Phoenix Mortgage Rates Report: November 9, 2007- Who’s Afraid of China?
Posted on November 9th, 2007 by Brian Brady
Phoenix mortgage rates were pretty much unchanged this week, exactly as we expected them to be.
The Chinese said that our dollar was akin to a Latin American country’s currency which gave us a minor scare in the mortgage-backed securities markets. We responded by saying that their toys are more dangerous than lead-based paint chips.
We are at war with China, an economic war but a war nonetheless. It’s a war based on cultural differences, like all wars. This war is not about a land grab it’s about fair access to markets. The Chinese want to sell whatever they can to Americans, with a decided price advantage, without offering access to their markets. Yahoo! was the first American traitor when they aided and abetted the enemy for a few yuan.
What does China have to do with mortgage rates in Arizona?
The answer will soon be “nothing”. We feared the ChiComs because of their ability to hoard US Treasuries- China became the 800 lb gorilla that could dump those bonds and drive our mortgage rates in Phoenix up. They did it and nothing happened.
The underlying theme, driving mortgage rates , is the American economy. Ben Bernanke is trying to balance the threat of higher oil prices with a collapsing real estate finance market. The former is inflationary while the latter is deflationary. Expect him to be biased against an economic depression. This means lower rates in the next 6-18 months. In the short term, a C-note for a barrel of crude oil, is keeping rates around the 6% range.
We think it makes sense to cautiously float your mortgage rate until we see what the numbers look like on Wednesday.
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I am afraid of the ChiComs ability to blind our satellites with Billary Clintons’ donated missile guidance technology.
I just pray that Bernanke is sure footed on that tightrope