Dennis' Mortgage Blog

Earlier this week I commented on the seemingly topsy-turvy trading in bond and equity markets recently.  News that typically pushes bond prices higher, and interest rates lower, have not had that effect.  Today there is continuing examples of investors continue their march into equities and pushing stock markets even higher.

Yesterday the Prime Minister of Portugal resigned when the Parliament refused to pass a budget with greater austerity and spending cuts.  Last Spring when the fiscal crisis in Greece was in the media due to violent protests and strikes over the call for pension reform for government workers and spending cuts (sound familiar), Portugal got some coverage due to its own precarious financial health.  Along with Ireland, Spain and Italy, Portugal was seen as a domino that could fall if Greece went belly-up, or go under without Greece's help.  With the news today the Dow is up almost 100 points today.

To recap:  Military engagement in Libya, Japan in tatters, U.S. housing markets with huge drop in sales in February, employment picture in U.S. still bleak, today we learned that durable goods orders (a view at long term capital investment) dropped for the second month in a row.

To recap: In 2007 the housing bubble created by cheap mortgage money and easy qualifying burst sending housing prices plummeting and pulling the economy into a recession that has seen over 14 million Americans unemployed.

To recap:  Since the opening bell on St. Patrick's Day the Dow is up over 550 points, or about 5%.  Since Monday the Dow is up over 300 points, or 3%.

Mortgage Backed Securities hit their recent highs on March 16th and have dropped since then (remember inverse relationship between bond prices and rates, high prices mean lower rates, dropping prices means rising rates).

Why are stocks climbing? On what news? Is a 25% increase in the value of a market from July 1st in nine months considered a bubble? Who is blowing up this stock market balloon and why?

Mortgage rates continue to remain low for the time being.  Call or email Dennis today to determine your purchasing power for a new home loan or monthly savings from a refinance.  Direct dial 562-472-1118