The Weekly Rap! Friday Dec 28, 2012

I would like to wish you and your family a wonderful and prosperous New Year!

The Dow is currently trading at 13,030 lower by 135 pts compared with last Friday.  The S&P 500 is also trading lower at 1,411.  Gold is trading at $1,657 an ounce, while oil futures at $90.61 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.23/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, are trading at 1.71%.  30-year Treasury Bond yields are trading at 2.88%.  The MBS (Mortgage Backed Security) FNMA 30-year fixed 3.0% coupon, containing 3.25-3.625% mortgages, pretty much the benchmark or how rate sheets are priced these days, is about 75% of the over-all production.  This security is currently at 104.83 a bit better than where we were last week.  Since October 4 We’ve been trading in a range of 104.13 to 105.53 hitting the low twice and the top twice.  I would expect trading to remain conservative through New Years.  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; It was a slow week for economic indicators with the holidays.

Home prices according to Case-Shiller’s data on 20 cities was down a slight 0.1% in October, but were up 4.3% from the same period last year, the fastest annual growth since May 2010.  The drop has been blamed on seasonal weakness, while a longer-term trend shows a sustained recovery. Other recent housing data, such as sales of existing homes and sentiment among home builders, have also shown a market gaining strength.

New home sales were higher by 4.4% in November, the highest level since April 2010. The median price of new homes climbed 3.7%.  New home sales are 15.3% higher compared to one year ago and the median sales price is 14.9% higher.

A gauge of consumer confidence dropped in December to the lowest level in four months as short-term expectations plunged with fiscal-cliff concerns outweighing positive jobs news. We saw a similar decline in expectations in August 2011 during the debt ceiling discussions. The Conference Board said its consumer-confidence index fell to 65.1 in December from 71.5 in November.

As far as the “fiscal Cliff” goes, it looks like our politicians will not reach an agreement (read compromise).  I actually don’t think it’s possible.  This can has been kicked down the road too many times and now they’ve hit the wall.  We have this fiscal cliff because the politicians couldn’t agree on how to balance the budget over the last four years.

In January we’ll have a new set of politicians that won’t look much different than we have now.  My guess is that nothing will be solved and the current congress will push the decision off to the new congress who could make changes and make them retroactive, or they will just raise the debt ceiling again and continue to kick the can.

If you know anyone who can benefit from my services, 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.

For additional information please visit my Stanford Mortgage website: http://bill.bartok.stanfordloans.com/agents/Blog
Sincerely,

Bill Bartok

Mortgage Advisor

NMLS#445991

 

How do you blog about something when we have people killing children?

I don’t even remember what I was going to blog about after hearing the news this morning that some 20 year old man went into an elementary school and started shooting killing children and teachers.  The difficulty here is that we feel so terrible about something like this that we feel compelled to “do something”  so that it can’t happen again, and we want to blame someone or something because we’re angry.  It’s really hard when the gunman turns the gun on himself because we have to look elsewhere for blame.

Trust me, I wish there was something that could’ve been done but the school had security measures in place and the gunman got in anyway.  And how do we stop someone from committing such a heinous crime when they have no record.  We don’s have laws yet that charge you with a crime BEFORE you commit it.  I think that was a movie though.  When something like this happens we seem to go straight to gun control.  But do you think that someone that would kill another human being especially children, would obey a gun control law???  We have laws against drugs and yet you can still acquire them.  This is a tragedy but I don’t think Gun control is the answer.

Sometimes bad things just happen and there’s nothing we can do about it.  It should make us more thankful for the family and friends we have.  Never take life for granted, it’s just too precious.  cherish the moments you have for they may not be here tomorrow.

The Weekly Rap! Friday Dec 14, 2012

The Dow is currently trading at 12,553 higher by 609 pts compared with last Friday.  That’s a gain of over 1,600 points in just three weeks.  The S&P 500 is also trading higher at 1,416.  Gold is trading at $1,698 an ounce, while oil futures at $86.60 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.30/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, are trading at 1.70%.  30-year Treasury Bond yields are trading at 2.86%.  The MBS (Mortgage Backed Security) FNMA 30-year fixed 3.0% coupon, containing 3.25-3.625% mortgages, pretty much the benchmark or how rate sheets are priced these days, is about 75% of the over-all production.  This security is currently at 104.65 about 1.00% lower in price (higher rates) but still trading in a tight range.  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; I mentioned last week that most of the economic news that pertains to post-election should have a “fiscal cliff” asterisk next to it due to the fact that the amount of uncertainty surrounding the possible outcomes is weighing on the decisions of just about every company out there no matter what they produce.

An index from the National Federation of Independent Business that tracks sentiment among small firms fell post election 5.6 points at 87.5.  The survey found that 49% of small-business owners expect future business conditions to be worse than current conditions.  In October, a record percentage of owners were uncertain about the outlook, and it appears that many became decidedly negative in November. Apparently, many believe that Washington does not have the needs of small business in mind. Between the looming ‘fiscal cliff,’ the promise of higher health-care costs and the endless onslaught of new regulation, owners have found themselves in a state of pessimism.  I would really be interested in your feedback on this.  Our company has had to cancel our group life insurance and long term care insurance due to the looming “Obama-Care” that we now know will be implemented.

