This weekend's news on the bailout of Cyprus has broken a taboo that will rattle the markets come Monday morning.
What taboo?
Well, as part of the bailout the government is assigning a levy (a tax) on bank deposits. Oh great! So, imagine you put money into a bank to keep it safe and the government puts a 6 to 9% tax on it being there. Yeah, not so exciting as your safety has become too expensive.
The market shift on Monday should send money into U.S. bond markets, including the mortgage-backed securities.
This should help mortgage rates begin a move lower. Let's see what the morning brings.
Articles on this topic:
http://blogs.marketwatch.com/thetell/2013/03/17/cyprus-deposit-levy-shakes-up-markets/
http://www.cnbc.com/id/100561394
BG
www.brettgrendahl.com
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