Karl's Blog

Friday, May 02, 2008

What a day for a daydream.... That is what this morning seemed like. After unemployment came out LOWER than expected, the bond tanked over 100 points. Then payrolls and factory orders improved more than expected and it looked like the bond would have a freefall down today as everyone went on a buying spree for stocks today. Then someone sneezed. The Federal Reserve stepped in and announced that they will increase their monthly auctions to banks from $100 billion to $150 billion.  To sweeten the pot, they're allowing investment banks to use other AAA rated securities as collateral. This on top of the mortgage-backed securities that they just began allowing, which are the exact bonds that were in freefall. Talk about falling off the edge of the cliff and catching that branch just in time. Bonds have improved dramatically, erasing the 100Bp loss and currently down only 3Bp. Good for you, good for the economy, and good for anyone who needs to have better ratios to qualify for am home.  Talk about a freaky Friday. As always, if anything changes.... And it very may well today, I will let you know.

Karl Menzer

435-849-0212

http://www.buyatooelehome.com

Thursday, May 01, 2008

Unemployment went up 40,000 more than expected today. Tack on to that companies are expecting to layoff an additional 90,015 in the coming months, and you have numbers pointing to a higher unemployment which is expected to edge up past 5.2% tomorrow. The consumer spending  did rise more than expected last month, making most investors giddy... until they factored the increase in costs of goods and fuel and then we see that the real spending came in at an anemic  .1% other numbers include personal income which dropped, construction which tanked 1.1%, and manufacturing which stayed the same. This news took bind market up today nearly 40 Bp.... Then everyone started buying stocks and selling bonds. Another head scratcher here. It seems that investors (or rather the news media) didn't take into account the rise in energy and food, and just saw everyone spending more money. The bond had been down as much as 23 Bp today, but has recovered to a 4Bp gain from yesterday.  There is still time to recover today and with all the news coming out tomorrow, it's anything a good day to keep your hand on the lock button.

Karl Menzer

435-849-0212

http://www.buyatooelehome.com