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Rate on 30-year loan eases slightly

By Associated Press

LAST UPDATED: 05:34 a.m. HST, Dec 12, 2013

Island Sotheby's International RealtyResidential real estate sales are up at Hawaii resorts this year through June, according to a new report. Among those sales was one oceanfront condominium unit in the Coconut Grove community at Kapa­lua Resort on Maui, pictured, that sold for $4.25 million.

WASHINGTON » Average U.S. rates for fixed mortgages eased slightly this week, remaining near historically low levels.

Mortgage buyer Freddie Mac says the rate on the 30-year loan declined to 4.42 percent from 4.46 percent last week. The average on the 15-year fixed loan dipped to 3.43 percent from 3.47 percent.

Mortgage rates peaked at 4.6 percent in August and have stabilized since September, when the Federal Reserve surprised markets by taking no action. The Fed meets next week and could slow the bond purchases if the economy shows further improvement.

The bond purchases are designed to keep long-term rates low.

A government report issued today signaled growing consumer confidence in the economy at the start of the holiday shopping season, as November retail sales marked the biggest gain in five months.

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HD36 wrote:
If the Federal Reserve wasn't buying $45 billion in Treasuires a month, and $40 billion in mortgage backed securities the economy would have collapsed by now. Interest rates would spike up, as the market would reflect a $6 trillion dollar annual deficit when present value of unfunded liabilities are used. Since bond prices are inverse to their yeilds, a spike in rates would create a rush to the exits around the world. Not only will the 40 year artificial bull market in US bonds come crashing down in the biggest bubble in economic history, but the currency would collapse simultaneously as the Fed is the buyer of last resort. My bet is the Fed is all talk, no walk. They won't taper. They may even increase bond purchases up to $100 billion a month. If the rate on the 10yr moves to a historical norm of 6%, the government payments on the interest would exceed the military budeget! Just think of all the government programs that would have to be cut, regardless of wether you agree or not, simply because we don't have the money. With 75% or more Americans living paycheck to paycheck, and having to deal with higher interest rates, payments, this would be the road to fast collapse. By printing even more QE to hold up the price of bonds, which most banks can now count as reserves, the economy can go into a slower death but a much more dangerous one when it eventually leads to total debasement, debt monetization, derivitive failure, and ultimately hyperinflation. Time to hit the road when you see the 10yr TNX breaking 4.75 which is only 175 basis points away.
on December 12,2013 | 03:10PM
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