Mortgage Rates Won’t Soar When Fed Ends Buying Spree

Conventional wisdom states that mortgage rates shall increase once the Federal Reserve retreats from its unprecedented move into the market March 31st. However, if this were to be true – you’d think the market would be sniffing it out ahead of time and we’d already see a moderate increase. Instead, long term rates remain fixed near 5%. Aside from the bullish views below, some very smart people are speculating that the Christmas Eve massacre (Jan 5, 2010: WSJ – The Treasury Department’s Christmas Eve Masscare of the US Taxpayer) was an under the table way to hand off the responsibility of suppressing mortgages from the Federal Reserve to Fannie & Freddie. (aka FanFredron)

If the left hand or the right hand is buying mortgage backed securities (MBS), it really doesn’t matter. Further, if *everyone* believes that if rates jump “too high” (as judged by a small cadre of people, rather than the market) the Fed will come back to the rescue, it tends to self fulfill. Which in and of itself will help to surpress rates. Showing once again how “free markets” are nothing more than a cool bumper sticker in the US nowadays.

Via WSJ:

What is a Deed?

A Deed is a document or a piece of paper that transfers title from one owner of real estate to another. The idea of having a document that gives the ownership of land from one person to another is more recent than you would think.

In the old days, since it was impossible to physically give land from one person’s hand to another person’s hand, it used to be necessary to have other ways of transferring ownerships. For instance, in ancient times since there were no Deeds, the Seller would have a meeting the Buyer on the land that was being sold.

The Seller would then in front of several witnesses give the buyer some sort of small token of the land, such as a tree branch or piece of earth. Now, of course there are Deeds to transfer the ownership of land from one to another.

not look like second mortgages

UNEDITED)How did something so right go so wrong? Americans cheered when they heard about affordable insurance for everyone.

Today, however, that dream has quickly faded and affordable care for everyone has now turned into an idea that every individual must purchase health care or be fined at the end of the tax year.

Most insurance premiums look more like a second mortgages. What many hard working American families could not afford in the first place is going to be forced upon them by our elected leaders. The justification for this was the costs of health care was going up because so many people either opted not to pay for the insurance or were unable to do so.

Sunday morning I read an AP Press release concerning a company called Anthem, or Blue Cross of California who wanted to raise the policy rates from 25 to as much as 39% on roughly 700,000 existing California customers. The article pointed out that Anthem Blue Cross is sending rate increases out to customers in at least three other states that will amount to 15% more for premiums. In Maine, Blue Cross is asking for an increase of 23% which is on top of a 32% increase last year. All in all the citizens of Maine will see premiums rise up to 55% in two years.

Source: http://www.standard.net/topics/opinion/2010/02/17/health-insurance-premiums-not-look-second-mortgages

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