http://www.metchad.com/
Market Insight
Have you metChad?
Market Insight
Have you metChad?
FNMA 4.5% bond down just 9bps today. The Dow was up 500 points... Generally when the Dow has such a jump as we have seen over the last three sessions...there is a serious deterioration in pricing for mortgage backed securities. Thank goodness for the efforts of the fed to purchase mortgage backed securities as they have been doing. China made a statement today that they will continue to aggressively purchase our bonds...which is helping with confidence levels.
Remember the "VIX" or the volatility index I have referenced before? This is a number placed on the "feeling" of investors that is sometimes called the "fear factor". Today the VIX showed at just over 43...over 35 is considered a "volatile market". It has been interesting to see that figure stay so high for so long as it has been between 35 and 50 for most of the last 4 months.
Something interesting is happeing...money is being gathered to accomplish exactly what was deemed a "bad idea" last fall. Remember the TARP? That was a set of funds that were supposed to purchase toxic assets from banks. From the circus that ensued: we rendered that program "different" when it was done. (Remember it was three pages...when Henry Paulson proposed it...and almost 1100 pages when "done") The markets actually reacted positively to this proposal though...
The video below explains an interesting phenomenon where the fed will provide money to the treasury...and "buy" their debt. This is an interesting approach...the fed will sell bonds...then use that money to buy notes that the treasury holds that are considered "toxic". This is the latest commitment similar to the "toxic bank" approach that was hinted at a few months ago (and just like the "TARP" above. Effectively though they are printing coupons with a "promise to pay" like an "IOU"...selling the "promise" to investors...and using the money invested in them to make a very poor investment (toxic assets). I realize that may be oversimplifying this a little bit...and that all the money will not be appropriated that way...but it is interesting. There is also an illustration in the video of what a trillion dollars looks like...interesting. (The video ends abruptly...just as a heads up.) <click> to see it. Raising money by printing it can prove disasterous and the conspiracy theorists are going nuts with rumors of an "AMERO" coming out of this or some other currency supported by a union of a few countries similar to the "EURO". Hmmm.
The Dow moved nearly 500 points higher, gaining 497 to close at 7,775 while the broader S&P 500 Index skied 54 points to finish at 822. The NASDAQ Composite Index
jumped 98 points to end at 1,555. The financial and housing sectors were both UP today which led the stock market higher after the National Association of Realtors reported existing home sales increased 5.1% to a seasonally adjusted annual rate of 4.72 million in February vs. a
consensus estimate of 4.45 million.
Some analysts see the improvement in home sales as an indicator that we may be at the "turning point" and pricing could stabilize. Remember that we need to sell off the existing inventory and bring interest/buyers into the real estate market to turn around the declines.
Happy Selling!
Remember the "VIX" or the volatility index I have referenced before? This is a number placed on the "feeling" of investors that is sometimes called the "fear factor". Today the VIX showed at just over 43...over 35 is considered a "volatile market". It has been interesting to see that figure stay so high for so long as it has been between 35 and 50 for most of the last 4 months.
Something interesting is happeing...money is being gathered to accomplish exactly what was deemed a "bad idea" last fall. Remember the TARP? That was a set of funds that were supposed to purchase toxic assets from banks. From the circus that ensued: we rendered that program "different" when it was done. (Remember it was three pages...when Henry Paulson proposed it...and almost 1100 pages when "done") The markets actually reacted positively to this proposal though...
The video below explains an interesting phenomenon where the fed will provide money to the treasury...and "buy" their debt. This is an interesting approach...the fed will sell bonds...then use that money to buy notes that the treasury holds that are considered "toxic". This is the latest commitment similar to the "toxic bank" approach that was hinted at a few months ago (and just like the "TARP" above. Effectively though they are printing coupons with a "promise to pay" like an "IOU"...selling the "promise" to investors...and using the money invested in them to make a very poor investment (toxic assets). I realize that may be oversimplifying this a little bit...and that all the money will not be appropriated that way...but it is interesting. There is also an illustration in the video of what a trillion dollars looks like...interesting. (The video ends abruptly...just as a heads up.) <click> to see it. Raising money by printing it can prove disasterous and the conspiracy theorists are going nuts with rumors of an "AMERO" coming out of this or some other currency supported by a union of a few countries similar to the "EURO". Hmmm.
The Dow moved nearly 500 points higher, gaining 497 to close at 7,775 while the broader S&P 500 Index skied 54 points to finish at 822. The NASDAQ Composite Index
jumped 98 points to end at 1,555. The financial and housing sectors were both UP today which led the stock market higher after the National Association of Realtors reported existing home sales increased 5.1% to a seasonally adjusted annual rate of 4.72 million in February vs. a
consensus estimate of 4.45 million.
Some analysts see the improvement in home sales as an indicator that we may be at the "turning point" and pricing could stabilize. Remember that we need to sell off the existing inventory and bring interest/buyers into the real estate market to turn around the declines.
Happy Selling!
--
Chad Schauers
Have you metChad?
MetLife Home Loans
406.522.0922
406.522.0924 (fax)
1924 W. Stevens, Ste. 202
Bozeman, MT 59718
Cell: 406 799 8613
ccschauers@metlifehomeloans.com
