Econoblog notes

Somewhere in the Journal today -- in the article about the federal government's promise of unlimited backstopping of Fannie and Freddy despite the fact that they haven't maxed out the $200 billion of support promised them as of yet-- there was mention of the fact that lots of bond market folx are concerned that mortgage rates may go as high as 6% by the end of 2010. Hmmm. I seem to recall that when we locked our rate at 5.75% for our house purchase in 2003 that was a record low rate at the time, or going back to 1961 or something like that. 6% is, historically speaking, very cheap money. Our first mortgage back in 2000 was at 8.625%. The country remains addicted to cheap money as if it were the proverbial glass pipe. Why deleverage under those conditions? The dollar carry trade will live for some time. Until it dies.

Anecdotally, based on what I'm hearing in AA, the job market is improving. People are bitching more and more about their jobs and less about not having them.