Financial Update by Maurice Soussé

Interest rates are up a touch this week as the stock market came racing back to a Dow closing of 15,237. The 10 year treasury bills pushed up a bit to 2.68 bumping rates about .125% over last Friday.

We are in the 11th day of the government shut down with a time bomb clicking in front of us. October 17th we officially default on our countries debt. In my opinion, they will never let this happen. The repercussions from such an event would be catastrophic driving interest rates sky high. No foreign countries would purchase our T-bills.

The 10 largest buyers of US Treasury Bonds in order are:

  • China
  • Japan
  • Caribbean Banking Centers
  • Oil Exporters
  • Brazil
  • Taiwan
  • Switzerland
  • Belgium
  • United Kingdom
  • Luxembourg

If we don’t pay our debts, they will sell off our bonds in mass quantities. No one will want to buy them as we will have defaulted. Bidders will have to raise the rates to astronomical amounts so that buyers will have a fair return based on risk. We will therefore have a mass meltdown.

Having said that, our politicians and their cabinets are well aware of those facts. That is why I suggest it will never happen. If you watch the news, you are aware that back door deals in Washington are in the works.

Our underwriting times are great right now. 24 hours on conforming, 48 hours on government and 5 days on jumbo.

“Kind words are the music of the world”. Say something nice to a perfect stranger tomorrow and see how much you improve their day….. And yours!!