Small Recovery Mounting... Two Days in the Green

Mortgage interest rates are starting to turn the corner and have begun falling once again after a couple days of gains in the MBS markets. Yesterday (sorry I missed posting) we ended up 6 ticks, and today we are currently up 6 ticks... assuming today's gains hold or improve further we will finally see support to a long sell off that has cost us over one full point in secondary.

Rates today are definitely better than they were yesterday, but lenders are still reluctant to give borrowers everything due, and rate sheets remain somewhat bleak considering where we stand in secondary. It is my hope that as pipelines clear from the recent wave of refinances, and lenders have more to lend as these tradelines clear, we will see rate sheets reflect better pricing as they try and entice people into pulling the trigger.

It is an interesting day with Bernanke having spoke at Jackson Hole and having nothing really to say other than we're prepared to act if necessary. Personally I think the Fed is causing more problems than it is solving right now. For example QE3, it is thought that if we have an liquidity problem, the Fed will start QE3 which means dumping more money into the economy and eroding the value of the dollar (inflation).

In other words, if people choose to save instead of spend, we'll have to spend for them.

What the hell is that!!! Perhaps the problem is the fact that we as a society have spent too much and need to start saving. Perhaps prices are too high to begin with and a little deflation would be healthy for society... Perhaps... is not something the Fed is concerned with, in fact I would argue they are not even concerned with making sure our economy recovers. They are concerned with protecting government interests and the current power structure. Which is why it makes sense that they would spend if we choose not to. They need money to continue to inflate so the debt our country has incurred can be paid off in dollars worth less than originally borrowed. It is the only logical conclusion, and a scary one that doesn't end well for the average person.

Man did I slide down the rabbit hole on this one.