During the week that Ben Bernanke tanked interest rates and got the herd in the Long Bond, I called the bank that holds the remainder of our mortgage and locked in a 4.25% rate. So while I screwed up the TBT (short the T Bond) trade, I think a more lasting benefit will be this opportunity to eliminate my final debt in relative comfort, even as the pay off will not take anywhere near the 15 year mortgage term due to pre-payments.
The appraiser is here right now. I ask "how's biz?" He says "getting better" (good news). I say "Refi or new buys?" He says "oh, refi" (bad news).
Those fearful of the deflation touted by the media and powerful policy makers since the Bond bottomed in the spring are in essence financing the refi'ers, which in turn is helping to provide a component of the would-be QE2 story, as the Fed tells the world it is buying treasuries and herd jumps aboard the trade.
This is like taking candy from a baby, do you see? Peoples' compliance, unwavering adherence to convention and docile financial attitudes are a contrarian speculator's best friends.
