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Comments on: The carry trade and mortgage rates: Shifts and movements http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/ The Visible Hand in Economics Sun, 29 Nov 2009 19:31:15 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Chino Hills Homes http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22083 Sun, 29 Nov 2009 19:31:15 +0000 http://www.tvhe.co.nz/?p=4479#comment-22083 Looking at where the US economy is today after most people over leveraged themselves with a bad mortgage notes. Consumers over spending with credit cards, I would say you are spot on with your analyst. In the US the economy is based in part with how much we can consume, with credit now so tight recovery will be long and slow.

]]> By: Matt Nolan http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22046 Wed, 25 Nov 2009 20:11:07 +0000 http://www.tvhe.co.nz/?p=4479#comment-22046 @Miguel Sanchez

The example is based on a fixed level of risk, and is independent of the yield curve – as that is merely based on expectations anyways.

The key additional issue is regarding the composition of risk. Now I think even this is a relative small issue.

The main claim I hear is that as the domestic interest rate increases, foreign lenders are willing to invest in more risky domestic assests. However, this “interest rate” they are discussing is the risk free rate – and if the risk free return is rising why would the supplier of credit want to take on more risk for less additional return?

The issue stems from the demand side. If an increase in the OCR mainly convinces low risk borrowers to pull out of the market, the composition of lending becomes more risky.

]]> By: Miguel Sanchez http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22042 Wed, 25 Nov 2009 10:22:33 +0000 http://www.tvhe.co.nz/?p=4479#comment-22042 A good start, but it gets more complicated when you try to consider what *the* interest rate actually is. Your example is based around no risk and a single time period (a day, since you’re talking about the OCR). Once you introduce ideas like yield curves and term risk premia, then no amount of semaphoring will help to make things clearer.

]]> By: CreditCards.com survey: Retail credit cards boost rates, cut rewards | TodaysNews http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22029 Tue, 24 Nov 2009 17:33:40 +0000 http://www.tvhe.co.nz/?p=4479#comment-22029 […] TVHE » The carry trade and mortgage rates: Shifts and movements […]

]]> By: Tweets that mention TVHE » The carry trade and mortgage rates: Shifts and movements -- Topsy.com http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22020 Tue, 24 Nov 2009 07:01:56 +0000 http://www.tvhe.co.nz/?p=4479#comment-22020 […] This post was mentioned on Twitter by Matt Nolan, Tammi J Koza. Tammi J Koza said: TVHE » The carry trade and mortgage rates: Shifts and movements http://bit.ly/7BPALp […]

]]> By: Mortgage online » Blog Archive » TVHE » The carry trade and mortgage rates: Shifts and movements http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22016 Tue, 24 Nov 2009 03:34:40 +0000 http://www.tvhe.co.nz/?p=4479#comment-22016 […] the original here:  TVHE » The carry trade and mortgage rates: Shifts and movements This entry was posted on Monday, November 23rd, 2009 at 6:05 pm and is filed under […]

]]> By: Daily Updated Finance Blog » Blog Archive » TVHE » The carry trade and mortgage rates: Shifts and movements http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22015 Tue, 24 Nov 2009 03:04:16 +0000 http://www.tvhe.co.nz/?p=4479#comment-22015 […] See more here:  TVHE » The carry trade and mortgage rates: Shifts and movements […]

]]> By: TVHE » The carry trade and mortgage rates: Shifts and movements | Money Blog : 10 Dollars : Money Articles. http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22014 Tue, 24 Nov 2009 03:00:35 +0000 http://www.tvhe.co.nz/?p=4479#comment-22014 […] Here is the original: TVHE » The carry trade and mortgage rates: Shifts and movements […]

]]> By: Interest Rates » TVHE » The carry trade and mortgage rates: Shifts and movements http://www.tvhe.co.nz/2009/11/24/the-carry-trade-and-mortgage-rates-shifts-and-movements/#comment-22013 Tue, 24 Nov 2009 02:04:52 +0000 http://www.tvhe.co.nz/?p=4479#comment-22013 […] Read the rest of this great post here […]

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