-
5 Attachment(s)
Interest rates
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.)
[ATTACH=CONFIG]18678[/ATTACH]
[ATTACH=CONFIG]18679[/ATTACH]
[ATTACH=CONFIG]18676[/ATTACH]
However, T-Bonds continue to attract money (safe haven trade, with the Fed to backstop sell-offs)
[ATTACH=CONFIG]18677[/ATTACH]
[ATTACH=CONFIG]18675[/ATTACH]
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