Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – Aug 21, 2009

Homes are a’sellin’!

What a nice surprise!  Existing Home Sales were at 5.25 Million, while only 5 Million were expected.  That’s great news, but bitter sweet, when you realize that statistics like that cause higher interest rates.  As I have been noting for three days, it would be prudent to lock. 

Bonds For Sale…Get Your Treasury Notes, Here!

I have also been talking about the Treasury Auction Announcement from the Federal Reserve, lately.  Well, yesterday was the day, and the Fed indicated that they were auctioning off $110 Billion in Treasury Notes next week.  We may be surprised, however, I don’t think those auctions will faire very well.  On Tuesday, the Fed will acution $43 Billion in Two-Year Notes.  Wednesday, we’ll see $39 Billion in Five-Year Notes.  And, finally, on Thursday, $28 Billion in Seven-Year Notes.  With no real foregin appetite for our Bonds, I expect that this will hurt interest rates and that effect may last about two to three weeks.  Maybe even longer. 

Feelin’ It At The Pump

Oil is trading higher than we’ve seen all year.  At $74 a barrel, it might be time to start taking the bus to work.  Or, after my knee surgery, a bike might be a smart move. 

Good ‘Ole Ben Bernanke

Ben Bernanke is speaking in Jackson Hole, Wyoming today.  He mentioned that our economy is “on the cusp” of a recovery.  On the cusp?  How big is a cusp, anyway?  I’m not so optomistic about being on a recovery.  You just wait and see…come October, Third-Quarter economic reports from corporations are going to paint an ugly picture!  Then we should see rates lowering…but who knows for sure!

Chico, CA Interest Rates Market Report – Economic Influences – Aug 19 & 20, 2009

Do You Have A Tough Stomach?

As anticipated, Stocks continued to wriggle their way upwardly, yesterday, while Mortgage-Backed Securities (and therefore interest rates) struggled.  Then, right before the closing bell, MBS shot upwardly and ended the day on a positive note.  We started the day up 38 basis points.  That’s about .375% of a point, on the cost of a loan.  When Bond Values, or Mortgage-Backed Security Values, are up, their yields (and therefore interest rates) move down.  When they’re values are down, yields and rates move up.  By 7:00 a.m. PST, we were only up 25 basis points.  That equals .25% point on the cost of a loan.  By about 9:30 a.m. PST, we we only up about 9 basis points.  That’s almost 30 basis points less than when pricing open and that’s certainly enough to makes re-price their interest rates costs. 

Sup in China?

It will be interesting to see the effects that China’s Stock Market continues to have on the United States.  They’ve lost about 20% of their value over the course of just a couple of weeks.  Stay tuned for Asian Updates in this artcile.

Treasury Auction Is Today

The last time the Treasury Annouced their auction schedule (August 5th), Stock Traders starting shifting money around, nervously, the day before.  That seems to have happened, yesterday, however the surprise was the up swing, at the very end of the day.  Up 25!  So, it will be interesting to see what occurs throughout today.  Be ready for an interesting ride…

Knee Surgery

I’ll be out of the office until Wednesday, August 26.  I have a torn Medial Meniscus that needs repairing, due to too much basketball and turning 41.  I hope to be bloggin’ though, so tell you friends to sign up!

Chico, CA Interest Rates Market Report – Economic Influences – Aug 18, 2009

Rates Making a Turn

As mentioned in yesterday’s article, I stated in might be a good day to lock.  It was.  Even though some favorable inflation numbers came in, we still have fears of the treasury bond sale annoucement that the Fed will be reporting on Thursday.  Another interesting statistic was that housing numbers weaker than expected.  This should have helped rates, but did not.

2009 & 1947 – What They Have In Common

The Producer Price Index (PPI), which measures inflation on the wholesale level, came in much lower than expected.  The Labor Department started collecting data on the PPI in 1947, and over the course of this year, we haven’t reported as great a loss since 1947.  A record -6.8%!  Now that’s recessionary numbers.

Chico, CA Interest Rates Market Report – Economic Influences – Aug 17, 2009

Locking Seems Prudent

I think we’re going to experience a short term increase in rates.  Right now, rates are great.  Stocks have been suffering due to fears of a slower than expected world economyic rebound.  But I think stocks are going to take an upswing, later today.  Couple of things I’m looking at.  The Federal Reserve is set to announce, this Thursday,  that they will have a bond sale.  Since the Mortgage Credit Crisis, every time the Fed annouces a bond sale, interest rates don’t like the news.  If history tells us anything…we’d better learn from it. 

How Much Time do You Have?

We have had a couple of fantastic days, bringing interest rates down to 5.125% with an APR of 5.417%, so again, in a short escrow, with 30 days or less, you might want to lock in.   If you’re in a 60 day escrow, I still think that we are ready for rates to come down, when the third quarter earnings reports are released.