Okay Chatterers. I'm far from a financial guru, but I have some knowledge and opinions and I'm willing to bounce them off of people here to let me know if I'm on the right track or if I'm loco.

I'd like you to do the same.

Here are my 2 thoughts for the day.

First, the Fed announced a plan to buy a gazillion T-bills or whatever it was. Big shit, I don't really care, HOWEVER, it's my understanding that mortgage rates are somehow tethered to the APY of T-bills. This flooding of the T-bill market should cause APY to decrease and consequently mortgage rates should fall. So my question is when will the max affect be put on the APY, is it instant, or is it spread out over the life of the T-bill (which is a year I think)? Basically, should I refinance now, or in a year? FWIW I have a very good rate (4.875%) now so I don't really want to go through the hassle unless it's truly the bottom of the rate cycle.

Second, due to the moratorium and the slow recovery of companies to get back to status quo in the GOM (where 25% of domestic oil is produced) there will be a shortage of oil supply in the future, IMO. With my limited knowledge of these things this slow down will not be immediate, it will be slow to set in. Knowing that 3 years is about what it takes to bring a newly discovered oil well online in the GOM I'm predicting a spike in oil price similar to that of the 2007-08 spike in the 2013 time frame.

j_crazy;554877 wrote:...

First, the Fed announced a plan to buy a gazillion T-bills or whatever it was. Big shit, I don't really care, HOWEVER, it's my understanding that mortgage rates are somehow tethered to the APY of T-bills. This flooding of the T-bill market....

The Fed buying debt notes doesn't flood the market with notes but rather reduces the amount available to investors. On the other side of that coin is that it injects more money into the economy by the pure nature of the money used to purchases the debt from the owners.

As far as your theory on oil prices, I doubt you really have any inside advantage. Most of that future potential shortage has already been priced in.

Cue LJ to come tell me I know nothing about oil because I don't work in the industry.

sleeper;554996 wrote:As far as your theory on oil prices, I doubt you really have any inside advantage. Most of that future potential shortage has already been priced in.

Cue LJ to come tell me I know nothing about oil because I don't work in the industry.

wasn't trying to say i had an advantage, but was predicting a spike.

you're probably right though about it already be accounted for.

My cat's breath smells like cat food.

j_crazy;555029 wrote:wasn't trying to say i had an advantage, but was predicting a spike.

you're probably right though about it already be accounted for.

I mean it can't hurt to speculate, just don't bet the farm on it. I have a few holdings in Oil companies, and they've been experiencing quite a high increase in price.

My financial musings tend to be more on the line of: "If I have money, I can buy booze and weed and be happy, so let's obtain money!" instead of what's being discussed here.

So, potato.

j_crazy;554877 wrote:This flooding of the T-bill market should cause APY to decrease and consequently mortgage rates should fall. So my question is when will the max affect be put on the APY, is it instant, or is it spread out over the life of the T-bill (which is a year I think)? Basically, should I refinance now, or in a year? FWIW I have a very good rate (4.875%) now so I don't really want to go through the hassle unless it's truly the bottom of the rate cycle.

I've been watching this for awhile now, I really do not see how rates can fall any lower. We are going to re-fi next week.

So what can people really expect for an interest rate right now? I mean, if you go to a bank or truly reputable broker, what I could expect to be quoted? I have pretty good credit, and I re-fied for 5.25 back in the winter when I thought it wouldn't get much lower. Could I get it down to 4.25 if I went in again, or is that just the "advertised number" that gets the conversation started?

jt_13;555764 wrote:So what can people really expect for an interest rate right now? I mean, if you go to a bank or truly reputable broker, what I could expect to be quoted? I have pretty good credit, and I re-fied for 5.25 back in the winter when I thought it wouldn't get much lower. Could I get it down to 4.25 if I went in again, or is that just the "advertised number" that gets the conversation started?

I've seen 4.17%apr on some websites.

One month ago...

FHA - 4.25%
USDA- 4.39%
Refi - low 4's

3.5 for 15, 4 1/4 for a 20, 4 3/8 for a 30.