Heck 10yr yields at 4% and I might start buying myself, better return than I'm getting elsewhere. Nice knowing you 2010.

Last person out, please turn off the lights.

The US Economy miraculously recovered in the last 4 weeks.....don't your feel it!!!!! I certainly felt it!!!! Where's the parade!!!! The recession is over and happy days are back again!!! Wall Street needs a WAKE UP CALL!!!

everytime I quote somone or take an app the rate is invalid the following day...this is getting old, lol.

I need John Belushi to remind me it wasn't over when the Germans bombed Pearl Harbor.

http://www.youtube.com/watch?v=V8lT1o0sDwI It's not over...

@Jerry, Accept the reality, the Economy recovered. I think it is good for all of us..

Nate that is the issue I am having....quote today and no good tomorrow... Buyers waiting on short sale approval not really liking this either.... Big Ben has to throw us a bone this afternoon...he can't be liking what is happening...it's as if the USA missed a credit card payment and lost their low introductory rate....LOL

Be prepared to sell 5.25%'s at "best execution". This is just a bloodbath at this point. Closed UP last night, to be down 16+ tics this morning already???

bobby - great line!

AQ--How are the 2011 forecasts coming? Can't wait to see what your foresee in the year ahead.

C'mon Ben, if you have anything left - same pattern starting that smashed Greece & Ireland? - can't afford what this does to our world of sovereign debt!! Very unstable feeling here!

ignore troll

@dereje- I guess you're right about the economy. It took 2 years but this idea of the "jobless recovery" has been accepted by both the equity and bond markets. I guess drifting into a welfare state(10% unemployment) is okay as far as the markets are concerned, in that, it's settled into prices by now(I guess). Hard to believe but each day that goes by I'm realizing this is our path. At any rate, not good for the purchase market business(high u/e, low wage increases, low confidence, high rate volatility), and I would be careful when you say the economy has recovered. 10% of the workforce aint buying it.

REJOICE EVERYONE....I'm in a dancing mood!!!! For your reading pleasures....I've written the lyrics of "Happy Days Are Here Again" for all of us. Okay...here it goes. So long sad times Go long bad times We are rid of you at last!!!! Howdy gay times Cloudy gray times You are NOW A THING OF THE PAST Happy days are here again The skies above are clear again So let's sing a song of cheer again Happy days are here AGAIN!!! Altogether shout it now There's no one Who can DOUBT it now So let's tell the world about it now Happy days are here again

So happy Barry told me to float.....

i dont care any more I guess need a new job, not possible to come back for a long time . these rate increases are mind boggling

The economy has not recovered... apparently fundamentals have been replaced by computer algorithms that are increasingly calling the shots.

The people that play the market are reading websites that blue collar workers don't read. There is a huge disconnect between how well the large corporations are doing and how bad the local town budgets, unemployed left behind, and small business' strugling are doing. Christmas is a time to rejoice and be glad and that is what people are doing right now. They are eating carbs, spending money on loved ones, and working less hours. Then if you are in the cold north east like I am, January, February, and March are depressing months in a booming economy, let alone in an economy where you know people unemployed, foreclosures start popping up everywhere, etc. I think it is great best buy is down, i think our economy is doomed as long as people are spending their paychecks on items that become obselete in 6months and end up in the trash in 2 years. Only so another one has to be bought. Doesn't this happen every year?

guys, it may look bad now from your prospective, but just wait. The unemployment numbers will start to go down alot in a very short time. The fact is all sectors of the economy will start to point upward. But, low rates are a thing of the past.

http://finance.yahoo.com/echarts?s=%5ETNX+Interactive#chart1:symbol=^tnx;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined If you look at the 2-year chart on the 10-year yield, this run over the last month looks like an abrieviated version of higher lows and resistances from the Dec 2008 to Jun 2009 timeframe. If it plays out the same, we are near a top and should see a dip soon.

So what can the feds do now? Seems like the housing market might just fall off a cliff now. Why can't the Feds just direct lend to the consumers at a low rate? I know, I'm showing my Joe the plumber intelligence with that question but seriously.

