Wednesday, December 16, 2015

How banks screwed the Fed.

Everyone seems to think the Fed should have raised rates a year or two ago. The truth is that banks haven't really made money in a long time. There was a point when the economy looked much stronger and banks took a sliver of opportunity to raise rates without the Fed. They tipped rates almost to 4.50%. That must have roughly been in 2013.  The market has never recovered from that. I talked about it here back in May.

4.50% has always been the pain line. I've probably blogged about it more than anything else I've blogged about. Refi's are DEAD. At 4.50% - there is no refi market in my opinion.

I haven't even checked the rates today yet because it been hectic, but most rates yesterday were in the 3.80%ish range. So, everything is solidly over 4% now. At least.

I don't really know what happens - but I know what has happened every single time rates get well above 4%. Good luck with all of that.

3 comments:

sth_txs said...

http://www.visualcapitalist.com/9-4-million-more-americans-below-poverty-line-than-pre-crisis-chart/

http://www.visualcapitalist.com/most-americans-reached-peak-income-more-than-15-years-ago/

Anonymous said...

I've thought a lot about link #1 and have come to the conclusion that the shift from middle class to poverty is 100% the result of Obamacare. Looking at this from the perspective of an employer, it used to be advantages to offer a full time job to one individual. Now if you split the jobs into two part time positions then you can save 15 - 20%. As noble as it may seem to have corporate America pay our Doctor's bill the result has been balkanization of wages at full time earners expense. DF

she_said said...

I'm not even sure why corps bought into this crap. Health care used to be a recruiting tool. You recruited the best by giving them the best health care beni's. Why they would give up this leverage I will never understand.

As far as the middle class - there are many reasons it's languishing. Too many for one reply. Sometimes it starts with generational change. Baby boomers watched how hard their parents worked slaving away in factories and didn't want their kids to live a life of back breaking work. So they sent them all to college. We'd export all that back breaking work to other countries instead. And now manufacturing in America is almost dead. All those EPA rules don't help. But for the most part - America made this choice. Not the politicians. People have to change to reverse this course. To some degree we only have ourselves to blame for this stagnation.