Emotionally Charged Global Markets Equal Unpredictable Mortgage Rate Forecasting

Real Estate Technology with BoomTown

This post has been amended from its original version, which was deemed to have contained 'hate speech' directed toward women.  Sorry if I offended anyone, people who know me know this was never the intent as I have an immense respect for people regardless of sex, race, religion, sexual orientation, political views, affinity for certain animals, foods, fonts, music, clothing, etcetera etcetera etcetera...

On with the new post...

Once upon a time there were some pretty reliable indicators when it came to forecasting the near future trends of mortgage rates.  Non-farm payroll, unemployment, housing starts, the Consumer Price Index and other such macro view reports we’re accurate arrows in a mortgage professionals quiver when it came to ‘predicting’ mortgage rate movements.  Stocks, their indices and mortgage rates moved in opposite directions.  A bad day for stocks usually meant mortgages rates fell and vice-versa.

Well you can throw all that logical stuff out the window.

There are days when stocks rise and rates fall.  There are days when rates rise and stocks fall.

I pride myself on staying pretty up to date with what goes on in the financial markets, particularly their actions subsequent effects on prevailing mortgage rates…and I have no freaking clue where mortgage rates are going on a daily or weekly basis, no one does.  Anyone who says they do is guesstimating at best, and my guess is that even the best market prognosticators are maybe 50% correct 50% of the time.  This transcends predicting mortgage rates and into all financial market forecasting...

Its pretty safe to say rates are going to trend upward at some point because they can’t get any lower.  Like any other instapundit I can tell you why they moved the way they did after the fact.  When money en masse moves into Mortgage Backed Securities, rates go down.  When money moves out of MBS positions en masse, rates go up.  Outside of that, there are so many variables effectuating the market, I hereby deem predicting the short-mid term direction of mortgage rates with any sort of consistent accuracy logically impossible.

During a time when most market analysts had interest rates rising due to the Fed's ceasing to backstop the MBS market and looming inflation from printing a trillion or twos worth of new Benjamins, the Euro has been getting its behind kicked all around the world because its connected to the troubled economies of PIIG countries (specifically Greece), subsequently strengthening the dollar causing investors to move to the relative safety of US backed Treasuries.  Couple that with the new Cowboy of Europe (Germany) banning naked short selling due in part because certain financial institutions were creating mortgage investments that are (secretly) designed to fail...and you have market conditions to keep mortgage rates low.  

Yeah, I saw all that coming too...and my great great great great etc. grandfather was Nostradamus.  



Today's markets are emotionally supercharged and unpredictable, akin to a cat-nipped infused kitty cat with a gun, effected by wide ranging global events and as such there is simply no logical way to predict if rates are going to rise or fall on the short and mid term.  Rational economics left with the industrial age and technical investing is quickly following.  Floors, ceilings and other traditional technical investment indicators are being shattered and/or crushed.  These are the days of behavioral economics where cognitive biases rule over rational decisions.  When emotions run high, there’s no telling what happens 4 minutes from now let alone 4 weeks.

If I were in the market for a mortgage, I'd be far less concerned with timing it and just worry about closing the dang loan with rates where they are today...

Disclaimer:  If you are a 'cat nipped infused kitty cat', please do not take offense to my analogy, write a follow up post accusing me of slandering the Felis Catus Order or report me to the management of AR and request to remove my post without contacting me directly first...Im sure we can work it out.

If you would like to read the original, unabridged version of this article it can be found here

Comments (102)

Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Ok so I finally popped over to thexbroker.com and read the original post. All I can say is...why in the world would AR delete that post? I read nothing in it that I found demeaning or insulting at all. Heck I'm married to a estrogen laced PMS’ing bitch. In fact we just celebrated our 25th year together. Her bitchiness is what I love about her.

It's a shame the purpose of your post was dimiished by all the backlash. Maybe that in itself is a reason to be more careful in the future. Not because it's wrong but because we have to try and respect what other's may think. Especially if we have an importanmt message to get across.

Not being PC ruined your article. And that's a shame.

Jun 04, 2010 10:34 AM
Jeff Corbett
BoomTown - Charleston, SC

What I come back to is context, the frame of reference for which words are used.  To your point Maureen: "It's a post about the mortgage market."

