CT Mortgage Blog

02/13/2009

February 13th, 2009 11:41 AM

The market is a little squirrely today. There's a lot of variables right now in Obama's administration and trying to get people to take the positions that need to be filled. As he tries to create a bi-partisan representation, many of the republicans are passing. This is making it difficult to fill all the holes needed to get these bail out plans solidified. Although the biggest republic objection so far is that there is so much useless funding out of this bail out money, that the right winged representatives feel it's over spending and true to form to the typical Democratic ideals.

Taking politics out of the mix...treasuries are taking a slight bath. The 10 yr is down 38 bps so far in trading today. Mortgage backs are dancing like a circus bear on skates. At 8:30 we saw a 12 bp rebound, but as the market open that shifted to a -16 bps as pricing starts to get released from investors. We're down 33-38 bps from the pricing windows at 10:30 and 11:00 yesterday, but most of that was taken out already with late day repricing from everyone as we trailed off in the afternoon. There's lots of talks of stock market stagnation, and some saying the DOW could even hit a bottom of 6,000. Theoretically that would be wonderful for rates, but they're talking maybe a year of this. That's mainly due to this stimulus plan offering nothing to drive stock prices. But it is curtailed to stop the massive deterioration of jobs. Considering Disemployment fears would keep people from borrowing new debt, that needs to be corrected before any mortgage backed injections will even matter much.

Lastly, considering markets are closed Monday I don't expect crazy movements in the forms of improvements since most investors sell off into the weekend and ante up in the beginning of the week. The stimulus bill also won't be to Obama's desk until this weekend so that's what everyone is waiting for. A little ironic that it may be released on Presidents Day.

The NY Fed has been continuously buying up mortgage backs and YTD have purchased $115B!!! Yet all these mystical low rates have yet to reveal themselves. Where's all your guidance now analysts??? Probably curled up in the bathroom in the fetal position crying to their significant other that everyone at work is questioning their knowledge.

Well that's our opinon, for what it is worth. Have a wonderful weekend, be thankful for what you have and try to go out of your way, if able, to help someone in need.

Posted by Edward Woodhead on February 13th, 2009 11:41 AMPost a Comment (0)

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February 11, 2009

February 11th, 2009 11:59 AM

There's some interesting stuff going on in the market. The idea of a "bad bank" taking over toxic assets has pretty much been shpt down. That's bad for wall street, but when wall street investors have less options they start to look to mortgage backed securities again. There's even an emerging interest in Jumbo loans again. GMAC has mentioned they'll be jumping back in soon and many others may follow. The government is also thinking this bail out needs to be mainly focused on buying $1 Trillion in mortgage backed debt from Freddie / Fannie / & Ginnie Mae. These comments are why you've seen some improvements in pricing. But the interesting part is we keep hitting these walls of resistance. All day yesterday and even this morning we're seeing major improvements in mortgage backs, and then an hr or 2 later a sell off bringing us right to where we started. Each day we're pretty much opening at where we were the previous day after that one day of roughly a 50 bp gain. But I think that as much as we hit that wall, it's showing support to improve. ESPECIALLY if the government does go back to the original game plan.

We still have yet to hear from Treasury Sec Tim Geithner about the game plan on the TARP money, and at 12:00 today the senate votes on a $800B stimulus package. Then at 1 PM today Bernake speaks to the House Financial Services Committee about the FED plans to inject liquidity. We also have a Treasury Bond Auction issued on 3 yr T bills for $32B which could shape the direction of trading. So tax payers, get your check book out cuz this may be an interesting day.

And that is our opinion of the day...

Posted by Edward Woodhead on February 11th, 2009 11:59 AMPost a Comment (0)

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Monday, Feb. 9th, 2009

February 9th, 2009 1:05 PM

We're pretty much just ticking a long sideways. A few ticks up...then a few ticks down. A passed bill is most likely what will break that trend. There's a lot up in the air regarding new TARP money, stimulus plans, etc that are delaying any real movement. Plus there's LOTS of junk in this stimulus that is long term spending that doesn't help the economy ever, but the democrats are pushing for some play money which is causing delays. This week a little light on data as well. Obama will be speaking publicly tomorrow, and he's likely to address some of these "up in the air" topics and create some market movement. Bernanke will be discussing tomorrow at 1 pm some of the plans for Government injection into the financial markets. It's most likely going to be a volatile day. The December Goods and Services Trade Balance numbers will come out weds, which shows trade deficits in relation to fluctuation to the dollar. The most important report all week gets posted Thurs which is the January Retail Sales. Sluggish sales show a consumers lack of confidence in spending, and US Consumable spending makes up 2/3 of the US Markets.

Posted by Edward Woodhead on February 9th, 2009 1:05 PMPost a Comment (0)

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