April 29th, 2011 9:20 AM by Eric Fang
It's very interesting to read Malcolm Gladwell's"What the Dog Saw". I am more interested in the partthat when the people communicate with each other, there is "other minds" problem.
Recently, I got a lot of phone calls and emailssaying that I predicted right on the ARM rateshit the history low again, even when the ratewas very high the end of 2010 & beginning of 2011.And if you check the blogs, someone questioned me about those as well.
Even for the rate trend, some readers got the impression that the rates will go even lowerand decided to wait for a lower one. What I am trying to say is that no one want to missthe current low rate, and there are not muchroom down from here(2.5%-2.625%). When the ARM rates around 2.25%, most lenders will not make money.So 2.375% should be the bottom of the ARM conforming rates.
Also, for the rate trends, I always like to say"it's trading within the range". For us mortgagebrokers, since we work on 10s or 100s loans at thesame time, we lock the rate as the clients agreed.It could be locked higher or lower, depends on the market. For any one loan, it's just one loan for mebut it's his clients' 100%, I can understand theirneeds for the lower the better rates. And that's another reason I analyze teh rate trends.
This reminds me of some fund managers. It should benot their intention to have the riskier investment for higher returns. They should invest as their clients agreed to, some like take higher risks, some likeconservatives.