To put it bluntly this has been the worst two week period for mortgage rates that I have seen! Ben Bernanke pulled the "Inflation Boogie Man" out from behind the curtain (as if it wasn't there already or since August of 2007' for that matter) and what has happened? Two FULL weeks of rising mortgage rates. As stated in earlier posts inflation kills any fixed income asset/coupon and MBS (Mortgage Backed Securities) are no different.
It seems traders are more apt to find other avenues to put their money. Even as I type this the DOW is up 170 points, oil is down over $4.50 and gold is down over $20.00. What is surprising to me is that inflation more often than not triggers buying of commodity items such as gold and oil. So why is it trading lower? The honest answer is "I don't know"; to often "experts" feel the need to rattle off verbage when in actuality it would be much more realistic and true if they simply stated "I don't know".
The markets and traders in particular seem to be operating on emotion, physcology, and "scared" buying and selling. An irrational market place (much like we have seen for the past several months) is almost impossible to put a pulse on. So in essence everything is an educated guess because "technical" factors no longer can be relied upon and we have come to that point in time today and for that matter yesterday! Only time will tell if some sort of rational thinking will begin to take place.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Thursday, June 12, 2008
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