustav?
Well, the long weekend is over. Summer has officially ended. And, we are back at work to see what gifts were left behind by our friend Gustav. Those who made the mass exodus from New Orleans are probably mad and irritated that they left. But, it is that kind of thinking that gets people killed when the storm is worse than expected rather than weaker than expected.
New Orleans survived the storm, and for the rest of us on either side, it definately could have been worse. But the markets today are reacting to the lack of any affect on the offshore oil platforms. As reports from all of the companies with assets in the Gulf begin to come in, we are seeing that the damage is mininal if at all, and the oil traders are running for the hills because of it.
So what does this have to do with mortgages and real estate? Well, the sell off in oil is creating a run on the stock market. A run on the stock market is causing bond traders to sell bonds and buy stocks. As the bonds fall from a sell off, mortgage rates rise. Because of this, today is a great day to lock in your rate ahead of losses that are sure to happen this afternoon or tomorrow in mortgage rates.
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August 18, 2008 at 11:48 am · Filed under Affordable Housing, Did You Know?, Energy Crisis, Headlines, Pensacola, Presidential Election, The Mortgage Market
I came across an interesting statistic today from the IRS.
Did you know that, according to the IRS, the top 1% of US tax payers are responsible for 40% of all federal income tax revenue? Ten years ago in 1998 the figure for the same group of people was 35%. And, twenty years ago in 1988, the figure was 28%.
This got me to thinking. As we continually move more and more towards a robin hood society, what are we actually teaching the youth and future entreprenuers of tomorrow? Is this the land of opportunity….until you get too successful? Is it better to be an entreprenuer off shore? At what point do we place such a penalty on the wealthy that they decide it is just easier to move to the Caman Islands or Costa Rica?
Perhaps we could vote in a new president that wants to raise taxes on the wealthy, yet again. If it ain’t broke, don’t fix it right? It seems as though a democracy can only survive until the majority figures out that they can vote in whatever incentives they want until there is nothing left but too many programs, and no more money to fund them. I really hope we still live in a democracy when I retire. But, since that is about 30 years away, i’m beginning to have my doubts.
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July 22, 2008 at 10:37 am · Filed under Affordable Housing, Energy Crisis, Gulf Coast Housing, Headlines, Pensacola, Residential, The Mortgage Market, Uncategorized
Mortgage bonds are feeling more pressure today on the heels of comments by the Philadelphia Fed President.
Philadelphia Fed President Charlie Plosser stated today that “inflation is too high”. Of course whenever the word “inflation” enters into the markets, bond traders sell. He also added that the Fed must “back up their words with action”. This is a clear indication that rate hikes in the near future are eminent, and the market seems to agree.
To re-cap – oil prices are based on the US Dollar. With the lagging value of the dollar being at least one of the prevailing reasons for high prices, one way to help is to increase the value of the dollar. Increasing the Fed Funds Rate and making money more difficult to borrow is a proven way to strengthen the dollar, and the trickle down affect could very likely lower the price of oil.
Of course, the flip side to this coin is the already struggling credit market where people have had difficulty already in borrowing money with rates where they are now. While the short term solution may be to shore up the value of the dollar, the long term solution will be to lower our dependence on foreign oil.
For more on our dependance on foreign oil and how we may be able to change it, see my post on The Pickens Plan.
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