Bond Market Takes Hit After Bush’s Announcement
It seems the vague announcement of government intervention is having an affect on the economy, unfortunately it’s a negative affect! Bloomberg has the latest:
President George W. Bush’s plan to freeze interest rates on some subprime mortgages may prove to be a cure that breeds another disease.
“If the government goes in and changes contracts it will definitely have a chilling effect on the securitization of mortgages,” said Milton Ezrati, senior economist and market strategist at Lord Abbett & Co. in Jersey City, New Jersey, which oversees $120 billion in assets. “When the government comes in and says you have contracted to have this arrangement and you can no longer have it, I think it opens the door for lawsuits.”
This is going to make interest rates rise across the board, even for those looking for loans as specialized as a Utah Home Equity Loan.
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