Karl's Blog

It is a lock day on rates. Bonds are down 60Bp on the nday over news from Lehman Brothers. I will have more in todays bond report.

Unemployment came in much lower than expected, pushing th ebond down 35Bp in early trading. If your lender has overnight price protection, i would call and have them lock anything you had a contract signed on last night.

More to come in the Daily Bond

Karl Menzer

http://www.menzerteam.com

Wednesday, June 04, 2008

It's another ants in the pants day for bonds. A lot of jumping around but no real direction.  Making news today are worker productivity, the ADP employment report and the ISM (Institute for supply management) report. Worker productivity rose 2.8% last month, a good sign that with fewer employees on the payroll, employers are able to get more from the ones still there.  The ADP report came out today betting on an increase in jobs of 40,000 despite the fact that we have had job losses in the first 4 months of 08.  The ISM also came in better today at 51.7. It's not a strong jump, but anything is better than nothing in today's market.   Remember, a reading above 50 shows growth in the sector. Oil is back in the $123 range thanks to larger than expected gas reserves (yes there is a joke in there folks). The bond is currently down 25 Bo for the day and down 4 Bp since pricing came out.  It has been up as much as 21, and is sitting on the 100 day moving average. I would recommend locking anything that comes in the door just in case. As always, if anything changes, I will let you know.

Karl Menzer

435-849-0212

http://www.menzerteam.com

Coming soon to a lender near you...RETURN OF THE SISA... 100% 620 FICO, WAGE EARNER, ROLLING 30'S OK!!! Naaaa. That is what got us into the mess in the first place. The SISA has returned, but in a tamed down (somewhat sensible) version. What is allowed is 80% CLTV at a 680 FICO, on a primary residence or 700 on second homes. Investments are not allowed (yet). This program is only offered to self employed borrowers (sorry wage earners), but does allow for interest only. The program is close to conforming in the rates with a price hit of only .25 on a score below 730. It isn't the best I have seen, but unlike most of the others, the deal wasn't conditioned to death. If you have any questions, please don't hesitate to call.

Karl Menzer

http://www.menzerteam.com

Tuesday, June 03, 2008

Factory orders Jumped up a whopping 1.1% last month, much higher than the .1% expected, and giving the Dow a good boost in the morning. Banging Ben Bernanke also came out and to no surprise said that the Fed is done with rate cuts and even hinted about rate hikes. This is good news for us as a country as it will help tame inflation and boost the value of the dollar. Since oil is only traded in dollars, this equals to lower prices per barrel.  The bond has been down most of the morning, but   has recently moved into positive territory, giving us a chance at a re-price for the better today. What seems to have changed the rally is that both Lehman Brothers and Residential Capitol LLC are actively looking for fresh capital to stay afloat.  Also helping the boost is GM's announcement that it is looking to close 4 factories and considering selling its Hummer brand.  Big SUV's and expensive gas don't mix.  The bond is up 15 for the day and 28 since rates came out. It has also finally moved back into the Trend wedge, signaling that we are back in for better rates. I recommend holding out for better rates today.  As always, if anything changes I will let you know.

Karl Menzer

435-849-0212

http://www.menzerteam.com

Monday, June 02, 2008

YOU'RE FIRED!!!! And with that investors became worried about the market and have given us a small rally in the bond today.  Today the CEO's of both Wachovia and Washington Mutual were asked to step down as chairmen.  To add to bond, today's economic reports, although better than expected, both cam in lower.  With the ISM Manufacturing index once again below 50 (which means contraction in the economy), investors are looking at the six time in seven months as a sure sign that the worst isn't over.  Another good sign for the bond is that although construction spending fell only .4%, residential construction dropped a whopping 2.3%, which was the 26^th month in a row we saw a decline.  The FMNA 30 yr 5.5% up 40 Bp for the day, and 21 from 10 a.m. when pricing came out. This may put us in line for improved rates later today.  The recommendation is to keep that rate floating, but keep an eye out just in case we see profit talking today.

Karl Menzer

435-849-0212

http://www.karlmenzer.com

Friday, May 30, 2008

Consumer confidence fell to a 28 year low according to the University of Michigan. This is the lowest reading since June 1980.  To make everyone happy income rose .2%, but inflation is now expected to surge 5.2% (highest since 1982). Here I thought only bad hairdo's came from the 80's.  With fuel costs nearing $4.00 a gallon, words like stagflation and staycation are starting to show up more in the news. Speaking of oil, the federal government has been investigating... well... the federal government for possible price manipulation in the U.S. oil markets. The bond had been up as much as 48 Bp today, but has settled in a mid 20's range for the day. With stocks having a hard time keeping gains, Bonds may recoup the last weeks losses if stocks go on a sell off. On a side note, if you want to invest, think about Spam which has actually seen a surge in sales.

Karl Menzer

435-849-0212

http://www.buyatooelehome.com

Thursday, May 29, 2008

Bonds are getting hammered today with the FNMA 5.5% 30 yr down 85 Bp for the day.  The big winner today are stocks which meandered this morning for a while between positive and negative territory then shot up over 119 in the last 45 minutes. Moving the market today is the expected .9% improvement in the GDP (gross domestic product). Although it is in line with what analysts feet it would be, and it is more a showing that the weakness of the dollar has us buying less from overseas, it also shows that more countries are buying from us. In other news, first time jobless claims rose again 7,000 from last week, and 2,000 from estimates. This puts the number of people on unemployment at a 4 year high. Although a strong sign that we still have a long way to go, in the game of rock, scissors, paper; good news trumps bad news. The bond has dropped past all levels of support, so with a lack of bad news (good for bonds), we are looking at rates to continue to rise.

as always, if anything changes, I will let you know.

Karl Menzer

435-849-0212

http://www.karlmenzer.com

If you would like to have the daily report e-mailed to you, please send an e-mail to karl@karlmenzer.com

Although pricing hasn't come out yet for the day, bonds are already down 54 Bp today, putting us in line for some pretty nasty rate hikes. If you had a client sign a REPCE yesterday evening, I strongly suggest that you ask their lender to lock if they have overnight price protection. More when the daily bond report comes out.

Karl Menzer

435-849-0212

http://www.buyatooelehome.com

Wednesday, May 28, 2008

Durable Goods came in down .5% which was slightly less than the .7% drop than anticipated. What has killed the bond today is that if you exclude transportation, it came in up a whopping 2.5%. This may be a signal that businesses feel that it is time to stock up for better business.  Bonds have taken a beating and are bouncing off the trend line. If we drop past this, we can look for rates to go up more. Here is where what is expected ends... Stocks are down, and oil is hovering around $129 (remember it was $135 recently). It looks to me that, investors are stuffing their mattresses for now. If you have clients waiting on better rates, it may be some time for that. Tomorrow the GDP and unemployment numbers come out. Fingers crossed.

Karl Menzer

435-849-0212

http://www.buyatooelehome.com