Wednesday, June 11, 2008
What a fun day yesterday. Since I was unable to e-mail and post this yesterday, here is a brief synopsis. 3 (count them) reprises for the worse, and a 118 Bp drop on the bond. We are still in a lock mode for the time being. That means that if you get a signed contract, please have your client ask their lender to lock the loan as soon as they can. With inflation on the Fed's mind and fear about the financial industry in investors' minds, oil has made a $6+ gain today as the safer investment. Today's Beige book came out showing 2 cracks in the economy; weak economic activity, and soaring costs due to the price of fuel (anyone have an old Moped). The report stopped just short of pushing for a hike in the fed rate, but it is becoming clear that if they want to slow down inflation, it may be the next step. Bonds are up 40Bp for the day, but down 20Bp from 10 am when pricing came out, which put us in line for a re-price for the worse. We are facing a time of irrational fears, where it is hard to really predict what will set off the market in one way or another. One person gets spooked, and then another spooked by him, and so on. We all remember the shampoo commercial in the 80's. The sky isn't falling, but telling Chicken Little that is having little effect. FHA 30 Yr fixed is currently 6.5%.
