• curiouscat.com
  • About
  • Books
  • Glossary
   
       
   
       

    Categories

    • All
    • Cool (25)
    • Credit Cards (16)
    • Economics (187)
    • Financial Literacy (125)
    • Investing (93)
    • Personal finance (129)
    • Popular (21)
    • quote (71)
    • Real Estate (51)
    • Retirement (27)
    • Saving (43)
    • Stocks (54)
    • Taxes (29)
    • Tips (68)
  • Tags

    Asia banking bonds capitalism chart China commentary credit Credit Cards credit crisis curiouscat data debt economic data Economics economy energy entrepreneur fed Financial Literacy government health care housing inflation interest rates Investing John Hunter Kiva micro-finance mortgage Personal finance personal finance basics quote Real Estate regulation Retirement risk save money Saving spending money Stocks Taxes Tips USA Warren Buffett
  • Recently Posts

    • USA Manufacturing Output Continues to Increase (over the long term)
    • Dazzling Diversification
    • Feds Rethink Rules on Retirement Savings - They Shouldn’t
    • Financial Thanksgiving
    • More on Failed Executives
    • Personal Saving and Personal Debt in the USA
    • How to Thrive When this Bear Market Ends
    • S&P 500 Dividend Yield Tops Bond Yield: First Time Since 1958
    • Redesigning the Global Finance System
    • Financial Markets with Robert Shiller
  • Blogroll

    • Brad Setser
    • Curious Cat Management Improvement Blog
    • Freakonomics
    • I Will Teach You to be Rich
    • Jubak’s Journal
  • Links

    • Articles on Investing
    • fool.com
    • Investing Books
    • Investment Dictionary
    • Leading Investors
    • Marketplace
    • Trickle Up
  • Curious Cat Kivans

    • Making a Difference

Investing and Economics Blog

Asia banking bonds capitalism chart China commentary credit Credit Cards credit crisis curiouscat data debt economic data Economics economy energy entrepreneur fed Financial Literacy government health care housing inflation interest rates Investing John Hunter Kiva micro-finance mortgage Personal finance personal finance basics quote Real Estate regulation Retirement risk save money Saving spending money Stocks Taxes Tips USA Warren Buffett

Personal Saving and Personal Debt in the USA

graph of saving and debt

The whole sorry mess in one picture (including chart) by Philip Brewer

Take a gander at that graph. The green line is personal savings. The Bureau of Economic Analysis calculates that. It’s just income minus spending–the obvious way of figuring saving. The red line is debt. The Federal Reserve calculates that value. The value on the graph is the change from the previous year–that is, it shows each year’s new debt, just like the green line shows each year’s saving. Both values are adjusted for inflation–the graph is in billions of (year 2000) dollars.
…
Starting back in about 2005, the American consumer reached the point that they could no longer service ever-increasing amounts of debt. That led to the housing bubble popping. The result is what you can see in the last datapoint on the graph–less new borrowing in 2007.

Related: $2,540,000,000,000 in USA Consumer Debt - Americans are Drowning in Debt - save an emergency fund - Financial Illiteracy Credit Trap - posts on saving money

November 25th, 2008 by John Hunter | Leave a Comment | Tags: Personal finance, Saving

30 Year Mortgage Rate and Federal Funds Rate Chart

More dramatic evidence that changing in the federal funds rate do not lead to similar changes in 30 year fixed mortgage rates. It is true the last few months are very unusual times for the credit market. However, the current lack of correlation is not the exception, the graph clearly shows there is very little correlation between changes in the two interest rates.

30 year fixed mortgage rates and the federal funds rate 2000-2008

Related: historical comparison of 30 year fixed mortgage rates and the federal funds rate - Affect of Fed Funds Rates Changes on Mortgage Rates - posts on financial literacy - Jumbo v. Regular Fixed Mortgage Rates: by Credit Score

For more data, see graphs of the federal funds rate versus mortgage rates for 1980-1999. Source data: federal funds rates - 30 year mortgage rates

November 4th, 2008 by John Hunter | Leave a Comment | Tags: Economics, Real Estate

3 Month Treasury Bill Yield Reached .03%

On Wednesday of last week the United States 3 month treasury bill yield reached .03%, yet another remarkable chart from the current crisis.

chart of 3 month treasury bill yield

via: No one wants to hold risk … - “I guess this is what a close to systemic financial crisis in the US looks like”

Daily Treasury Yield Rates show that the rate for Friday the 12th of September 1.49%, Monday the 15th 1.02%, Tuesday .84%, Wednesday .03%, Thursday .23% and Friday .99%.

