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Market Insight
Have you metChad?
Market Insight
Have you metChad?
Fnma 4.5% bond actually had another UP day...closing out in the black 16 bps... The bond traded in a 63 bp range to add to the excitement today...yikes. 30 year rates today improved and we are still in the 5% range there. I took a look at Metlife Home loans JUMBO's today...and see the 30yr fixed is coming in at 6.25%...WOW.
Geithner: Treasury Secretary, Bernanke: Fed Chairman and Peter Orszag: White House budget director all spoke to congress today about the economy.
Bernanke inferred that AIG is being "handled" appropriately after expressing disgust...also that "we" may need to add to the 700 billion dollar TARP program from this fall to further stabilize banks. Too bad there has
not been much accountability there...but hopefully the right things will come together soon. click for more speech highlights
Investors didn't see too much to hold onto in Tim Geithner's speech to congress today...there were not too many specifics. He did mention that we need to "get people working again"...and the housing plan will help 4-5 million households to refinance...and 97% of small businesses
will see tax relief...but not how. Ahh politics.click for more details on this speech...
Feds also announced a new lending program that will aid in lending to small businesses, help fund credit card, auto and student loans. I haven't quite unraveled the "TALF" program (Term Asset-Backed Securities Loan Facility) but it sounds like the New York Fed will lend up to $200 billion to holders of asset-backed securities (high rated ones!). The participants in the TALF program can then leverage the money they receive to fund up to 1 trillion in consumer loans. (Remember that the feds like to see a certain ratio of loans outstanding to assets...and this may have something to do with that. When institutions have more "assets" ($200 billion in CASH lent to them by the feds) they can manage a certain amount of greater debt. Remember the "mark-to-market" accounting that portrayed lower than reality asset values by "appraising" assets of an institution based on "comps" that were "similar" but selling at bargain basement prices at other institutions?
Pending home Sales in January reported DOWN 7.7%...and the bright spot in December was actually revised down to 4.8% from the 6.3% GAIN that was previously reported. The DOWN in January was more than double what was projected. To balance this: less houses are being built. Remember that homebuyers are buying for the long-term and the decision feels bigger than ever to them. Working with someone they can trust is more important than ever.
DOW lost just 37 points...but we are at levels not seen since 1997 already. The "VIX" or "Volatility Index" (fear factor) actually topped out 120 days ago...so the expectation of continued slump is obviously not too scary anymore.
Oil at 41.65/barrel...but futures for a year from now are trading at about 25% HIGHER...what that means is that oil companies ALREADY have sold barrels at a higher price and they just have to sit on what they have for 12 months to get the higher price. We will start to see supply shorting out...and getting shorter than perceived demand. Oil will likely go back up over the next several months despite weakened demand. OPEC is also talking about further supply cuts. Oh yes: who could forget all who stand to profit from "alternative" energy? I have read more than one article proclaiming the return of "green energy" will require oil hitting $200+ per barrel..."by all means necessary". Yes, there is nothing we can do about it...really.
Have a great eve!
Geithner: Treasury Secretary, Bernanke: Fed Chairman and Peter Orszag: White House budget director all spoke to congress today about the economy.
Bernanke inferred that AIG is being "handled" appropriately after expressing disgust...also that "we" may need to add to the 700 billion dollar TARP program from this fall to further stabilize banks. Too bad there has
not been much accountability there...but hopefully the right things will come together soon. click for more speech highlights
Investors didn't see too much to hold onto in Tim Geithner's speech to congress today...there were not too many specifics. He did mention that we need to "get people working again"...and the housing plan will help 4-5 million households to refinance...and 97% of small businesses
will see tax relief...but not how. Ahh politics.click for more details on this speech...
Feds also announced a new lending program that will aid in lending to small businesses, help fund credit card, auto and student loans. I haven't quite unraveled the "TALF" program (Term Asset-Backed Securities Loan Facility) but it sounds like the New York Fed will lend up to $200 billion to holders of asset-backed securities (high rated ones!). The participants in the TALF program can then leverage the money they receive to fund up to 1 trillion in consumer loans. (Remember that the feds like to see a certain ratio of loans outstanding to assets...and this may have something to do with that. When institutions have more "assets" ($200 billion in CASH lent to them by the feds) they can manage a certain amount of greater debt. Remember the "mark-to-market" accounting that portrayed lower than reality asset values by "appraising" assets of an institution based on "comps" that were "similar" but selling at bargain basement prices at other institutions?
Pending home Sales in January reported DOWN 7.7%...and the bright spot in December was actually revised down to 4.8% from the 6.3% GAIN that was previously reported. The DOWN in January was more than double what was projected. To balance this: less houses are being built. Remember that homebuyers are buying for the long-term and the decision feels bigger than ever to them. Working with someone they can trust is more important than ever.
DOW lost just 37 points...but we are at levels not seen since 1997 already. The "VIX" or "Volatility Index" (fear factor) actually topped out 120 days ago...so the expectation of continued slump is obviously not too scary anymore.
Oil at 41.65/barrel...but futures for a year from now are trading at about 25% HIGHER...what that means is that oil companies ALREADY have sold barrels at a higher price and they just have to sit on what they have for 12 months to get the higher price. We will start to see supply shorting out...and getting shorter than perceived demand. Oil will likely go back up over the next several months despite weakened demand. OPEC is also talking about further supply cuts. Oh yes: who could forget all who stand to profit from "alternative" energy? I have read more than one article proclaiming the return of "green energy" will require oil hitting $200+ per barrel..."by all means necessary". Yes, there is nothing we can do about it...really.
Have a great eve!
--
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
