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A comment on Finally, no bid on mortgage-backed securities. Parent comment

Re:Finally, no bid on mortgage-backed securities by readthenotes1 on Monday June 13, 2022 @12:49AM (#31721283)
Only if you believe rates will go higher and that you can take advantage of those higher rates.

For example, Having assets on a fixed loan of 3% when you can get a CD of similar duration for 3.5% means you are making money by owing those assets and owing that loan.

It is why deflation is such anathema to the financial industry. They don't want anyone but themselves to benefit from financial conditions.

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Re:Finally, no bid on mortgage-backed securities by NhanH on Monday June 13, 2022 @01:17AM (#31721478)
In this example, you are borrowing the CD right?
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Re:Finally, no bid on mortgage-backed securities by MikeDelta on Monday June 13, 2022 @01:26AM (#31721532)
You buy the CD (and give the issuer your money on deposit against the rate of 3.5%)
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Re:Finally, no bid on mortgage-backed securities by UncleEntity on Monday June 13, 2022 @04:01AM (#31722556)
Which is the point of the article, you get 3.5% while the value of your money is -8.6% (or whatever the real rate of inflation is) so in the end you pay the bank to borrow your money.
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Re:Finally, no bid on mortgage-backed securities by ethbr0 on Monday June 13, 2022 @08:29AM (#31724527)
If I follow the analogy right, the value of your debt is -8.6%.

The path to beating inflation is (a) borrowing at fixed low rates before it kicks in & (b) buying some asset that appreciates at greater than inflation rates (or at least paces it).

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