The big news this week was the Fed meeting on Wednesday. The Fed, in a major move, set out new benchmarks for the first time on the level of unemployment and inflation that must be in place before it would contemplate higher interest rates.  They also announced a new $45 billion bond-buying program in fresh action to keep the recovery going in the languishing jobs market.  Fed Chairman Ben Bernanke and his colleagues agreed, for the first time, they would hold rates close to zero while the unemployment rate is above 6.5% as long as inflation is not projected to rise above 2.5%. Longer-term inflation expectations must be well-anchored, the Fed said. They have previously said they expected to hold rates steady until mid-2015.

Bernanke noted that, at the moment, five million people, or more than 40% of the unemployed, have been out of work for six months or more.  “The conditions now prevailing in the job market represent an enormous waste of human economic potential,” Bernanke said.  The Fed also kept its existing program to buy $40 billion a month in mortgage-backed securities which is helping to keep mortgage rates at record low levels.

U.S. economic growth has been lackluster, with so-so consumer spending, lukewarm hiring trends and tepid business investment. The economy is expected to slow to 1.9% in 2013 from 2.2% this year, according to the November survey of Blue Chip Economic Indicators.  Looming over the outlook are tense negotiations over tax-and-spending policies, the so-called fiscal cliff.

American consumers didn’t go shopping much in October, but they made up for it in November.  Retail sales rose a modest 0.3% last month after declining 0.3% in October.  Then again we did have Black Friday, or should I say Black Thanksgiving.  But don’t get me started on that one.  I was left alone on thanksgiving night while the rest of the family went shopping.

We paid less for goods and services in November, mainly because of the falling cost of gas. The Consumer Price Index dropped 0.3% last month. Excluding food and energy, core consumer prices edged up 0.1% in November.  The core number is closely followed by investors and the Fed as it is seen to be a better predictor of future inflation. A low rate of inflation also allows the Fed to continue its policy of buying government and mortgage-related debt in an effort to drive down interest rates for the purchase of homes, cars and other consumer goods.

If you know anyone who can benefit from my services, 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.

For additional information please visit my Stanford Mortgage website: http://bill.bartok.stanfordloans.com/agents/Blog
Sincerely,

Bill Bartok

Mortgage Advisor

MNLS #445991

The Weekly Rap! Friday Dec 6, 2012

The Dow is currently trading at 12,553 higher by 556 pts compared with two weeks ago.  That’s a gain of over 1,000 points in just two weeks.  The S&P 500 is also trading higher at 1,414.  Gold is trading at $1,700 an ounce, while oil futures at $86.11 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.33/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, are trading at 1.62%.  30-year Treasury Bond yields are trading at 2.81%.  The MBS (Mortgage Backed Security) FNMA 30-year fixed 3.0% coupon, containing 3.25-3.625% mortgages, pretty much the benchmark or how rate sheets are priced these days, is about 75% of the over-all production.  This security is currently at 105.06 still trading in a tight range.  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; Most of the economic news that pertains to post-election should have a “fiscal cliff” asterisk next to it due to the fact that the amount of uncertainty surrounding the possible outcomes is weighing on the decisions of just about every company out there no matter what they produce.  If you haven’t heard, the “cliff” is a mix of tax increases and spending cuts set to hit in January unless the White House and Congress strike a deal to avert it.  Going over the cliff would likely send the economy back into a recession, and many economites think businesses are already holding back on hiring and investment while tax rates and government spending plans for next year remain unknown.

Manufacturers slowed production in November with the Institute for Supply Management’s index of purchasing managers falling to the lowest level in more than three years, dropping to 49.5% from 51.7% in October.  Purchasing managers are the executives who buy raw materials and other supplies for their companies, an activity that tracks closely with how fast the economy is growing.  Service companies such as insurers and health-care providers grew at a somewhat faster pace 54.7% in November, marking the 35th straight month of expansion.  A level above 50 indicates expansion.

The U.S. added 146,000 jobs last month as job growth seems to have picked up a bit and the unemployment rate fell to a four-year low 7.7% from 7.9% in November as the labor market shrugged off superstorm Sandy, the latest sign of a steady if unspectacular economic recovery. September’s and October’s increases were cut by a cumulative 49,000. Since the beginning of the year, employment growth has averaged 151,000 a month, about the same as 2011.  The lower unemployment rate, meanwhile, largely reflects people leaving the work force.

Home prices edged 0.2% lower in October, even as the year-on-year change 6.3% higher registered the strongest advance in more than six years. CoreLogic said prices slipped in October, which it says was expected as the housing market enters the offseason.  Excluding distressed sales like foreclosures and short sales, prices actually rose 0.5%, or 5.8% year-on-year.

Consumer sentiment took a large step back in December, as the looming fiscal cliff made its first measurable dent on the public’s psyche. The University of Michigan-Thomson Reuters consumer sentiment index fell to 74.5 from 82.7 in November.

Bill Bartok

Mortgage Advisor

NMLS# 991445