Related: Corporate and Government Bond Yields - Curious Cat Investing and Economics Search - Credit Crisis Continues (April 2008)

September 22nd, 2008 by John Hunter | 1 Comment | Tags: Economics, Financial Literacy

Corporate and Government Bond Yields

graph of 10 year bond rates

Over the last 2 months the yields on bonds have increased the discount rate has continued to decline.

The spread between corporate bond yields and government bonds has decreased a bit as treasury yields have increased 37 basis points compared to just 4 and 6 basis point increased in corporate bond yields.

Data from the federal reserve - corporate Aaa - corporate Baa - ten year treasury - fed funds

Related: Bond Yields 2005-2008 - 30 Year Fixed Mortgage Rates versus the Fed Funds Rate - Initial Retirement Account Allocations

June 16th, 2008 by John Hunter | 1 Comment | Tags: Economics

Fed Funds Rate Changes Don’t Indicate Mortgage Rate Changes

The recent drastic reductions again emphasize (once again) that changes in the federal funds rate are not correlated with changes in the 30 year fixed mortgage rate. In the last 4 months the discount rate has been reduced nearly 200 basis points, while 30 year fixed mortgage rates have fallen 18 basis points.

I have update my article showing the historical comparison of 30 year fixed mortgage rates and the federal funds rate. The chart shows the federal funds rate and the 30 year fixed rate mortgage rate from January 2000 through April 2008 (for more details see the article).

30 year fixed mortgage rates and the federal funds rate 200-2007

There is not a significant correlation between moves in federal funds rate and 30 year mortgage rates that can be used for those looking to determine short term (over a few days, weeks or months) moves in the 30 year fixed mortgage rates. For example if 30 year rates are at 6% and the federal reserve drops the federal funds rate 50 basis points that tells you little about what the 30 year rate will do. No matter how often those that should know better repeat the belief that there is such a correlation you can look at the actual data in the graph above to see that it is not the case.

Related: real estate articles - Affect of Fed Funds Rates Changes on Mortgage Rates - How Not to Convert Equity - more posts on financial literacy
Read more

May 7th, 2008 by John Hunter | 1 Comment | Tags: Cool, Economics, Financial Literacy, Personal finance, Popular, Real Estate, quote

Bond Yields 2005-2008

graph of 10 year bond rates

From January 2005 to July 2007 the Federal Funds Rate was steadily increased. The rate was held for a year. Since then the rate has been decreasing (dramatically, recently). As you can see from the chart, 10 year bond yields have been much less variable. The chart also shows 10 year corporate bond yields increasing in February and March when the federal funds rate fell well over 100 basis points.

Treasury bond yields are down but a huge part of the reason is a “flight to quality,” where investors are reluctant to hold other bonds (so they buy treasuries when they sell those bonds). Therefore other bond yields (and mortgage rates) are not decreasing. I guessed last month that the data “may well decrease some for both 10 year bonds once the March data is posted” which wasn’t the case. But I was right in “expect[ing] the spread between treasuries be larger than it was in January.”

Data from the federal reserve - corporate Aaa - corporate Baa - ten year treasury - fed funds

Related: 30 Year Fixed Mortgage Rates versus the Fed Funds Rate - After Tax Return on Municipal Bonds

April 30th, 2008 by John Hunter | 2 Comments | Tags: Economics, Financial Literacy

Comments

Copyright © Curious Cat Investing and Economics Blog

    Personal Finance

    • Credit Card Tips
    • IRAs
    • Investment Risks
    • Loan Terms
    • Saving for Retirement
  • Archives

      All Posts
    • December 2008
    • November 2008
    • October 2008
    • September 2008
    • August 2008
    • July 2008
    • June 2008
    • May 2008
    • April 2008
    • March 2008
    • February 2008
    • January 2008
    • December 2007
    • November 2007
    • October 2007
    • September 2007
    • August 2007
    • July 2007
    • June 2007
    • May 2007
    • April 2007
    • March 2007
    • February 2007
    • January 2007
    • December 2006
    • November 2006
    • October 2006
    • April 2006
    • March 2006
    • January 2006
    • December 2005
    • October 2005
    • July 2005
    • May 2005
    • April 2005
    • April 2004
TopOfBlogs