Submitted by Timothy J. Keating, Keating Investments, LLC
Mortgage Rates Go Below Yields on Long Treasurys: “An Impossible Event”
As pre-IPO investors, we are always on the lookout for signs that “animal spirits” are on the rise. Consider the following two interesting data points:
Exhibit A: 30-year fixed mortgage rates (4.17%) dropped below the yields on 30-year Treasury bonds (4.239%) for the first time—ever. Credit for highlighting this freak event goes to Michael Shaoul, CEO of brokerage firm Oscar Gruss: “You have, in theory, an impossible event, which is that the man in the street is paying less interest than the government is.” Click here to link to the article in the November 11, 2010, edition of The Wall Street Journal. Mortgage Rates Go Below Yields on Long Treasurys
Exhibit B: The private equity “dividend recap” is back in force. More to come in our next posting….