Real estate market now on life support systems as long bond yield touches a five-year high
Fred Day
Jun. 9, 2007

The bond market literally crashed with no real bad news. That just shows what we were talking about for the last three years – stagflation. The bond market mega players understood stagnation but forgot the word inflation. Well, they are wrong again. They are chasing the goose. Inflation happened before. The trail end of inflation is showing off now. The bond market collapsed because some bond gurus decided to sell.

The real effect of this is not on the fixed income market but on the real estate market. The 15-year and 30-year mortgages will rise close to 0.75% in the next two weeks. It has already reached levels where many homebuyers in the market have no choice but to abandon their desire to own homes. The new homes and old home sales will plummet badly in the next several weeks.

The prices will collapse after that. Around the middle of August (tail end of summer) you can expect a collapse in the residential real estate market with prices crashing down 25 to 30% unless bond yields recover. The refinancing market is suffering too.

Real estate market now on life support systems as long bond yield touches a five-year high
Fred Day
Around the middle of August (tail end of summer) you can expect a collapse in the residential real estate market with prices crashing down 25-30% unless bond yields recover. The refinancing market is suffering too.
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In a difficult time like this, you should spend three to five thousand dollars to landscape your home very well before you put it to market.
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Real estate price collapse escalating all over United States and is threatening the economy badly
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The accelerating slump in real estate is serious for the economy. The economy can register a negative GDP in the forth quarter. The consumer confidence can crash and small business confidence is already at an all time low.
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Bush wins climate deal for now - G8 will agree on endorsing a United Nations Climate Change agreement in 2009
Media Release
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Bear Stearns Cos. of attempting to manipulate the market for securities backed by subprime loans by purchasing shaky mortgages?
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Sell stocks and buy Treasuries – recession is confirmed and Federal Reserve will be forced to cut rates
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The US Treasuries represent an excellent opportunity at 5% yield. The stock market will go down for the rest of the year and Treasuries will rise.
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