Monday, June 09, 2008
Lehman Brothers announced today that they are expecting a $2.8 Billion loss for this quarter and are in the process of trying to raise $6 Billion in Capital. This has provided the hammer to push down the bond today and raised rates. Oil, which flirted with $140 on Friday, has pushed back down to the $136 range. Pending home sales unexpectedly jumped in April to 88.2, higher than October, but still 13% lower than a year ago. With Bargain hunters moving their money from bonds today to buy stocks, it would be wise to lock any loan that you have a contract on and hope that your lender has the option to re-lock if (big word there) rates do a turn for the better. The FNMA 30 yr 5.5% is currently down 60 Bp for the day. With investors skittish, even the smallest drop may trigger a re-price for the worse. We are now way below the 25, 50, and 100 day moving average, and looking for the new floor