DJ- If your measure of the economy recovering is the stock market then you're wrong. For one the stock market is WAY overvalued (http://www.multpl.com/), if it is GDP....then you're wrong again since GDP is weak at best and significantly below previous recoveries after a recession has been declared "over". If it's retail sales reports from late November, your wrong...just look at Best Buy numbers today. Unemployment....wrong again. Real unemployment as measure (U6) has barely improved in the last year and has been increasing since August. At best the economy is not tanking any more, but to say we have recovered is flat out wrong. Every month a record number of Americans receive food stamps (currently over 40 million), a record number receive unemployment benefits (10 million) and nearly 60 million more survive on their limited social security benefits. So 35-40% of Americans depend on the US government to eat, provide shelter and clothing. Good luck growing an economy with that many dependent people. Foreclosures are still a major problem and while companies are no longer having mass layoffs, the labor market has not returned. Small businesses still can not get loans, customer traffic is still down and they remain under pressure just to stay open.

stock market will have a 8-12% correction in january well ahead of schedule. reason for it? it never happened in the fall. I still think better rates are to be had than the crap right now, that being said looks like we have hit the bottom. If lenders are going to reprice negatively 10x as much as positively maybe we see 4.375 again as par, never 4.0% let alone 3.875. Rates lower at end of january, trough in feb 2011 and start to rise in april/late march. This is an interesting site for forecasting below....least to say they were wrong about december 2010= month of hell http://www.forecasts.org/fha.htm I will be ecstatic to get 4.5% if I can. Hell I'll take 4.675 at par. (30 year). Just put an offer in today on the house!

Just the same boom and bust roller coaster we've been on for a few years now. Except now, because of declining values, it's almost impossible to refinance purchases six months later when rates go down again. Those purchases we do when rates are back in the fives and sixes won't be the refis in our pipelines come this fall, or even next year. In fact, it may be several years before we can refinance those, if at all.

spencer the funny thing, some moron tried to say higher rates will spur those on the fence.....are you kidding me? Rates like this will only precipitate procrasitination as many will assume home values will lower and they would be right. Here's a link http://finance.fortune.cnn.com/2010/12/10/will-rising-mortgage-rates-spur-home-sales/

Re AQ's prior blog post, I don't think we see a dble-dip per se, but no, I don't see, as I said, cons spending leading us out of the stagmire we are mired in. Also to echo Edgar's thought, I was also going to point out that we are 20 MONTHS out of the recession. Do you read papers, DJ, the web, TV? Someone here pointed out he had a trucker friend referring to 50% reductions in moving goods this year. More anectodal evidence: tax revenues last yr. at near record lows, as rprted by IRS. Frankly, I consider almost all these econ rpts as basically fluff. Bottom line if the IRS collects no money, that is bc we have no money. We'll see come May. To this day I see/hear people and the media refer to a 'bad' econ, or the 'recession'. Nearly 2 ys removed and folks still see this as a recessionay situation. That, folks, is historically a very bad recovery, if that's what this is. So I see a continuation of maybe 1-3% type growth. That's petty by historical stds and considering we left the worst recssn ever 20 mos ago we should, again historically, ie 81-82 recssn, be looking at dble digit GDP. Does anyone seriously think something like the tax pkge will create this? The job figures will remain where they are, perhaps worse, thru next yr. Book it. And, so, as AQ says, at the end of day it is a waste of mental energy to rationalize this market, other than to merely say we're in a stock bubble and like all bubbles it'll have to run its course. Then maybe a flight back to safety

Kennon- i think you are wrong about the unemployment rate going lower. It is going higher before it goes lower as a lot of people re-enter the work force. Right now there are millions of people not looking for work and they are not counted in the official Unemployment rate.

Turn off the computers off after the big boys have gone short, and voila instant flight to safety They still profit from increase in bonds and short positions. Bonds rolling over would be the death blow to the US.

Ach well this is just a symptom of the fractional reserve banking system in which debt must grow exponentially in order for the monetary system to remain solvent. Stagflation here we come.

Victor- just watch the numbers in the upcoming months. I agree with you but that was 2010. 2011 will be different. Too many signs point to a, in my opinion, a strong recovery.

@Kennon....cannot agree with you...this market is a traders' construct...the rubber simply does not meet the road for Main Street's recovery....

At this point is tehre anything that could be said at the FOMC that could hurt us even more today? Is everything cooked into the current MBS prices/ Treas Yield?

Kennon: I admire your optimism in the face of all of this, but I have to agree with Mark. What signs, specifically, are pointing to a stong recovery? Also, have you considered that the recovery won't happen next year, and rates will go up anyway?

You guys are seriously wasting precious minutes of your life responding back and forth with Dereje. Eventually he will go away if no one interacts with him.

