Pascal
06-05-2013, 12:48 PM
The market is going down on an interest rate issues, specifically real-estate related.
We can see below that for the last 10 days, the 20DMF selling pressure has closely followed the selling pressure on VNQ (and the buying on SRS.)
18678
18679
18676
However, T-Bonds continue to attract money (safe haven trade, with the Fed to backstop sell-offs)
18677
18675
Since banks borrow at 0%, we could think that they would make a killing by lending at an increased rate.
However I think that banks still own much real-estate that they did not sell yet. Increase rates mean that properties values diminish. But who really cares: they are not marked to market anyway.
Pascal
We can see below that for the last 10 days, the 20DMF selling pressure has closely followed the selling pressure on VNQ (and the buying on SRS.)
18678
18679
18676
However, T-Bonds continue to attract money (safe haven trade, with the Fed to backstop sell-offs)
18677
18675
Since banks borrow at 0%, we could think that they would make a killing by lending at an increased rate.
However I think that banks still own much real-estate that they did not sell yet. Increase rates mean that properties values diminish. But who really cares: they are not marked to market anyway.
Pascal