The yield for the 10 Year Treasury note (the interest that the government pays on loans) closed at 3.09% today. This is an all time low as far as my data goes. The way toward the 2-2.5% yield is wide open. I expect to see yields at those levels sometime in 2009/2010. The yield curve will flatten out further since there is little room left for Treasury Bill Yields to drop.
Please see the chart below Click on image to enlarge.
Once again good news on the housing market for the middle class and less fortunate people: Home prices continued to drop across the board, thus making homes more affordable to the average American. The composite index dropped by 19% when compared to September 2007. The two cities with the largest annual declines were Phoenix (32%) and San Francisco (30%). Nationwide home prices are still at 2004 levels so there is still plenty of room for falling prices in the months to come.
Below please find the development of the composite index and the two cities with the largest decline:
Barack Obama, President Bush and Wall Street don’t like to see homes become more affordable to the little guy who works hard, produces, and saves up money. They hate to see opportunities for common people to realize their dreams of owning a home one day. They have pledged to do whatever they can to stop home prices from dropping further. They want to take money away from those people via taxation and inflation in order to prop up home prices.
I have a recommendation for them: Why don’t you start a program that aims at burning down 1/3 of the entire supply of homes in the United States. This will successfully stop home prices from falling sooner or later. If 1/3 doesn’t suffice, just keep firing up additional homes until the supply is low and prices high enough so only the very fortunate people will be able to buy. This, and nothing but this, is the essence of what they are trying to accomplish, intended or not.
The government has introduced a pair of new programs that will provide $800 billion to help unfreeze the market for consumer debt which Treasury Secretary Henry Paulson calls vital to supporting the economy.
Paulson says key markets for consumer debt such as credit cards, auto loans and student loans essentially came to a halt in October. He says the new programs are aimed to get lending back to more normal levels.
Paulson says all the government programs have been aimed at supporting the lending that is vital to the economy.
What? $800 billion? Where does it come from? When did Congress approve this? Is this a joke?
2 months ago they were fighting bitterly over $700 billion and now we have gotten to the point where $800 billion are mentioned in a side note. They have completely lost their minds.
Of course it is merely a coincidence that the main beneficiaries of this measure will be the executives of the largest credit card issuers in the country, the company names at the top of the list appear utterly familiar:
1. JPMorgan Chase
2. Bank of America
4. American Express
5. Capital One
6. Discover Card
8. Wells Fargo
10. US Bank
Nice little Christmas present before they jump ship.