Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – January 28, 2010

Obama's Speech Was Promising

What The Fed…Said…

First, the Fed ended up saying, “rates will remain low for an extended period.”  This was good news for Bonds and interest rates.  However, the Fed also indicated that the $1.25 Trillion Mortgage-Backed Securities Government Purchase Program will, in fact, end on March 31, 2010.  After taking a moment to digest all of the information released, Bonds ended up not liking the news, and the market reacted negatively, with interest rates increasing approximately .25% Points in cost.

Barack Did The Talk…

Last night President Barack Obama gave his State of the Union Address to America.  One of his main theme’s was jobs creation.  This would be the driving force behind real estate and a much more healthy economy.  Jobs is the true answer…not just low interest rates.  So, it will be interesting what the Senate can agree to to move the country forward.  Regarding his comments on more regulation regarding the Big Banks.  There is a lot of controversy into how this will effect the economy.  The arguments stem from more regulations mean less jobs and less investment opportunity and growth.  Cow Dung (to put it nicely)!  Less regulation is what led us to the financial meltdown of almost the entire world.  The Big Banks can afford to pay Billion of dollars bonuses…they can afford to refund tax payers!  I agree…and if you don’t…tell me…what DID lead to the Mortgage Credit Crises?  I’m listening!

Treasury Auctions Are Kinda Rockin’

So far, this week, the Treasury Auctions have panned out fairly well.  This is good news.  There is a $32 Billion Auction of 7-Year Treasury Notes, today.  This is a longer term, and therefore, harder to sell at today’s yields, however, let’s see how it lays out.

Initial Claims Is To Blame

470,000 new claims were reported for last week.  450,000 were expected.  So, this is higher than we thought, however, it’s a little worse than just that.  Extended Benefits can continue for 99 weeks.  The Extended Benefits numbers are not included in the Continuing Claims numbers, that are currently reported at 4,602,000.  The estimated for people obtaining Continuing Claims Benefits plus people obtaining Extended Benefits are 5,600,000.  And that’s what’s being reported…but not by the media…so some estimates have the unemployed at nearly 10,000,000 people.  We better do something about jobs!

Durable Goods Are In The Hood

Durable Goods Items are things like T.V.s…or things that are anticipated to last the consumer over three years.  So, when jobs are bad, usually Durable Goods Numbers are too.  They came in at 0.2% as opposed to the 2.0% expected.  Not a great sign for a robust economy.

Locking Advice

We did a lot of locking yesterday, before banks had a chance to change their rates…after the Fed Announcement.  Now we’re sitting above the 200-Day Support level…so float again, if you didn’t take advantage of yesterday morning’s pricing.

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This entry was posted on Thursday, January 28th, 2010 at 8:44 am and is filed under Chico Home Loans, Home Buying, Interest Rates, Loan Qualification, Weekly Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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