The Weekly Rap! Friday Oct 26, 2012

The Dow is currently trading at 13,058 lower by 314 pts over last week.  The S&P 500 is trading higher at 1,405.  Gold is trading at $1,715 an ounce, while oil futures at $85.82 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.85/Gal.

Yields on 10-year notes, which move inversely to prices, are trading at 1.75%.  30-year bond yields are trading at 2.92%.  Mortgages or FNMA 3.5% MBS (Mortgage Backed Security) is currently at 106.41 still experiencing a small correction.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.

In economic news this week; First-time applications for unemployment benefits declined last week, but the number of new claims filed has changed very little over the past few months in a reflection of slow hiring trends.

The Fed Gods continued to express concern about the U.S. economy as they maintained their ultra-easy policy stance. In their statement released Wednesday, the Fed said that growth has been moderate.  While consumer spending has picked up, business spending has slowed.  The Fed also said that inflation has picked up somewhat, due to higher energy prices. The central bank remains concerned that without the easing moves that consists of $40 billion monthly in mortgage-backed securities, growth would not be strong enough to improve the labor market. In its statement, the Fed didn’t change the open-ended nature of the MBS purchases, repeating that they would continue until the labor market outlook improved “substantially.”

Sales of new single-family homes in the rose 5.7% in September to an annual rate of 389,000, the highest pace since April 2010. The expectation was for a small rise given recent gains in other housing-market data, such as confidence among home builders, as well as housing starts and permits.

Durable goods or orders for long-lasting goods rose 9.9% in September, the biggest gain in more than two and a half years, mostly because of a rebound in bookings for commercial jets, but demand for manufacturing goods outside of aircraft was soft.  I guess when the seats start coming unbolted from the floor of the plane it’s time to renew.  Orders in August had declined by the largest amount in three years.

Third quarter Gross Domestic Product or GDP was released this morning and was higher than expected at 2.0% but mostly due in part to government spending. Consumer spending, which has the biggest impact on GDP, rose 2.0% in the July-to-September period, compared to 1.5% in the second quarter. Government spending jumped 3.7% mainly because of higher defense outlays. Also, investment in housing surged 14.4%.

If you know anyone who can benefit from my services as a trusted Mortgage Advisor, please call me.  My greatest goal is to see clients and friends happy.  I guess that’s why I love providing mortgage financing.  It’s an immediate gratification when you can help someone purchase a home, or lower their payment on their existing home.

Bill Bartok

Mortgage Advisor


“The Presidential Debates are Fixed!”

I don’t know if I would call myself a conspiracy theorist, but I like to dig for the real truth.  These days too many things are shrouded in secrecy and deception, probably because so many of us are deceivable.  Do you remember when the Debates were run by the independent League of Women Voters who had long resisted the parties’ efforts to shield their presidential candidates from genuine surprise or challenge?  Well I guess the two political parties didn’t like that, so in the 1990s they joined forces to wrest control over the presidential debates away from them. Now run by the party-controlled “Commission on Presidential Debates,” these rituals are designed to do little more than eliminate spontaneity and exclude all viable third-party voices. the two campaigns have even secretly negotiated “rules” of the debates! Making matters worse still, the Commission is run by lobbyists and funded by large corporations.  One of this year’s major sponsors; Anheuser Bush.  I’m surprised there wasn’t a Bud-Light banner hanging from the podium.

Both campaigns are terrified at anything even remotely spontaneous happening. Under this controlling regime, the candidates aren’t permitted to ask each other questions, propose pledges to each other, or walk outside a “predesignated area.” Worse, the audience members are given the “pre-approved” posing questions, and aren’t allowed to ask follow-ups (their mics are cut off as soon as they get their questions out). Even moderator Candy Crowley wasn’t allowed to ask follow-up questions. The audience members have been reduced to props.

This is just another “Reality TV Show” that we are led to believe is real when in fact it is produced and staged for our entertainment.  I think they should have to have a disclaimer running along the bottom of the show.  This is my reality show!  It’s my opinion and I’m sticking to it!

