Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on November 4, 2008

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds: +109bp

Why on earth is it that mortgage backed securities are up over 100 basis points when the DOW is up over 300 points?  Here is one answer…Democrats are expecting major victories today, especially the presidency and that means take your profits now before taxes go through the roof.

Sure, Barack Obama has SAID he wants to cut taxes, but he has also stated 3 different income levels with which those tax cuts apply.  Check his record, though, and you get the exact opposite story, meaning reality is that he is FOR TAX INCREASES, even only by not extending the tax cuts that the Bush Administration put in place.  Taxes such as caps on capital gains taxes, dividends, and even the estate tax are all set to expire and will under democrat control.  Just look at the recent housing bailout bill and you can see they already minimized, or eliminated the capital gains tax exclusion for the sale of your primary residence.

That means we have money flowing into safe havens, like bonds, and into long term investment vehicles.  Stocks may likely be higher simply on the fact that short sellers need to cover their positions before their taxes jump as well.  Looking at history, the DJIA moves higher by 1.9% from election day until the end of the year when a Democrat is elected President.  Compare that to a 4.2% increase when a Republican is elected instead.   

If Obama wins, and especially if the Democrats get a filibuster proof Senate, don’t expect to have a recovery anytime soon, but then again, that is good news for Florida Mortgage Rates.

{ 1 comment… read it below or add one }

Victor November 4, 2008 at 6:50 pm

We sure had a great day today. I am with you on Obama but we should benefit in the mortgage business.

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