A Fannie/Freddie Treasury guarantee on the way means mortgage rates have fallen, right? The huge spread between 10-year T-notes and mortgages has closed, for sure? All these mortgage-backed securities as good as Treasurys, they're trading the same way? Fannie and Freddie can borrow cheaply, so mortgage rates will be cheap, too? All wrong. This week's mortgage trading removes any remaining dispute about the difficulty facing the financial system, the economy and housing. Mortgage rates have soared to 6.75 percent, up 0.375 percent in a week, the spread over 4.07 percent 10-year notes wider. All long-term rates had a rough week. The CPI jump got the initial blame (1.1 percent in June alone, 5 percent year-over-year), but everybody knew it was coming, guaranteed by $145 oil. Howev...
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