Interest Rates

I’ve been talking for months about locking in your electricity rates as Natural Gas is going to start moving up from here.  Today, Natural Gas rallied another 7% with a huge amount of volume.

But there was also some bad news out there.  Seems the Chinese aren’t buying our bonds, well at least for not what we want to sell them for.

Treasury 30-year bonds fell the most in four months as investors demanded higher-than-forecast yields at today’s auction of $14 billion of the securities with the U.S. slated to sell a record amount of debt this year.“This is a problem,” said Chris Ahrens, head interest- rate strategist at UBS AG in Stamford, Connecticut, one of 16 primary dealers required to bid in Treasury auctions. “The market required a fairly significant discount to buy the bonds.”

Thirty-year bonds have lost investors 20.9 percent this year, Merrill Lynch & Co. indexes show, as the Treasury increases securities sales to help fund a swelling budget deficit. Yields climbed to a six-month high today as the auction drew a yield of 4.288 percent, higher than the 4.192 percent average forecast in a Bloomberg News survey of seven primary dealers. Demand was below average, judging by total bids.

What does that mean?  Interest Rates are going up, and soon.  If you have the ability, now might be the time to lock in a rate to refinance your house.  This will also put pressure on people with ARM’s that are resetting and might cause another wave of foreclosures.  Meanwhile, back in Washington DC, we are spending money like there is no tomorrow (at this rate, there might not be a tomorrow).

Not to be a total Debbie Downer, the Rangers are in first place in the AL West.


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