Category — Investments

TOTAL COMMERCIAL MORTGAGE HOLDINGS OUTSTANDING declined in the last quarter.   This is good.  Borrowers paid off more than new loans originated.

Cash is King.  Savings rates are soaring.

INMAN NEWS REPORTS, the 10 year T bill is stuck at 3.55%,  fixed rate mortgages are still at almost 5.5%, and the 30 year T bond at 4.44%.

With the Fed printing money (i.e. ‘quantitative easing’ by the Fed buying treasuries) and doing everything it possibly can to create inflation, people shouldn’t be surprised bond and mortgage interest are more than 6.5% higher than the rate of inflation deflation.

Message to Obama:  heh, the $2 trillion the Treasury has to borrow by selling T bills and bonds to finance the national debt, the $1.8 trillion deficit and Stimulus, only 7% disbursed, ain’t agonna happen without higher interest rates ’cause the foreigners expected to buy ain’t a’ buyin’.

An’ if Bernake keeps a’ buyin’ Ts from the left Treasury pocket ($1 trillion this year) to put in the right Fed pocket ($2 trillion more) it will provoke foreigners ta’ mutiny an’ throw the dollar in the pond, ’cause it won’t be worth nothin’.

Obama: Everyone In The Water Now!!

BUY OF THE WEEK:

THIS 3X2 1506′  SF HOME at 2404 Rinconada in Willow Glen is listed at $379,000.   It is a perfect rental home, and at $251 a square foot can’t be built today for the price.  Almost no maintenance; ready to rent.  With 20% down, monthly payments at about $1600, rent at $2350, put money in your pocket every month.  Buy it for less than the asking price.

Dr. Housing Bubble uses BLS U-6 measure of unemployment which shows 1 in 5 Californians are unemployed, or working part time while looking for full time work. Read the whole thing.

FORBES MAGAZINE article by Nouriel Roubini forecasts stag-deflation over the next five years.  The article provides the economic technical data for anyone who prefers statistical heuristics.

For readers who are concerned about midterm inflation resulting from all the money the Fed is pumping into the financial system, I would point out that historically economists have been completely unreliable in predicting inflation.  Roubini’s analysis does not take into account international monetary effects, like the value of the dollar.   I’m still concerned about the dollar’s value.  Over the next five years if the dollar decreases in value prices go up.  And for real estate owners with ARMs mortgage payments increase.