Danny Salas

Archive for the 'Interest Rates' Category

Chico, CA Interest Rates Market Report – Economic Influences – March 29, 2010

Volatility Is Back!

Whatta Week!

There is a lot occurring this week.  Wednesday ends the Fed $1.25 Trillion Government Mortgage-Backed Security Purchase Program.  Once that program ends, expect rates to climb a little.  We expect about .25% in rate, as we have already moved approximately .25% higher after last weeks taste of market nervousness, after a not-so-good auction of Treasuries.  Thursday will provide us with the new Jobless Claims Numbers.  This week, the Fed will announce next weeks auctions of 10-Year TIPS, as well as 3, 10, & 30-Year Treasury Note Auctions.  There are FINALLY investors, sitting on the sidelines, waiting to purchase these securities, however, without the U.S. Government purchasing some of them, we’ll have to see where the returns will have to be (yields), in order to capture investors’ attention.  Which translates to higher interest rates!  Finally, we’ll see the Jobs Report Number on Friday.  Due to market volatility, temporary hiring of census bureau workers, and weather across the country, getting better…these jobs numbers could be hot, so if you’re not locking…better have an itchy lock finger.

Inflation Vacation

The Fed’s Favorite Gauge on Inflation, the Core Personal Consumption Expenditure Index (PCE), came in at a tame 0.0%.  This left the year-over-year PCE at 1.3%.  The Fed desires to keep inflation between 1.0 and 2.0%.

Good Friday

With this Friday, being Good Friday, Stocks and Bond Traders will have a small window, in order to cash in, or buy their investments.  When this occurs, it creates shifts in the market that can’t handle the volume.  So, like a hose that gets smaller and smaller, pressure builds and rushes prices to next levels exponentially.  So, Friday’s gonna be a potential mover of markets.

Carefully Float Into The Day

Floating Advice

Careful floating (and I mean careful), could be the theme of the morning.  However, as mentioned earlier…you’d better have a finger on the lock button…volatility is the name of this game.

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Chico, CA Interest Rates Market Report – Economic Influences – March 26, 2010

The Big Room At Sierra Nevada Brewing Company

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra Nevada TODAY!!! Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into the expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans less timely and more difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers. $15.00 AT THE DOOR!

We’ve Settled Down A Bit

Credit market participants are shaking their heads, and trying to recover form a horrible auction week for U.S. Treasuries.  Is the writing on the wall, here, too?  Remember, that without the United States’ Government purchasing Mortgage-Backed Securities (MBS), that’s a major buyer out there, that has left the building, so to speak.  And without a major buyer, in order to attract other investors, you have to offer a greater rate of return…and therefore, greater interest rates.  We lost 88 basis points, alone, on Wednesday.  That’s .875% Points on a loan.  UGLY!  Today, however, things are looking slightly better.  We’ve managed to creep up about 30 basis points.  That equates to approximately .25% Points on a long.  What have I been saying?  Rates will increase once the government stops purchasing MBS, and I suspected anywhere from .25% to .5% in RATE, not Points.

GDP

The Commerce Department reported that Gross Domestic Product (a statistical measure of the total market value of all final goods and services produced in the country) expanded at a 5.6% annual rate, instead of the 5.9% pace estimated earlier.

Non-Farm Payroll Figures

The big news will be the March Non-Farm Payroll figures, that will be release this next Friday.  This will be a touch call.  The expected number is 180,000 new jobs, and the unemployment rate to remain close to 9.7%.  Any move in any other direction could have an effect on rates, however, if unemployment moves down, and the new job creation number moves closer to the 200,000 range…it could have a real negative impact on rates.

I'd Float Into The Day, As We Somewhat Recovered

Locking Advice

It’s probably a good idea to lock your pipeline.  Particularly since the government census workers will be considered in this Friday’s employment numbers.  So, I think the risk is too great!  With the Market settling now, I’d float until we see signs of market worsening.  That could happen any time, next week.

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Chico, CA Interest Rates Market Report – Economic Influences – March 25, 2010

The Big Room At Sierra Nevada Brewing Company

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra Nevada Friday, March 26, 2010. Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into the expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to less timely and more difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers. $15.00 AT THE DOOR!

