My Mind on Mortgages

This article appeared in the WSJ over the weekend.  It examines the impact that “slack” in the economy is having on curbing the inflationary pressures of money supply. A couple weeks ago I posted this piece in which I wrote about Irving Fisher’s equation of exchange.  When you solve for price level (a change in [...]

Vitaliy Katsenelson wrote a good article for Forbes today about the impact that a $700 billion bailout would have on confidence in the US dollar. Excerpt: “In the past, we did not really have to worry about the financial strength of the U.S. government. Today, that financial strength has been tested. I doubt it will [...]

After reading and blogging about one article in Barron’s this weekend I came to another outstading one.  Here is a link.  Nice work Barron’s. Among the points that I found interesting: * If Fannie Mae [ticker: FNM] and Freddie Mac [FRE] stopped all of their activity — for a moment, forget about shutting them down [...]

According to this article on CNN Money’s website gas prices are expected to climb back towards the $4/ gallon level.  Althugh there is still a lot of uncertainty about the extent of the damage to oil producing infastructure caused by Hurrican Ike it looks like gas prices will be increasing.  I’ll be filling up my [...]

In 1958 Phil Fisher wrote an investment classic called, “Common Stocks and Uncommon Profits”.  In the first chapter he wrote a very profound statement regarding the cause of inflation.  This seems to be extremely applicable in today’s economic environment: “It seems to me that if this whole inflation mechanism is studied carefully it becomes clear [...]

In his speech to the worlds most powerful central bankers today Fed Chairman Ben Bernanke spoke briefly about inflation according to this NY Times article.  From the article, “Mr. Bernanke, while acknowledging ‘an increase in inflationary pressure,’ reasserted his view that in the near future, the upswing in inflation from the oil and food shocks [...]

Rates are modestly lower this morning. Renewed credit worries have helped mortgage rates remain low in the face of hot inflation data.  Here are links to the articles that were referenced in today’s rate update video: -Blog posting & link to Sunday’s Barron’s article regarding the inevitable nationalization of Fannie Mae and Freddie Mac (this [...]

Rates are unchanged again this morning. Last Thursday the Labor Department issued the monthly Consumer Price Index (CPI) report which showed that prices at the consumer level in our economy grew at the fastest pace in 17 years.  Today, the Labor Department released the monthly Producer Price Index (PPI) report which reports on prices at [...]

If you’ve been a consistent reader of ‘rate update’ or this blog you know that inflation expectations are the primary factor for driving mortgage rates. When expectations of inflation increase it causes rates to rise and vice versa. There are two articles published this morning which give contradictory forecasts for inflation. It just goes to [...]

What causes mortgage rates to go up or down? How come one day 30-year fixed rates are 6.00% and the next they’re 6.125%? For many people the vision of a boardroom full of cigar smoking bankers comes to mind when contemplating this question. Or, many believe that the Federal Reserve Bank holds ultimate control with [...]