Hey there! For those who missed yesterday's updates we are now watching the FNMA 4.0% bond vs. the FNMA 4.5% bond.
Today the FNMA 4.0% bond coupon is dead even on the day at $100.16.
$70 billion worth of T-notes are on the auction block this week and with all the money staying home in the US, coming home to the US or flowing to the US with financial crisis news abroad we haven't seem much effect yet. Interestingly, as oversold as the bonds seem to be the market is still swallowing them up.
Oil is at $71.37 a barrel still so money is not really coming into that market like it did with Mortgage Backed Securities were in question as a reasonably conservative investment a few years ago. Gold is on the rise again and hit 1255 an ounce for a minute this morning though it is trading at $1247 right now.
Below is an article I wrote this morning. Enjoy!
A friend of mine recently got back from the beautiful Yucatan Peninsula in Mexico. He spent his vacation in a little resort which was located about halfway in between Cancun and Playa Del Carmen. For those of you who have been down there in that area you know that not all of the beach front is white sand and pina coladas.
My friend went to the Yucatan to fish.
The resort he chose was statistically not as busy as others in the area and was secluded. The beach was loaded with Mangrove trees on both sides of the resort area and it didn't take him long to find a suitable place to begin his fishing adventure.
He was fly-fishing in the ocean as the tide was coming in and spotted a barracuda in the surf. Because they are such toothy fish, aren't really fun to catch and generally destroy the fly: he started to pull his line in. He didn't want that fish.
Interestingly, the fish saw the fly and decided to go for it. The faster my friend the fisherman pulled in his line, the faster the fish was going after it.
The fisherman pulled the line out of the water with a whipping motion and the barracuda actually jumped right out of the water after it!
The lesson is in what happened next. You see: at that point in pulling in the line, there was only shore. When the barracuda jumped out of the surf, he landed right on the beach!
Are we ever that single minded like the fish? Are we going after the false promise of something without realizing it and following it with all our might even though it may actually be a "trick" like an oasis in the desert?
On the other hand, one has to admire the Barracuda. He gave his ALL in pursuit of what he wanted.
Are we like the fisherman? Avoiding business that may be a "pain" to deal with or avoiding business that we expect to be one way or another as the transaction progresses?
The rest of the story is also interesting.
The fish was taken care of. As he lay there glistening and flopping in the sand taking on a new texture as the sand stuck to him: the tide was coming in. In a few moments the tide took hold of the fish, washed it clean and allowed him a new chance to pursue something else.
Cheers,
Chad
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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com