I've said in a recent comment that AR is a fascinating petri dish to streak. What I mean by that was just played out and it was fascinating to watch.  

In a factually correct post about the unpredictability of mortgage rates, the main drivers today rooted in financial market Cognitive Biases (or subconscious deviations of judgment,) do just those imperfections perpetuate what has gone on here.

A few people took offense to 4-5 words in an article.  Instead of contacting me to discuss/express the extreme personal displeasure that was apparently felt (or just ignoring the post), these few people decided to make it their mission to empower those words into things that were neither intended nor conveyed one iota.  Others joined this false cause to label me in various posts and comments as a misogynist, obtuse, contemptuous, a 'festering boil that needs to be cut off to get rid of the stink'.

They got my post publicly revoked...to their sheer delight.  What did that achieve?  Three steps back.

Oh, and their posts were framed around why it was important not to denigrate others..? #fail



Jun 04, 2010 01:04 PM
Jeff Corbett
BoomTown - Charleston, SC

@TLW- Lets end with just an: 'Ahh, Fuck It' :)  

'Can you imagine what is must be like to be married to the likes of me.'

I can only imagine but Im sure BB could tell some tall tales :-)

Jun 04, 2010 01:07 PM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Ahh Fuck it:

I should have put this up last time we played ring around the bitch :)



Jun 04, 2010 01:28 PM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Did I ...

Just take a step backwards? Lol. I'm sorry but I love Georgie :)

He wraps it up nicely. All I'm really doing is sharing :)


Jun 04, 2010 01:31 PM
Pat & Wayne Harriman
Harriman Real Estate, LLC (203) 672-4499 - Wallingford, CT
Broker/Owners, Wallingford CT Real Estate

Jeff, after reading your original post on TheXBroker.com and then coming back and reading this homogenized, pasteurized, watered-down version, it saddens me to know that you have been censored in this manner. You were tried and convicted in the court of public opinion and sentenced to the worst fate an author can receive: to have his own original opinion castrated and turned into Caspar MilqueToast. It's clear to most people that you did not write your post with any malicious or hateful intent, but an angry mob bearing torches and pitchforks is difficult to resist. This Pandora's Box that has been opened will be hard, if not impossible to close. Once the first person has been moderated, medicated and adjusted, who among us will be able to continue to write fresh, original and thought provoking content without fear of causing offense and feeling the censor's guilllotine on his neck? I'll most likely be vilified myself for this comment, but it's just my opinion. Anyway, there is a bright side:

even Lenny Bruce was exonerated eventually.

Jun 04, 2010 02:20 PM
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Wow, I thought you guys knew which way rates were going and could tell your clients when to lock.  There was a featured post the other day saying so.  You mean my guess is as good as yours?

To Brian Brady in #30.  There certainly is naked short selling going on.  It's just that you need to be in a special club in order to be allowed to do it.  Study all the information at www.DeepCapture.com and you'll get to see the financial system in a whole new way. 

Jun 04, 2010 03:49 PM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

My sense is that the markets are not driven by estrogen or felines....   A very interesting post and other than offending my cat... very insightful.

Jun 04, 2010 04:35 PM
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

This is kinda sad for you, Jeff. Damned if you are right, damned even if you are wrong. I'm sorry. That's what estrogen does to you. My husband knows it far too well. He knows enough when to stay away and keep his opinion to himself.

I still enjoyed your post. I came to see what the hoo-haa is about but found nothing controversial about the post. The comments were different though. Sent me busy tonight catching up on my b***ching reading.

Jun 04, 2010 04:40 PM
Denise Hamlin, Broker/Owner
Cardinal Realty ~ 319-400-0268 - Iowa City, IA
Helping Happy Clients Make Smart Choices

You're right Jeff. Three steps back. Not a fan of the original post, but a public flogging??

Jun 04, 2010 05:08 PM
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

I've watched this unfold and simply think that it's a freaking shame that a couple of words caused (1) such an uproar in adults who know how to sign up for an online network but apparently don't know how to use the back button and (2) people to overlook the main premise of your post.  I will freely admit that I don't know enough about the mortgage market and how it works - that's why I read you, Jeff, because I know I will get the stripped down, bare bones truth wrapped around an always excellently written post. 

What the hell is AR coming to when the bitching and whining results in a sanitized version of your thoughts?

