The Weekly Rap! Friday Oct 18th, 2013

Happy Friday!

The National Debt is currently: $16,965,304,856,824.00

The Dow last traded at 15,374.  The S&P 500 is trading at 1,740.  Gold is trading at $1,313 an ounce, while oil futures at $101.01 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.49/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.59%.  30-year Treasury Bond yields last traded at 3.64%.  Rates on 30-year fixed-rate mortgages are a hair above 4.5% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

The FNMA 30-year fixed 3.5% coupon, containing 3.75% – 4.125% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 102.00 about a ¾ point (fee) better in price than where we were last Friday at this time.  We are currently trading at the top of the trading range meaning it will take a lot to break through and send rates any lower.  It will be easy to drop to the lower end of the range and see higher rates though.  If you can lock your rate today I would do that.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; the reader’s digest version is the Governments shutdown is over but most economic news during that time now has to be released including the following:

  • The Employment report which is due to be released on Tuesday.
  • Trade deficit
  • Job openings
  • Wholesale inventories
  • Import price index
  • Federal budget  (Don’t get me started, or read my rant)
  • Retail sales
  • Producer price index
  • Consumer price index
  • University of Michigan consumer sentiment index
  • Business inventories

So the Government is open again (notice I didn’t say working).  I wrote a blog on the Governments shutdown as well as a continuance last week titled “The Government Shutdown Pt 2, how/when will we get out of this mess.”  You can read it at  Not surprisingly my predictions were spot on.

They did it again just as predicted and following their track record.  This is no different than what our politicians (Democrat and Republican) have done since Obama has been in office.  Well I should say more since the Democrats lost control of all three government positions (President, Senate, and House of Representatives).  Now on the agenda: Avoiding another shutdown in three months.  The agreement that the Senate and House approved funds the government only through Jan. 15. In the interim, Obama’s team and Congress will try to negotiate a longer-term spending plan.  Yeah right!  If you believe that one I got some beach front property for sale.

I’ve mentioned Charisma before but when I heard Obama speak while reopening the Government I was amazed.  He pretty much blamed the Republicans and stated that we’ve grown the economy in the last four years (he failed to mention though that it grew at a paltry 2.0%) and he stated that he had cut the deficit in half (but he failed to mention though that it had gotten to almost 1.4 trillion/year).  He also stated that he had created new jobs, but failed to mention at the slowest rate in many years.  You really have to read between the lines.  Any fact can be skewed if you word it correctly.

At the end of Obama’s speech at the White House he said: “Hopefully, next time, it won’t be in the 11th hour, One of the things that I said throughout this process is we’ve got to get out of the habit of governing by crisis.”  As the president exited the White House press room, a reporter asked: “Isn’t this going to happen all over again in a few months?”  Obama turned and replied: “No.”  We’ll see, I’m going to refer to this in January.

Of the reports that were issued this past week, the Federal Reserve Bank of New York reported that their “Empire State” general business conditions index edged down to 1.5 in October from 6.3 in September which is the slowest pace in five months. Readings greater than zero signal expansion.

On the Real Estate front:  The National Association of Home Builders/Wells Fargo housing-market index fell to 55 in October from 57 in September.  A prior September estimate pegged the level at 58, which matched the highest reading since 2005.  Results above 50 signal that builders, generally, are optimistic about sales trends. The government was slated to report its most recent data on home construction this week, but won’t because of the shutdown. NAHB created its own estimate, and forecast that the annual rate of housing starts in September reached between 875,000 and 900,000 units, which translates to growth about 2% to 5% from the year-earlier period.

On the Employment front:  New applications for U.S. unemployment benefits fell 15,000 in the second week of October, but jobless claims remained elevated because of processing delays in California and layoffs related to the government shutdown.

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.

Please visit my website at:


Bill Bartok

Mortgage AdvisorMLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

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