So where are we now?


So where are we now?

The most recent news from Wall street has the market doing some pretty crazy things right now, but the bottom line seems to be that interest rates are about to start heading up.

stock market

If you have been on the fence about buying Real Estate in the Lake Oroville area or anywhere for that matter, you may want to get busy at it! Savvy sellers are keeping an eye on the rates and making some great deals right now while the buyers are still out in force.

Below is an excerpt from a newsletter I receive from Carl Henker at Mission Hills Mortgage.  It sort of sums up the situation.

For all the talk and forecasts, and the Fed’s actual future actions, it depends on how healthy the economy really is when seen without the central bank supporting investments and low interest rates. Recent economic data overall has been slightly better based only on estimates and forecasts, but we ask this; is employment increasing with new jobs that pay wages at levels that will improve 80% of wage earners? Will businesses continue to report solid earnings and profits as they have in recent quarters? When ObamaCare kicks in in 2014 what impact will it have on individuals and business ( costs will increase)? Presently markets are not thinking about any of it, all market action in the last two weeks has been driven by reducing leverage and making decisions on the fly. Let’s give this a couple of months; we still hold that the economy isn’t as fundamentally strong as what most, including the Fed, believe it is.

All said though the present situation based on performance in the markets remains very bearish for interest rates and for equity markets. Our worn moniker, don’t fight the tape is still the best advice and the only way mortgage lender and originators can look at it. Opinions about the future, even two months from now in terms of conviction are as thin as shaved ham at the deli. The 10 yr note is toying with longer term support at the 2.40% levels but presently appears to be failing.