Hi everybody.  Well once again Fed Chairman Ben ‘Helicopter Ben’ Bernanke is throwing more of our borrowed money out of his helicopter in the third – and hopefully final – round of quantitative easing, or QE3.  This time its open-ended purchases of mortgage backed securities until the labor market substantially improves…whatever that means.  Many economists think until the target unemployment rate approaches 7%; which is far from clear given the unemployment rate has been over 8% for four years, fewer jobs are being created than people dropping out of the job market, and there are 3.5 unemployed people for every full time job opening.  Look for some creative numbers and rationalization as they continue to debase the currency.

Prior to the Fed’s move, lenders were studying the impact of this week’s g-fee increase; you may recall last April’s increase was the equivalent of a mortgage tax on borrowers to fund the payroll tax cut – another costly long term solution to a short term problem.  This time, depending on your view, it’s either a cost increase to mitigate secondary market risk, or a housing tax rationalized by the existence of the mortgage interest deduction.

Regardless of how you look at it, mortgage rates increased by an eighth of a percent this week – with no market movement.  Add that to the increase in April for a combined increase of roughly one quarter percent – in rate – over the last six months.

But we’re not really seeing it, or talking about increases – since it’s in the shadow of the Fed’s intervention … eventually we will just a matter of time.