Bill Bartok

The Weekly Rap! Friday Oct 19, 2012

The Dow is currently trading at 13,372 higher by 34 pts over last week.  The S&P 500 is trading higher at 1,436.  Gold is trading at $1,719 an ounce, while oil futures at $90.07 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $4.29/Gal.

Yields on 10-year notes, which move inversely to prices, are trading at 1.76%.  30-year bond yields are trading at 2.94%.  Mortgages or FNMA 3.5% MBS (Mortgage Backed Security) is currently at 106.72 experiencing a small correction.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.

In economic news this week; Apparently we ratcheted up our spending again in September, buying everything from back-to-school supplies to new autos to the latest version of the iPhone.  Retail spending rose 1.1%.  Sales were also revised higher for July and August. Consumer spending accounts for more than two-thirds of the U.S. economy, so the higher level of retail sales suggests the growth in third quarter could end up somewhat stronger than expected.

We also paid higher prices for goods and services in September, mainly because of the elevated cost of gas.  The consumer price index jumped 0.6% in September for the second month in a row. That’s the biggest back-to-back increase in more than four years.  Higher gas prices accounted for 70% of the increase in CPI in September.  Inflation-adjusted wages dropped 0.3% in September and 0.6% in August, wiping out any improvement in workers’ earnings over the past year.

Builder confidence in October edged higher to mark the sixth gain in a row and the top reading in more than six years, in the latest indicator of a revival in the housing market.  The National Association of Home Builders/Wells Fargo housing market index (Really? Naming rights to an index?) nudged up 1 point to 41, marking the highest level since June 2006.  The index, as low as 17 in Oct. 2011, hasn’t reached the 50 level indicating more builders than not see good conditions.

Their confidence may not be through the roof, but builders broke new ground in September at the fastest pace in more than four years and permits also rose sharply in the strongest sign yet that recovery in the construction trade is becoming firmly entrenched.  Construction on new homes accelerated by 15% to an annual rate of 872,000 last month.

Sales of existing homes declined 1.7% in September at 4.75 million from 4.83 million in August. The median existing-home price rose 11.3% from the prior year, the largest annual gain since November 2005.  Although the number declined if you don’t have the houses to sell…  Inventories declined 3.3% to 2.32 million units in September, representing 5.9 months of supply at the current sales rate, the first reading below six months since March 2006.

The number of Americans who applied for unemployment benefits last week shot up to a three-month high, reversing a sharp decline in the government’s prior report caused by a seasonal quirk that showed first-time claims at a four-year low.  Didn’t I say last week that we would have a revision?

For additional information please visit my Stanford Mortgage website:

Bill Bartok

Mortgage Advisor


“Foster Youth Education Fund, my personal experience”

Today I would like to divert from the usual rant and share something with you.  Last night I catered a charity event that I am on the board for and have a very personal experience with.  As some of may know I recently owned a restaurant in Cameron Park and became a Chef a few years ago, thus the title of this blog.  The Charity is “Foster Youth Education Fund” a non-profit organization created and ran totally by volunteers to generate and disburse education grants to emancipating foster youth.  This is personal because I grew up in the foster care system from age 6 through 18.  It took me 12 years to complete my degree at CSUS, but I did complete it, so I know from personal experience how difficult it is for someone who has no support financially and in many cases no role models to guide them.   

Today in California when youth in foster care graduate from high school or turn eighteen they are on their own.  At that time they lose their housing, financial support and often the guidance of a caring adult. In Sacramento, approximately 250 youth each year experience this situation. Of these youth, one-fifth end up in jail, half are jobless and a third become homeless.  Although many are interested in pursuing college degrees, the daily struggles to exist keep them from pursuing their higher education goals and achieving their potential.

We also help fund the Guardian Scholars program at Sacramento State.  The program provides a campus-based program with an integrated system of services to support current and former foster youth in the successful completion of a college degree.  In addition to academic assistance the program, through mentor-ship, provides physical/emotional support that will allow them to attend to their studies and complete their degrees in a reasonable time with no or minimum debt.

I went to another charity event last year, I think in was CSUS Alumni, and they raised $2 Million dollars for an art wing honoring a local artist and I couldn’t help but think how many foster youth we could help with 2 million dollars. If you would like to help our website is  This is my reality show!  It’s my opinion and I’m sticking to it!

