Danny Salas

Real Estate Radio Today – Jan 4, 2011

Happy New Year from Access Real Estate Lending!

We’re ringing it in with a new radio segment. Listen why Danny Salas thinks FHA 203K Loans are a good opportunity for Buyers and Agents.

 

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Chico, CA Interest Rates Market Report – Economic Influences – April 6, 2010

Great Day To Lock

Fed Minutes Released Today

Later today, the minutes from the last Federal Open Market Committee meeting will be released.  There are two areas of concern that will be listened to particularly. One, will be the reading, or interpretation, regarding the “extended period of time” language that the Fed has been using, to take advantage of the large spread between the Fed Funds Borrowing Rate, and the rate that investment coupons are carrying (like the 4.5% Coupon).  The other area of concern will be the timeline regarding when the Fed will start to consider unloading the $1.25 Trillion in Bonds that they have been buying up, to keep rates down, over the past year and a half.  So, if the Fed was buying, to keep rates low, once they start selling, what do you think will happen with rates?

141 Basis Points Lost

Since the Fed stopped buying Mortgage-Backed Securities, we’ve lost 141 Basis points.  This is a HUGE number!  There’s not much support, from where we are, currently, so expect rates to continue to move lower, however, in a more sporadic fashion.  This morning, for instance, rates “bounced” off of an extreme low.  Traders call this a “Dead Cat Bounce.”  It’s, basically, investors cashing in on their bets, on an extreme low, in the market.  Don’t expect it to last, however.

Treasury Auctions

Today, we have $40 Billion in 3-Year Notes being auctioned.  Remember, with the US Government, not on the sidelines, anymore, things could get interesting.  Tomorrow, $21 Billion in 10-Year Notes will be auctioned, and Thursday, $13 Billion in 30-Year Notes.  Remember that we must take longer term investments seriously, when considering inflation pressures over the course of that longer investment.

Fed Minutes Released Today

Locking Advice

Today is, particularly, a nice day to lock.  I’d take advantage of the “Dead Cat Bounce,” and lock in before the rest of the week’s Treasury Auctions.  Note to be aware of, though…Greece is already requesting that their promissory note (financial aid package) get reassessed, on concerns that interest rates will rise, faster than they though, about a month ago…go figure…

Related Must Reads

What “Extended Period” Means To Banks
Why Longer Term Investments Create Higher Interest Rates

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Chico, CA Interest Rates Market Report – Economic Influences – November 16, 2009

Retail Sales

October Retail Sales came in at 1.4%, compared to 0.9% that was anticipated.  When you take out auto sales, the number, actually, came in at 0.2%, lower than the 0.4% expected.  Not only that, but September’s numbers were revised from a negative 1.5% reading to a dismal -2.3% reading.  These numbers are alarming because Retail Sales Taxes help give states, and the country, money to operate their government.  With lower Sales, there are lower Sales Tax Income Opportunities for governments.  Further hurting the deficits. 

Ben Bernanke Speaks Today

He’ll be talking with the Economic Club in Manhattan.  Any time Bernanke speaks it can move interest rates.  Wonder if he’ll comment regarding when and what the Fed plans on doing to hold off inflation, while trying to deal with interest rates remaing low to help with the economy.  He’s got to have the funnest job in the world, these days. 

Alarming Statement

Kansas City Fed President Thomas Hoenig said this, this weekend, “We still have significant weakness to work through in the economy, in the U.S., and coupled with a rapidly rising level or debt and enormous moral hazard issues, we have a great deal of work ahead of us.”  Statements like this, are kind of what I have been talking about.  The media continues to paint a rosy picture of our economy, and I just don’t see it.  I guess statements like this are what people need to hear, to start thinking twice about pulling out of this financial situation that we’re in, as a country. 

No Auctions This Week

However, there will be an annoucement of what next week’s Treausry Auction amounts will be. 

Related Must Reads

Rates Move on Speculation
The Real Jobs Numbers
Treasury Auction Funds Are Drying Up

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Chico, CA Interest Rates Market Report – Economic Influences – November 12, 2009

25-40-50-Day Moving Averages

As I write, Mortgage-Backed Securities (MBS) are sitting directly on the 25, 40, & 50-Day Moving Averages.  All three averages are sitting almost at exactly the same place.  We, actually, dipped below those lines, however, have rebounded and are awaiting the 30-Year Treasury Auction report. 

Auction Results Will Effect Rates

The 30-Year Treasury Auction should not fare too well.  At the cost of sounding pessimistic, it’s just difficult to have foreign investors like a longer term, when investing in these bonds.  However, to be fair, the 3-Year and 10-Year Treasury Auctions have fared well this week.  This is a somewhat encouraging sign. 

Jobless Claims Getting Better…BUT…

The other news pushing bonds and MBS down is the fact the government reported the number of workers filing new claims for jobless benefits dropped by 12,000 last week.  The four-week moving average of new claims, considered a better gauge of underlying trends, fell by 4,500 for the period.  During the latest week for which data is available (week ended October 24^th) enrollment in extended benefits programs decreased by 28,240 while the Emergency Unemployment Compensation program enrollment rose by 22,400 (somewhat offsetting the decrease).  So, while the media continues to paint a brighter picture of the labor market, I don’t see it.  Particularly coupled with the fact that the new legislation signed by Obama will extend unemployment benefits for the people not working full time.  This will definitely change the outlook of the continuing claims numbers.  We’ll keep an eye on this…

Locking

I think its prudent to lock.  Even with the level of support we have directly under us…I don’t see the 30-Year Treasury Auction surprising us, and the Labor Statistics are being received as joyous information by the media.  Stocks will benefit at the expense of bonds. 

 

Related Must Reads

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