@Brett...yup.. that scenario has been seen before, with Paul Volker in charge...had a name too...stagflation....

Dustin...could you mean that Kennon = Dereje????

Scary! I seem to recall something about 21% interest rates when Volker was at the helm of the central bank. I think I'll buy some disco shoes and watch Saturday Night Fever this week in celebration of our regression back to the Carter administration. If anyone needs me, I'll be watching my mood ring turn black.

Can't have a real recovery without jobs for the average people out there. With a nation as large as the USA, I don't think it can survive long term at employment rates seen in places like Ireland or England. The economics of scale are going to cripple the US over time. If this is really the "acceptable new normal" that those in power deem appropriate, i'd say we would have been lucky to trade that for Japan's lost decade. On the UI side of things, the trust fund is defecit spending in basically every state that has high unemployment just to keep people paying rent and buying food. When this finally ends for the millions of people collecting UI benefits, they will simply move onto the next government program and bankrupt that one as well. If anything should be a sign for concern regarding defecit spending, this would be it. I won't advocate for killing social programs, as that would be tantemount to telling US citizens to roll over, starve, and die to quote scrooge "and reduce the surplus population". However, the current structure and model that provides income to individuals in the US can't continue on this path and has to change. Who or what that will be the force to bring about this change, i have no idea. What i do know is that all the existing policies in place have been wholly ineffective at addressing the real issue and needs to be moving in the opposite direction that it has been by supporting the "chosen" aspects of private industry and allowing those chosen ones to kill off all the rest.

I think they are 2 different people. Kennon's grasp of the english language is much better than Dereje's.

if things are so rosy, let's end QE2 and raise Fed Funds rate

well if the recovery does not happen, then this rate up tick is an aberration and the stock market and rates will go down next year. And we are right back where we were in October 2010. But, I think what we are seeing is the QEII finally starting to work. I think the QEII was less about mortgage rates and more about boosting risk taking by business and investors. Businesses and investors have been hoarding cash for the last two years, since the 2008 market crash. They have been very nervous about investing. But the FED and the administration have been pushing businesses to hire workers and investors to invest. The only way they can do it is flood the economy with cheap cash. Business is all about risk taking. And this was not happening in the last two years. I think the economy has reached critical mass with the last QEII and now businesses will start to hire and it will start a chain reaction of economic growth. Add to this, the tax cut deal and voila, a strong recovery.

@Kennon...major assumption...that there WILL be new hiring...that's highly suspect...AQ has posited that worker productivity will continue to increase through technological upgrades, at the continued expense of the US worker and the attendant consumer market that he/she is a member. THAT's a very long term trend that's been slowly eroding all of US labor markets, white and blue. I could imagine a US that mirrors that of 1960s-1980s Britain...personal tax rates on the rich up to 90% to support every body else...

It seem to me that the "jobless recovery" is simply the product of businesses having better bottom lines due to eliminating jobs. Those are salaries they don't have to pay anymore, so on the surface it appears that they are doing better. The problem is that their business isn't doing better because of more sales or increased revenue. So now you have more unemployed people, and you have businesses that aren't really recovering - only getting by with fewer employees. That will cause production to suffer, so those cash reserves that they have now, which used to go to paying salaries won't even be there as cash reserves next year. As for the Fed flooding the economy with cheap cash, that can only last so long before inflation (the result of money printing) starts to eat up all the benefits of that extra cash. What will businesses do then? They sure won't be hiring - I can tell you that.

She strikes again! I feel like I lose a few more IQ points every time I read Dereje's posts. To Edgar and JOE, very well put. Seriously, the world of "high frequency trading" is a major deal that no one even talks about. Pretty interesting 60 Minutes back on Oct 10, http://www.youtube.com/watch?v=Ht9qwr8DMis Listening to today's weekly coaching call from another well-respected source this morning pointed out a very interesting point regarding the sentiment index of bonds. Back in early August, 80%ish of the market (the "masses") were bullish on bonds, then of course it went on a slide. Now, if you look at your charts, the "masses" are now bearish. Don't cross your fingers, but if the "contrarian theory" proves correct, we're due for a rally.

@dustin, You are the loser LO! Sorry, it is a market that return your life to dismal mood. You sound like cantankerous old person!!!

Mark, Brett and Mo- sounds like you are singing the swan song of American hegemony. I do not think we are there yet. Business will start to hire and the economy will recover. And I happen to think it will come in 2011.