Appetizers Served: Artichoke Dip w/Crostini and Sierra Nevada/Chico State Farm trio of sausages with pale ale sauerkraut and SNBC’s trio of award-winning mustards, to be served to nice people, at this event!!!!!

Rates Skyrocket!

Well…Yesterday…You know what…hit the fan!  We were busy locking…all morning long…before rates SKYROCKETED!  We lost 88 basis points, throughout the day, however, managed to lock loans when we had only lost 28.  That’s about 0.5% Point Savings on each loan we locked!

What Rates Skyrocketed!

What have I been saying?  When the Fed runs out of their $1.25 Trillion Government Sponsored Mortgage-Backed Security (MBS) Purchase Program…what’s going to happen?  Higher Rates!  Well, the market woke up yesterday, realizing that there’s only one week left in March…not to mention that the Treasury Auctions have not fared too well, this week.  Without the government purchasing MBS to keep rates low, where do you think they’ll go?  Also…there is another auction of $32 Billion of 7-Year Treasuries…if that doesn’t fare well…expect even higher rates!

Initial Jobless Claims

They crept in at a weekly claim of 442,000 while the market expected 450,000.  Be prepared for Friday’s Unemployment figures!  They’ll probably come in pretty strongly, due to better weather around the country, and hiring people for the government census.

Greece VI, (I Believe)

Germany has agreed to help bail out Greece.  This is giving some security to the European Union, and helping boost Stocks in the U.S.

Get Used To Seeing This Picture For Quite Some Time

Locking Advice

Lock, like you’ve never locked before.  Protect your clients and yourselves.  I don’t thing the 7-Year Treasury Auction will fare well, as the others did not and the longer the term, the harder to gain a return, when you factor in inflation.  All signs point to locking!

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Chico, CA Interest Rates Market Report – Economic Influences – March 23, 2010

YOU DON’T WANT TO MISS THIS EVENT!!!Scott St. John will be speaking at The Big Room At Sierra Nevada The , Friday, March 26, 2010.  Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to more timely and difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers.  $15.00 AT THE DOOR!

A Hint On Locking Advice

We managed to climb above the 100-Day Moving Average, yesterday.  This is a huge pyschological step, as the 100-Day has been acting as a layer of resistance for quite some time.  If we can manage to stay above this level, it would make sence to float long escrows, and not lock for longer periods of time, as it would save clients a lot of money. 

Housing Numbers

5.02 Million Units were sold in the Existing Home Sales Category.  That was just in line with where we expected to be, however, the grimmer figures were the exiting inventory numbers.  These spiked to an 8.6 Month level.  Higher than the 7.8 Months reported last month, and close the the 9.2 Months reported last August.  Perhaps the Tax Credit, coming to an end, will help stave off these numbers for March and April.  We’ll have to see. 

Fannie Mae and Freddie Mac’s Future? 

Treasury Secretary Timothy Geithner is speaking to the House of Representatives Financial Services Committee, today.  He’s discussing the reason behind the government take-over of Fannie Mae and Freddie Mac.  He’s expected to comment that had the government not taken over these entities and pumped $127 Billion into the groups, the housing industry would have CRASHED…harder than it already has.  Republicans are looking to privatize the GSE’s, as soon as possible.  While this would be healthy for competition, of course, their idea is that the government can spend too much and not run the entities appropriately.  However, keep in mind…that’s just how we got into this mess, in the first place.  So, a slow transition, is what I believe would be more beneficial to the American People.  Keep in mind…these GSE’s are simply in receivorship, and will be released back to a private status once they’re more healthy.  “AFter reform, the GSE’s will not exist in the same format as the did in the past,” Geithner said.  “Private gains will no longer be subsidized by public losses, capital and underwriting standards will be appropriate, consumer protection will be strengthened, and exxcessive risk-taking will be restrained,”  he pledged.  The public will have an opportunity to comment on these suggestions by April 15, 2010. 

We Are Continuing To Float Into The Day

Locking Advice

As mentioned above…we may as well float, until we see signs that we’ve going to move under the 100-Day Moving Average. 

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