STEPPING OUT ON A LIMB- LOOKING FOR RATES TO IMPROVE SHORT TERM

Although we are still awaiting details of the treasury's bank bailout plans, my view of the stock and bond markets lead me to expect an improvement in mortgage rates short-term. Technically, the ten year bond is oversold, and I am seeing signs of money buying this bond. Although there is room for 30 year yields to head higher, a turn is coming which should provide a small relief rally(improvement) in bonds and better rates. After a sharp turn, expect a range bound market in bonds with very little day to day change: the fed will be trying very hard to keep rates low. Congress and the Treasury may offer a plan to offer homeowners low rates BUT once again, where is the money coming from?