Bill Bartok

Propositions are not what they seem

So we have about three weeks until the elections, and we’re being bombarded by ads trying to push us in one direction or another.  The thing that bugs me the most is that you really have to dig deep onto the wording on the proposition (new law or ordinance) to see what it accomplishes or denies.  Politicians realize that if they want money for a particular program say building a new prison, they can’t put that in a proposition because it would never get passed, so they take the money from another program say a previous school bond and then say we need money for schools.  If they say its for our children its more likely to be voted in.  The Ca Lottery was voted in many years ago “for the schools” but I wonder how much money from the Lottery actually goes to the schools today.

You have to read the fine print and find out who is responsible for paying for the add.  There is a proposition on the ballot 37 that would require manufacturers to label foods that have been genetically altered and prohibits marketing foods as “natural” when they are processed, and guess who pays for the ads?  Its Monsanto and Dupont, the two largest chemical companies.  While this might add a few cents to items we purchase at least we would know what we are purchasing.  What do you think?

I believe that our bodies are wired to digest or process foods that are made or grown naturally.  Our bodies see a foreign substance and it has to figure out how to process it.  One in particular Cricso or partially hydrogenated oil was supposed to be the savoir, we now know its more harmful than Lard (which by the was has less saturated fat than butter and a higher smoke point).  Did you know that Canola oil (stands for Canadian Oil) is made from a genetically altered Rapeseed plant that is poisonous if not altered?  No wonder they had to call it Canola.  I say try Rice Bran oil, at least you know where it comes from.  My grandmother lived to be 97 and fried bacon in the morning and cooked food from the garden for dinner in the bacon fat from the morning.

Ok sorry, I digressed,  bottom line; read both sides on each proposition and vote carefully!  It’s my opinion and I’m sticking to it!


The Weekly Rap! Friday Oct 12, 2012

The Dow is currently trading at 13,338 lower by 234 pts over last week.  The S&P 500 is trading higher at 1,430.  Gold is trading at $1,765 an ounce, while oil futures at $92.18 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $4.31/Gal.

Yields on 10-year notes, which move inversely to prices, are trading at 1.66%.  30-year bond yields are trading at 2.82%.  Mortgages or FNMA 3.5% MBS (Mortgage Backed Security) is currently at 106.72 experiencing a small correction.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.

In economic news this week; Job openings at U.S. workplaces were about the same at 3.56 million in August from 3.59 million in July. Compared with the prior year, job openings rose 13%, private openings increased 13% to 3.19 million, and government openings rose 10% to 369,000. There were more than 4 million jobs open when the recession began in December 2007.

The Fed reported that the economy continued to grow modestly across much of the nation in the past month, based on interviews with thousands of business contacts.  Reports from the twelve Fed districts indicated that economic activity generally expanded modestly since the last report.  The Beige Book, is an anecdotal account of the economy produced by economists in the 12 regional Fed banks.  While the latest Beige Book showed no dramatic differences from the one published on Aug. 29, it did seem somewhat less downbeat.

The number of U.S. workers who filed new applications for unemployment benefits dropped sharply, by 30,000, last week to 339,000, the lowest level in more than four years, interestingly like last week’s unemployment rate, many economites are saying it may have been the result of a statistical fluke.  I guess we’ll see in the revisions to come.

Prices at the wholesale level rose 1.1% in September after a 1.7% increase in August as the rise in gasoline prices jumped and passed the increase on to everything else.  The core wholesale price index, which excludes food and energy prices, was flat in September after a 0.2% gain in the prior month.

Bill Bartok


The Weekly Rap! Friday Oct 4, 2012

The Dow is currently trading at 13,632 higher by 200 pts over last week  The S&P 500 is trading higher at 1,466.  Gold is trading at $1,783 an ounce, while oil futures at $89.33 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $4.05/Gal. 

Yields on 10-year notes, which move inversely to prices, are trading at 1.71%.  30-year bond yields are trading at 2.95%.  Mortgages or FNMA 3.5% MBS (Mortgage Backed Security) is currently at 106.94.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. 