@kennon...that kind of turn around you envision in 2011will barely get started, if at all...corporations that have the cash like the feeling of it under their collective rumps...won't invest/spend when it's cheap, why invest/spend when it gets expensive???? This econ malaise is firm rooted....just tellin' ya.

Could the MODS please ban the IP address for Dereje J? He brings nothing to the table and is pissing everyone off on this forum.

@Jason and Dustin, why you guys are so contentious? I can see luck of honesty in both of you. You both looks like scammers, you both despise honesty. What wrong I did? I shopped a cheaper mortgage loan after I reviewed the market for long time? Did that make you sad? Jason, MODS are not idiots!

I actually agree with Kennon, while I don't think it's going to be a boom recovery, I do think we will see a rebuild. I think everyone needs to get used to selling 4.75 and above. We knew these days were going to come, and we all thought April/May of '10 was going to be that time, but we got lucky and rates came down even further. Those that are u/e better take this last 13 months they have to find work or they are going to get passed by.

eh leave Dereje alone he or she or whatever is just trying to play the role of a loan officer, everyone can dream right? even the bat boy wears the team baseball uniform even though he can't play.

Kennon - I pray that you're right about that.

Do you guys think that pricing will continue to keep getting worse for the remainder of the year or will we have some days where we will atleast get some of the pricing we have lost back? Is it smart to just cut your losses now or is it worth a shot at riding this out a little bit? I have one loan that I floated, which to be honest is a lot better then what I've experienced the last couple times rates shot up like this, and I'm 1 point underwater as of this most recent reprIce. I just don't know what I should do. Thank god it's a smaller loan as compared to most of the loans that I close.

I can't see what you're seeing on better employment numbers. Between TJ Maxx (4,400), Yahoo (600), Kaplan (770), BAE International (1,350) and dozens of other companies there have been lots of lay offs in the last few weeks and this doesn't even factor in all the people that may once again be unemployed after January 1 that were hired purely to help with the extra shoppers for the Holiday season.

CHICAGO, December 1, 2010 – The pace of downsizing surged to its highest level in eight months, as employers announced plans to reduce payrolls by 48,711 jobs in November, according to the report released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc. November job cuts were 28 percent higher than the 37,986 planned layoffs reported in October. It was the highest job-cut total since March, when employers announced plans to cut 67,611 Hmmmmm....

To add onto Steve's post. If you factor in the time it takes California to actually rebound from recessions, I see it being a number of years before we catch up back to where we should be this year. If california wasn't such a large chunk of the nation's GDP, it wouldn't matter, but well reality speaks towards a different conclusion. Simply put, if the worst was already behind the US, the rest of nation's average level of unemployment would be in the 6-7 range, while california's would be down in the 8-9 range. What we have observed instead is the national average go up, despite temp emplpoyees, and california's average go up. I am just hoping it isn't going to get too much worse before it starts to get better.

this is something that should ease your worry. Read this portion of an article from the associated press entitled, Dow closes at highest level since Sept. 2008 Separately, a survey from the Business Roundtable, an association of CEOs of big U.S. companies, showed that 45 percent of executives say they expect their companies to add more workers over the next six months. That's the highest percentage since the survey began in late 2002. Employment will go up alot in the early part of 2011. Enjoy!

kennon the market has nothing to do with the ecoonmy at this point. underemployment is above 20%, higher than it was in the 80s. There is zero tangible evidence that we are in a recovery, far from it. We are much much closer to deflation than inflation, thats what QE2 was about. When the market drops 10% in januaray rumors of Q3 (munis) will start

corey-did you read the entire article? Just put the title into your search engine. If you notice, the article was mainly about the stock market, but it added the word "separately" to show that the two is not necessarily tied together. It is just another indicator that is pointing to a strong recovery.

its not an indicator at that the we are in a recovery The Dow increased a thousand points in 2008 near the end of the year and then went to a 10 year low in march 2009 CPI, PPI, underemployment, annual retail sales, employment, #of those not searching for employment, housing market all negative. 5x as much evidence against a recovery as there is for it

corey- you are right. There are more indicators pointing negative, at this time. But, the overall questions is, are we at the beginning of a strong recovery or are we in the middle of a long and sustained downturn? What I am saying is that the overall economy will roar back in 2011. It may be artificial and more of a bubble, but it will come back.