經濟,財務,統計學,數理科學與政治評論

Dear American Fellows:

  The other issue is about the now much higher American mortgage rate. It is a big issue right now, especially for those Americans who own their houses. They are afraid that the mortgage rate will go even higher but their payrolls can not go up with those mortgage payments. That is the reason why people in America expect the stock market may not go too high for a period of time. Employers do hope the stock market can stay in a range until they have their payrolls been raised by their employees. I know it is a pretty odd thing. But now the 30% American people own almost the whole America. What can you say to the rest part of American people? They own nothing and they may have a lot of payments to pay for. Those people may have student loans, car loans, mortgage and credit card loans or others. They need some promising jobs to pay down all those bills. What they need is a decent life! For those people who own a house and have mortgage to pay, the mortgage rate does count. It is the reason why people hope those financial investors should not leave the bond markets behind. The US authority should rebuild the confidence to make investors all around the world to buy US Tresuries in order to bring down the yield, especially the long-term Treasury yield.

  The issue just leads us back to the most important problem - the lasting of quantitative easing. Now, if the Fed wants to taper the MBS bonds buying. Then all the thing Fed should care about FIRST is try hard to bring down the long-term mortgage rate relating with the long-term bond yield. That is the reason why a lot of people think that it may be a good time to use the policy of operation twist (OT) again. The Fed should buy some long-term bond and short some short-term bond together to bring down the long-term interest rate. We do know that the effect of OT is not as good as QEs from the experience of 2009-2013. But it seems to be a way to ease down the long-term interest rate. Or the Fed should create other strategies to help those people with house mortgages and to ease their burdens this time after the Fed stop to use the policy of QEs such as subsidies to those homeowners who already own the house for years. The US government can extend its unemployment benefits, I do not think it is a bad idea to subsidize those people who both own a house and have decent jobs.

  The USA is the country who respects the market mechanism and wants it to run smoothly for all American people. I think Americans should keep the tradition that way. American people should try hard to help those people with decent jobs to own their own houses and help the others to have some hope for their own nation. The mortgage rate issue should be the first priolrity issue in the coming of 2014 when the US ten-year treasury yield is around 2.88% and the thirty-year jumbo ARM mortgage rate is around 4.57%. It is pretty high for ordinary Americans and they do cry for help lately. How to bring down the long-term ARM mortgage rate without hurting the growth of US should be the first priority issue to the US congress. We do know that the interest rate should not be too low in order to create wrong incentive for corporation to waste the resource for bad business. But we also face the issue if the long term interest rate goes to high and the payroll can not increase with the interest rate, then the home owner may have some trouble for their daily spending decisions. It is the problem American people face.