In economic news this week; Construction spending fell 0.6% for the second month in August. It was a mixed bag for auto makers in September as Chrysler reported some of its best sales increases in years, while Ford and General Motors posted results that were largely flat.  Factory orders slumped 5.2% in August for the second drop in three months. 

The big news is the employment report:  The U.S. unemployment rate fell to 7.8% last month from 8.1% in August, its lowest level in more than 3½ years as the economy continued to add 114,000 jobs.  The previous jobs number was revised higher at 148,000.  So the number of new jobs created actually fell last month.

Today’s report is the first since the Fed’s decision to commence an ambitious stimulus program, buying $40 billion a month of mortgage-backed securities until the U.S. job market substantially improves.  The latest numbers offer some good news with the falling unemployment rate but also suggests that job creation, while steady, remains slower than the Fed would like.

Now, I will admit that I am a conspiracy theorist.  Not only does it make for good reading, but it makes you think; could it be possible?  The figures are also the next-to-last snapshot of the labor market before the November election.  October’s employment numbers are due out only four days ahead of the vote—possibly too late to sway many ballots.  So how does the unemployment rate fall to 7.8% last month from 8.1% when the same lackluster new jobs created actually fell?  The last time the unemployment rate was below 8% was in the same month Obama took office in January 2009.  I’m nor the only one calling it a conspiracy.  Jack Welch, former CEO at General Electric, took to Twitter this morning to voice his displeasure with the jobs report. He Tweeted; “Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers”.

One would assume Welch’s critique centers around the big jump seen in the household survey, which showed 873,000 people found jobs last month, the largest increase since January 2003. That played a big role in dragging down the unemployment rate.  Now do I actually think the report was “rigged” not really but within our governmant anything’s possible.

The number of people filing for unemployment benefits bounced higher last week, underscoring the slow pace of job creation.  Initial jobless claims climbed to 367,000 last week, compared to an upwardly 363,000 in the prior week.  Soooo more people are filing for unemployment but the unemployment rate dropped, hmmm…  By the time this report gets revised the election will be over and we’ll have a new President.

Bill Bartok

Mortgage Advisor

Why lending standards are so tight while rates are so low!

I read a really good article this week in the Wall Street Journal about why the Mortgage Market is so tight even though rates are reaching new historical lows almost weekly.  I’ll summarize but I encourage you to read the entire article, because without changes to the Dodd-Frank act, things could get worse.

Basically the two agencies Fannie Mae and Freddie Mac who are responsible for 90% of conventional loans, and who most loans are sold to, have a forced buy-back (or put-back as they call it) policy where they can force a lender to re-purchase a loan that was sold to them.  Lenders are so afraid of these policies that they have grown weary of making new loans, and the loans they are making they have ratcheted up credit and documentation standards for new mortgages.

Banks are asking borrowers to explain every deposit into their bank accounts over a few hundred dollars in order to verify that their assets are their own, lest an audit later find that the buyer borrowed cash from a family member.  Cash no longer counts.  We are being asked to explain in detail any inquiries made on our credit reports even is they are from the lender.

According to the article, following the meltdown, the agencies began hiring armies of auditors, called “bounty hunters” by bank executives, to conduct detailed reviews of loan files to spot errors that could justify a put-back.  So far, Fannie and Freddie have asked banks to repurchase $66 billion in mortgages made between 2006 and 2008.  I get that the banks and mortgage companies that made mistakes should have to repurchase loans, the problem is they are making banks repurchase loans based on new criteria.  And lenders are wary of what new criteria could pop up in the future.  New mortgage regulations set to take effect next year in a provision of the Dodd-Frank financial-overhaul law, for example, may carry hefty penalties for failing to thoroughly document a borrowers’ ability to repay a mortgage.

We here from the politicians that they want to relax the criteria for families to get a mortgage but as long as the put-back provisions exist, lenders won’t make the loans the politicians want them to make.  The “Home Affordable Refinance Program” or HARP 2.0 is just such an example.  The government can float a program but thy can’t force lenders to offer it.  It’s my opinion and I’m sticking to it!