Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – April 8, 2010

Greece's Financial Problems Benefiting US Treasuries...AGAIN

Treasury Auctions “Bid” Well

The Treasury Department conducted its $21 Billion 10-Year Note Auction, yesterday, and the results were surprisingly positive.  Just like your credit risk score, think of it this way; the world is looking at the United States’ “credit risk score,” (FICO Score) and if the world thinks that the US FICO Score is below 740, than interest rates will be higher…So, that’s why it’s so surprising that the auctions have gone well this week. What’s helped?  Greece!  As the market prepares for Greece’s financial woes, again, money pours out of Stocks and back into safe-havens, like U.S. Treasuries.  I’ll take it!

Uncle Sam’s FICO Score

So, why would you expect the United States to have such a low FICO Score?  Think of this:  The US is borrowing and spending like never before.  And there is no exit strategy, or plan, to reduce this spending, or huge deficit.  So, that’s why it’s so curious, as to why the world is interested in our notes.  We’re a big risk…however, when looking at Europe, they seem more of a risk, at times…so, makes sense that money would pour into the safe-haven of U.S. Treasuries.

FHA Apps On The Rise

The Mortgage Bankers of America released the mortgage application index for the week ended April 2, 2010, earlier this morning. They said demand for home purchases squirmed out a 0.2% gain for the period while refinance applications plummeted 16.9%. According to the MBA nearly half of all applications to buy homes were for government loans – the highest share since February 1990.

Fed Minutes Results

Inflation seems to be less of a concern, recently.  According to the Federal Open Market Committee’s Minutes, from their latest meeting, “at the current juncture, the risks to an early start to policy tightening exceed those associated with a later start.”  So, keeping rates low, for the time being, is where the Fed wants to stay.  That’s great news for our current interest rate status, however, managing that risk is, well…risky…as inflation is out there somewhere…and rates will have to increase to manage those inflationary risks…when to pull that trigger, is the position that I’m glad Good ‘Ole Ben Bernanke holds, as opposed to me!

Alan Greenspan Speaks

Our former Fearless Fed Policy Chairman, Alan Greenspan, spoke with The Financial Crisis Inquiry Commission on Capital Hill, indicating that the latest credit crisis is, “the most virulent global financial crisis, ever,” and he’s suggesting that more regulation be in place, in the future, so that nothing like this ever happens again.  Smart!  Always liked Greenspan!

Jobless Claims Increase

The weekly Jobless Claims numbers rose 18,000 to 460,000.  435,000 claims were expected.  This brings me to the fact the Fed indicated, in their minutes, that, “Activity in the Housing Sector appears to have flattened out in recent months…”  My point, here, is that housing will continue to suffer, until the job sector gets better.  Continuing Claims moved lower to 4.6 Million, however, keep in mind that the Emergency Unemployment Benefactors are increasing to a current number of 5.6 Million.  So, 10.2 Million people are receiving some sort of unemployment compensation.  So, lower interest rates isn’t exactly the best solution to moving property…the employment situation is!

Up, Up and Away In My Beautiful U.S. Treasury Security

Locking Advice

Floating into the day makes total sense.  The gettin’s good, again.  While Greece and Europe suffer, our interest rates benefit.  So, we’ll float, for now.

Related Must Reads

Greece’s Financial Woes…When It Started
Type “Greece” into the “Search Site” Engine Above…to Follow What’s Been Happening in Greece

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

This entry was posted on Thursday, April 8th, 2010 at 7:51 am and is filed under Chico Home Loans, Home Buying, Interest Rates. 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.

Leave a Reply

Name (required)

Email (will not be published) (required)

Website