Friday, August 04, 2006

10 year T-note and Real Estate

The chart shows a dramatic break of the support to new lows (4.90%) in yields. The yield on the 10 year T-note is a key item in real estate -- fixed mortgage rates are based on the 10 year T-note yield. So yields are declining and there's plenty of money around. The odds on a "soft landing for housing" is coming closer to reality.

Forget interest rates (which are declining anyway) -- today, the money is there in massive quantities. The Fed has made sure the country is swimming in liquidity. And that, in my opinion, is what's been holding this stock market up. Follow the money -- the money is everywhere. The best example -- the New York and Swiss and Hong Kong auction prices. They're unbelievable. Items are going for 20 to 50% over estimates. Recently, a baseball hit by Barry Bonds was sold to a La Jollan for $221,000. As for Wall Street, billions of dollars are available for attractive deals. New hedge funds are formed weekly, and "name" operators start out with billions in new money.


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