It’s a bond rout.

On December 8, prices for U.S. Treasuries plunged and yields on the benchmark 10-year U.S. Treasury hit a six-month high of 3.33%. That’s a full percentage point higher than the October low. And it’s a shocking 0.76 percentage points above the yield just a month ago on November 8.

It’s not just happening to U.S. Treasuries. Bond prices are plunging and yields soaring for developed economy bonds across the globe. In that same one-month period yields on German 10-year bonds are up 0.62 percentage points, yields on 10-year U.K. bonds are up 0.53 percentage points, and yields on Japanese 10-year bonds are up 0.29 percentage points.

But unless you’ve got part of your 401(k) stashed in an international bond fund it’s U.S. bond prices and yields that you care about. And you should. The drop in bond prices means a climb in interest rates that will affect everything from your retirement planning to your mortgage.

Let’s start with the Why of this big bond market move and then move to the Why you should care.

The reasons for the move up in yields—and down on prices–on U.S. Treasury bonds are pretty simple. Read more

More cheery numbers from the mortgage front

And now its credit-worthy home owners with prime mortgages that are jumping ship.

Foreclosure rates for loans that conform to the guidelines of now government owned Fannie Mae and Freddie Mac have jumped 425% since January 2008. And the monthly rate of foreclosures has accelerated in the last two months, according to Lender Processing Services.

Unlike the subprime mortgages that set off the global financial crisis, conforming agency prime mortgages are held by borrowers regarded as the best credit risks.

There’s bad news and good news in these numbers.

The bad news should be pretty obvious: The last thing that Freddie Mac and Fannie Mae need is more bad mortgages. Read more

Mortgage deliquency rate projected to inch–and I mean inch–downward in 2010

Reassuring news on the home mortgage front: the tide of mortgage delinquencies will start to recede in 2010—unless you live in Arizona, California, Florida, New York or Virginia. Those states will see delinquencies continue to climb next year.

That’s the forecast from TransUnion, the big credit rating company, based on an analysis of credit trends over the last few months.

TransUnion isn’t talking about a big turnaround in the national trend in 2010. Just that mortgage delinquencies will peak in 2010 and then decline slightly. Read more

Danger to banks from commercial mortgages still climbing

Delinquency rates for commercial mortgage-backed securities (CMBS)–that is commercial mortgage loans backed by office buildings, retail stores, hotels, and apartment buildings–that have been packaged into securities and then sold to investors–rose to 3.04% in July, according to Fitch Ratings. That’s the highest level since Fitch began tracking this sector in 2001. Read more