BlogTalkRadio Podcast – June 14, 2010

2017-12-20T17:34:16+00:00 June 17th, 2010|Categories: BlogTalkRadio Podcasts|Tags: , , , , , , , , , , , , , , , , , , , |

This week on BlogTalkRadio/Lykken-on-Lending: What drives mortgage rates?  Inflation and uncertainty.  Inflation is not present right now and according to the majority of the Federal Open Market Committee members it is not expected to be much of a concern for the near future.  Uncertainty, though, is alive and well.  Continuation of the recent economic improvement in the US is considered anything but certain.  Global economic growth has been a question mark.  The ability of several European nations to satisfy their debt obligations is uncertain.  This uncertainty has resulted in tremendous volatility in the stock market, which has caused tremendous volatility in mortgage-backed securities prices. Daily, global headlines suggest to  investors its time to shift assets to more or less risky investments.  That is what happened last week.  After reaching the highest level of the year, mortgage-backed security prices were beat down on Thursday based on headlines from Australia, China, and Europe, all which suggested improving economic conditions.  Investors sold low risk bonds and bought higher risk stocks.  The Dow gained 270 points.  MBS prices lost 25/32nds.   This pattern has been in place now since April when the European debt crisis raised its ugly head.  Look for volatility in mortgage-backed security [...]

In The News: Why Greece Matters for the US Mortgage Industry

2018-01-02T18:40:44+00:00 May 13th, 2010|Categories: In The News|Tags: , , , , , , , , , , , , , , , , , , , , , |

The economic troubles of Greece have been in the news frequently in recent weeks. Its ability to recover from significant budget deficits and to pay its debts has been questioned and the government debt of Greece has been downgraded. The economy of Greece is tiny, however. The problem is that investors are concerned that other smaller European countries will reveal similar problems. Financial institutions and other private investors have become very reluctant to buy the government debt of these countries, requiring very high yields to do so. The fear is that as the problem grows, banks will become increasingly selective about lending worldwide, as they did during the subprime mortgage crisis. The clear solution is for the Greek government to cut spending, but this takes time and is politically unpopular to accomplish, while the reduced access to credit markets has already taken place. Last week, the European Union (EU) and the International Monetary Fund (IMF) agreed on a $146 billion economic aid package for Greece to allow enough time for the country to stabilize. Still, Greek workers responded to proposed austerity measures with strikes and protests. Financial markets in Europe continued to fall as investors were skeptical that the bailout [...]