November 16th, 2010 9:59 AM by BILL WILBANKS
Here are just a couple thoughts out on a tangent of their own in my mind this morning...
First the Bond market has been on an upward tear of it's own the last week ending in the worst Friday in months (3 rate/points price changes), yesterday included (4 price changes). It was just Friday 11/5/10, just a little over a week ago that the 10 year bond closed at 2.5051%. It closed last evening at 2.9538% and folks wonder why rates are up in the last week. That's ruffly 45 bps or an 18% increase in about a week. Mixed signals and market knee jerk reactions. Here's an example this morning. The Core Producer Prices for October fell 0.6% (excluding food and energy of course) the biggest one month drop since July 2006, after being up 0.1% in September. Economists (big thinkers in the nether world) expected a 0.1% increase. Headline (what most watch) PPI was up 0.4% last month after economists polled expected a 0.8% increase. Apparently this is the good news side of a falling dollar I guess. But wait a minute, hasn't bacon gone from $4.50 a pound to over $6.00 a pound in the last year and my gas seems to cost me about $5.00 a tank more recently at the pump. Glad there's no inflation.
Wait here's another loose thought...the home mortgage interest deduction. The presidents commission tasked to make suggestions to find ways to cut expenses and reduce the deficit just mentioned a number of third rail items that should go away or be drastically curtailed and one of which is near and dear to most home buyers is the interest deduction on mortgage interest. And we still have a few congress members and senators that want to ride this train. This is about the only real tax deduction left to the average middle income consumer today. Instead of thinking of ways to cut benefits to tax payers and therefore increase the kitty in DC I propose a novel, if not outrageous concept...ready? Spend less of "Our" money. The Federal government has appeared to be trying to wring the last breath from an already punch-drunk real estate industry. Would someone please nudge the congress person over there to wake them up to reality. Get off the consumers back! I have these episodes every now and then. But they pass... Want more?