WOW....FNMA 4.5% picked up 47 bps so rates are likely to get better in the morning. Currently we are in the 5-5.25% range on the 30 year fixed product.

$42 BILLION worth of t-notes are to be auctioned off tomorrow and get ready for worsening pricing if the auction does not go too well. If you have loans to lock tonight...it may be wise to consider locking them if they have shorter term closings. This week will see another record breaking amount of t-notes sold.

Dow was about level on the day...

Rumors: There is supposedly a program coming out with money as incentive for people to buy new appliances. $300 million was earmarked for the program earlier this year. The idea: newer appliances use less energy. The facts: most people in a recession do not buy new appliances when the "old" ones work just fine...so the
incentive may work to move product even at the expense of the tax payer.

Another Rumor: The DOW is for sale...it would be called something else but would be the same thing.

Here's one that I have been waiting for: There is talk that the $8000 tax credit will be extended...AND offered to ANY home buyer buying a PRIMARY residence. Talk is cheap... I will be interested to see how that works out.

Bummer: China divested of $25 BILLION in US notes last month...the MOST EVER. The bummer about that: we have to PAY UP...and the only way to pay up is to sell more bonds. The "projected deficit" was INCREASED by almost 3 trillion dollars (27% HIGHER) recently as the White House takes a look at the real expenses vs. money coming in. This is due to people making less money...so paying less taxes and the current unemployment rate being higher than the 8% they were expecting.

Unfortunately, the solution is not more taxes...since people paying more taxes tend to spend less...and then companies make less and employ less people...who will spend less etc. The only real option is for the feds to SPEND LESS. Unfortunately, this is not going to happen until it is a dire emergency.

Have a great eve!

Chad