Well this week it is all about....

RATES!

Basically to say the least, rates are in CHAOS. 

Greece is pretty much going to default, which means that they will exit the European Union, and leave the EU hanging with a $119B bill+.

Now the focue is on Spain, and with them haviing 25% unemployment and huge debts, there is fear that the 3rd largest economy in the EU will default also.

This will really though chaos into the system, and could sink the EU into non-existance.

Ok some charts to digest:

The first chart above is Mortgage Backed Securites, specifically the Fannie Mae 3.50 Coupon.  Notice all the green, Green is good, as green goes up, interest rates go down.  and other than today, thanks mainly to Facebook IPO, we had 12 consecutive days of green. 

So what does this mean:  We have never, ever, in HISTORY, see movement like this.

This has caused interest rates to fall, A LOT.

Today, for a conventional loan, with excellent credit and 20% down, you can actually get a 3.50%, and on a 15 year loan 2.75%.  And for you investors out there, investment loan is 3.875.  Add about .25 for APR to each of those.

The above chart in the 10 year Treasurey Note, 3 months, and WOW, we have been trading below 1.80% for 5 days, and with no end in site.

So someone asked me today, how low rates will go, well...

If Greece officialy defaults, we will probably see the low 3's on 30 year loan.

If Spain defaults, I don't really see a floor.

BUT.....

If the EU decides to bail out Spain, which will be in their best interest, then there will be more focus on US economic numbers, which have all been pretty good, and we could see a rally, i.e. selling of US bonds, which will maybe trend rates back into the high 3's.

My overall opinion, LOCK THEM NOW and don't look back.