Posts Tagged ‘ Quentin Tarantino ’

Mortgage Rates Report: August 11, 2008

Remember the song “Stuck in the Middle With You” by Stealer’s Wheel? It was background music for a particularly gruesome scene in the Quentin Tarantino movie, Reservoir Dogs.

Well, I don’t know why I came here tonight
I got a feelin’ that something ain’t right
I’m so scared in case I fall off my chair
And I’m wonderin’ how I’ll get down those stairs
Clowns to the left of me, jokers to the right
Here am I stuck in the middle with you

Wall Street bond traders are singing that tune and it’s bouncing mortgage rates all over the place. They’re scared because they feel that “somethin’ ain’t right” with the underlying loans held by Fannie and Freddie. Still, the US Treasury Secretary has pretty much guaranteed that the government will back Fannie Mae and Freddie Mac should the dung hit the blades.

While the treasury securities market has been somewhat stable these past few weeks, mortgage-backed securities are bouncing all over. Some days they act like treasuries and the spread narrows. Other days, they act like junk bonds and the spread widens. If you listened to my “dog on a leash” analogy, imagine a rabid animal running away from a scared owner one day and a docile pet running and cuddling with him the next.

Like the song, says, we’re “stuck in the middle” which means, in my mind, we’ll see mortgage rates rise a bit, to the 6.5% level, then drop to Continue reading this post

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Posted by: Brian Brady on August 11th, 2008 under Financing, Mortgage and Home Loans

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