Mortgage rates spiked to 6.75 percent on Wednesday, only today sliding back into the 6.5 percent range (these rates with no loan fees). There is good reason to expect rates to fall back, and maybe a long way, but only in the context of effective intervention by federal authorities. There is no sign of such intervention at the moment. However, developments soon ahead will attract the attention of officials preoccupied with market solutions, ordinary monetary operations, opposition to any form of "bailout," wishful thinking, denial, or the view from any of several ivory towers. This week marked the transition from a relatively orderly seven-month repricing of credit and reduction of leverage to fire sale -- just plain panicked dumping. The Fed's number one responsibili...
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