> Cletus is passing by Billy Bob's hay barn one day when, through a gap in the door, he sees Billy Bob doing a slow and sensual striptease in front of an old green John Deere.
>
> Having seen enough Cletus rushes in and says, "What the heck are you doing, Billy Bob?"
>
> "Jeez, Cletus, ya scared the snot outta' me!" exclaims Billy Bob. Then, obviously embarrassed, he says, "Me and the old lady been having trouble lately in the bedroom department, and the therapist suggested I do something sexy to a tractor."
How is that for misunderstanding? This one had me thinking about how easy it is to have something we say to our clients in a professional setting taken totally the wrong direction. I think careful and concise communication is the key that unlocks this problem.
In the news!
FNMA 3.5% note is DOWN about 300 basis points from its recent highs. We were actually up on the day today about 44bps and the security was trading at $98.56 at the bell.
Rates got a little better today, but are way off lows experienced recently. Purchase money 30 year fixed loans are trading right in the 4.25% range today.
We hope to see some rate improvement tomorrow as well. I don't suspect we will see some immediate inflation as expected in the Consumer Price Index reported tomorrow and that could help ease rates some.
BOUNCE: Remember what bounce is? Bounce is when a market sees some recovery after a severe deterioration in pricing like we have seen over the last several days. Bounce happens when investors see the unraveling investment as an opportunity and buy back into it. Sometimes bounce sticks and sometimes it does not. We saw some bounce today in the bond market.
I am hoping that the hemorrhaging is over in the bond market for a minute. A borrower I visited with today had to lower his expectations by about $20,000 to keep the same payment for a loan he is shopping. (Higher rate = higher payment...so the loan amount would need to be lowered to keep the same payment.)
Gold has relaxed back down to $1338/oz as markets are still waiting for the effects of QE2 to take hold.
Remember that much of the volatility is due to expectations of inflation. We don't see actual inflation for some time from activity such as what the feds are doing with QE2...that is if for whatever reason we actually see it at all in the short term. Make no mistake: I feel like the effects will hit. I just am not sure if they will be what is expected or in the timeline expected.
Cheers!
Chad
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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