Jun 04, 2010 06:54 PM
Jackie Hawley
Coldwell Banker Professionals - Oxford, MI
Southeast Michigan Real Estate
I too, went to TheXBroker.com to get the original post after reading about it on another blog. As a woman, I am offended that the original post was deleted. Do women need "daddy" to protect our delicate little feelings? There have been featured posts recently suggesting it's ok to steal photos, posts calling experienced agents dinosaurs who will soon be out of business if they don't get "with it," there are political posts (with nothing to do with real estate)- and they chose THIS ONE POST TO REMOVE?
Jun 04, 2010 07:03 PM
Robin Rogers
Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX
CRS, TRC, MRP - Real Estate Investment Adviser

Hi, Jeff:

I wasn't offended. I read between the lines that you were pretty fired up about this topic and expressed yourself accordingly. You could have worded it differently and it wouldn't have made such an impact.

On the other hand, "all publicity is good publicity"!



Jun 05, 2010 02:15 AM
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

Ah, what the hey...Jeff, I say go back and post the original in all its splendid glory.

We're all going to ---- in a handbasket anyway.

Billie, glad you posted the video. It made my day.

Jackie - Yep, this was the one. The one with the blatant narcissism was not. Oh well.

Jun 05, 2010 04:43 AM
Tim D. Wilson - The Horseman's Agent ™
HomeSalesLexington.com @ Rector-Hayden: Lexington, Kentucky - Lexington, KY

Hi again Jeff,

 I guess this bizarre episode will teach you to ignore the "NLU Index" the next time you are looking for an analogy for inclusion in one of your ActiveRain blogs.

 Safe for analogies on the ActiveRain "NLU (Not Like Us) Index":

  • Lawyers  (safe)
  • Government officials (very safe)
  • Politicians  (infinitely safe)
  • Car Salesmen   (so safe you should always carry around a car salesmen analogy in your wallet)
Any other analogies, and you are taking a risk.

Jun 05, 2010 04:45 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life
Corbett - I had a pretty long comment that I was going to add here last evening, but lost it in the galaxy of cyber space. Point blank, A pretty brilliant piece of prose and important industry insight has now been tarnished. The fact that you've had to defend yourself against some of these folks is ridiculous in my view. Keep on keeping on, man.
Jun 05, 2010 07:55 AM
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

I read the original, saw nothing wrong with it, then this popped up again.

I thought it was over sensative people taking offense at it, and AR apologizing...ridiculous.


Jun 05, 2010 03:15 PM
Allen Shipman
Shipman Partners - Austin, TX

Two thumbs for a great post Jeff.  I think some of the AR members are on the attack just for the heck of it.  I took some of the same crap for a featured post I had about what kind of an agent I am not.  Here are just a few of the things I was accused of or attack about:

  • Religion
  • Not spending enough time with my family
  • Not taking enough personal time
  • Degrading my profession
  • Not following the NAR code of ethics by a poster who violated the ethics in his response
  • Deleting a response that was an all out attack on my personal character by a person that doesn't know me or even live in the same country
  • Picking on agents that still think it is 1980

The thing I've noticed in my short time here at AR is that most of the "Haters" have never posted a blog with an original thought provoking concept.  Like the founding fathers said so eloquently DON"T TREAD ON ME  

Bite Me

Jun 05, 2010 10:19 PM
Jeff Corbett
BoomTown - Charleston, SC

Love the pic Allen and can relate to what you've been through...it happens to me on about every 4th or 5th post ;)  Even though your time on AR has been relatively short, you're spot on in your observations... 

@Sardi- They cant hold me down...will keep on keepin on ;)

@Mike- Its a slippery slope for AR.  A decision was made that they felt was truly best for the community, I can respect that.  The thin-skinned minority has been identified, and that means more to me than having to edit my post.  

@Tim- Filing away the 'NLU Index' for future reference...

@William- 'The original' must reside in its proper place, my own property...thx for your follow up post btw.

@Robin, Missy, Jackie, Lisa, Denise, Loreena, Joan, Wayne and the illustrious TLW- It was a bit crazy, but it hasn't diminished my will to write what and how I see fit :-)


Jun 07, 2010 01:03 PM
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

Happy Birthday to Jeff Corbett! 

Jul 29, 2010 03:20 AM