Banks aren't lending the $700 Billion from the Fed. They're using it to buy up other banks, so mortgage rates won't move much in the next week approaching the election.
The biggest stabilizing effect comes from the price of oil, down tonight in the futures market to less than $64. Who would have believed this a month ago?
The US Treasury's 10 year bond closed on Friday with a yield of 3.65%. (Yield goes lower when demand is high.)
Compare that with the yields in the Bloomberg chart on the left. What does that mean?
It means that worldwide, the US Treasury 10 Year Bond is more attractive to investors than that of the UK, Germany, France or Italy, and that's good for your buyer's purchasing power in the real estate market across the United States.
My prediction is that world events will be the "October surprise" as the election approaches.
I'm Mike in Tucson, your preferred Tucson, Arizona mortgage lender.
Think of me as your Tucson mortgage expert.
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Mike- And what sort of October surprise shall it be? Interesting what the banks did with money, but no surprise.
Mike - Yes, the banks are on a pre-election shopping spree. They're putting on their oxygen masks and taking care of themselves first, then if there's any money left after they build up their balance sheets, it will trickle down to Joes and Janes on Main Street.
Hi Mike, if I could just live in the middle of nowhere in a "Tiny Home" with killer wireless, a deep well, a garden, homeless critters and a Cowboy. We are only aware of the tip of the iceberg.
And does anyone believe that Paulson didn't or couldn't forsee how the banks would use that money???
And if he didn't, shouldn't he have???? That $700,000,000,000 was a boondogle, nothing more and nothing less. The congress was sold a bill of goods, probably schmoozed by a few timely political pac envelopes.
The cat was out of the bag for me about 2 weeks ago when PNC (my primary bank) picked up National City with the help of about $7,000,000,000 of tax payer support.
PNC also said it plans to issue $7.7 billion of preferred stock and related warrants to the U.S. Treasury under the Troubled Assets Relief Program.
This news seems positive for our buyers, that is a good thing. I just keep hoping things will turn around and selling houses is the way we can do it, one house at a time!
Stay POSITIVE!
Susie: And just how did you get an entire iceberg in there with that Cowboy and the rest of the critters ? Sounds suspicious to me... LOL.
Susie wrote:
"just live in the middle of nowhere in a "Tiny Home" with killer wireless, a deep well, a garden, homeless critters and a Cowboy. We are only aware of the tip of the iceberg."
Goodness. I'm daydreaming.
I'll tote water from the stream, go to the library for the Internet, eat off the land and you can have the critters.
Just give me a cowboy with a tent.
Mike - seems like the same problem with the bailout that there is on virtually all government programs. Hand out the cash but fail to make sure that it is used, if not wisely, at least with some common sense. I have no faith in the bailout or any government program. Stay away from my health care.
Mike - I'm with you on this The price of oil will drop below $50 and stay there for a long time. The good news is that people now look at gas mlage before they buy their next vehicle, and the auto makers have some confidence that they can sell fuel efficient cars. THat was not true 2 years ago, as mst realtors i know are still driving the largest SUV's you could buy. One even has Hummerhomes as a website.
Oil is a huge tax on the economy, and this really helps when it come back down to a reasonable expense.
Larry,
A lender friend here in Tucson drives the big Hummer. It's becoming more affordable with oil below $62. this morning.
Mike,
Get out the vote. Thanks for commenting.
Lenn, Karen Anne & Susie,
LOL!
Caren,
Staying positive is the main thing!
Lenn,
The world will start turning again on November 5th. PNC was my client in a previous life.
Susie,
Looks like you ladies have a new thread going here on my blog. LOL
Norma,
See you soon on your blog. Thanks for commenting.
Katerina,
Get out the Florida vote, and we'll see. Thanks for being the first to comment.
Mike in Tucson
Mike...This certainly isn't surprising. Just more of the same.....speculation and playing the game for personal gain! When do we smarten up and call in the bets!
Forget the tent. My bones are too old. I'll take the internet and the critters...it's a toss up on the cowboy!
Joan,
Thanks for stopping by to comment. I like "calling in the bets." Get out the NH vote!
Mike in Tucson
I sure do like seeing oil drown from it's highs!!!
your friend in Charlottesville!
Charles,
Me too! Now go sign T. Boone Pickens' petition!
Mike in Tucson
It is going to be interesting, but it appears that with all the trouble that we are seeing here in the states, Europe and other markets are going to see it much worse with the Euro and other currencies being in trouble. It'll also be interesting to see what happens this week with the Fed and some of the economic reports coming out.