Father Time is slowly but surely shuffling along toward the end of a year investors the world-over will not soon forget.  Next week's holiday shortened trading session will likely see mortgage investors doing little else than squaring up their positions in these few remaining days of 2008.

During the past twelve months everything from Treasury bills to bonds to mortgage interest rates have fallen to record lows. Global economic recession sent investors from every corner of the universe scrambling to park cash in our Treasury and agency eligible mortgage-backed security markets. 

I see reasons to believe there is a better than even chance that once the New Year is upon us -- these same investors will begin to cautiously creep out of their foxholes - sniffing around for higher rates of return than 0.0%.  If the macro-economic numbers in the first-quarter of 2009 prove to be less severe than currently anticipated -- the probability my assessment will be proven accurate will jump dramatically. 

My forecast here could be way-off-base if investors prove to be far more risk adverse than I believe them to be.  Equity and credit investors generally get ahead of economic cycles -- so I don't think it will take more than a couple of trading weeks into the New Year to determine whether I've got it right - or whether I'm wrong. 

Today's conforming 30 year fixed rate is at 5.125%.