The Weekly Rap! Friday Nov 14th, 2014

I’m Baaaaaak!  Sorry for the hiatus but as many of you know I accepted a dream job as General Manager of a Winery and Bed & Breakfast in Fairplay Ca.  My passions have been (if you follow my blog) Food, Wine, and Finance, and this puts them all together.  We have 40 acres (30+ of which are under Vine), a log lodge with five remodeled rooms, a full commercial kitchen and a wood fire pizza oven on a deck overlooking the vineyard and Sierra Foothills. 

I am still doing loans but getting to make wine and run a business was too good to pass up.  Please check out our website (it’s a work in progress) at .  We are under new ownership and progressing toward our new name “Gold Mountain Winery & Lodge.”  Our address is 7740 Fair Play Rd, Fairplay, Ca, 95684.  We are open Thursday through Sunday 11:00 AM to 5:00 PM and serve lunch.

The National Debt is currently: $17,907,809,132,587.00  is Higher by another 200 BILLION.  The interest pay-out alone on the debt is 268 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 17,634 about 75 pts higher than where it was last Friday.  The S&P 500 is trading at 2,039.  Gold is trading at $1,187 an ounce, while oil futures at $75.93 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $2.85/Gal. 

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. 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 103.375 about .125 worse than where we were last week.  We have been trading in a fairly tight range since May with the low being 101.75 and the high being 103.00 but on Oct 15 we broke out to higher prices/ lower rates.  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 economy continues to improve but at a very slow pace.  Consumer confidence is at its highest in seven years.  Retail sales is higher and the Government is still spending more money than its taking in.

A measure of small-business optimism rose to a two-month high in October, helped by optimism over capital spending plans and sales, according to a survey released Tuesday. The National Federation of Independent Business said its small-business optimism index rose 0.8 points to 96.1. The NFIB said a record low percentage of small business owners reported problems getting access to capital and an unusually high number of owners say they have no interest in borrowing.

On one of my favorite topics to comment on; the federal government’s budget gap widened in October, but the higher figure was a result of calendar shifts and not a worsening fiscal picture.  In October, the deficit was $122 billion, an increase of $31 billion, or 34%, from the same month a year ago. October is the first month of the 2015 fiscal year.  A Treasury official said the October deficit would have been $84 billion, or $6 billion lower than the October 2013 shortfall of $91 billion, if not for calendar adjustments. For example, $41 billion in benefit payments that would normally have been made in November were made in October because Nov. 1 fell on a Saturday.  Either was IT’S STILL A DEFICIT!  The government finished fiscal 2014 with a budget deficit of $483 billion, the lowest of Barack Obama’s presidency. The deficit has fallen from a peak of $1.4 trillion in 2009, the year Obama took office. When will we stop spending more money than we bring in???

Retail sales rose 0.3% in October, bouncing back from the first decline in eight months. Sales minus autos increased 0.3%, the Commerce Department reported. In September, sales were unrevised to show a 0.3% decline. The rise in spending last month, especially when gasoline is stripped out, suggests households could be prepared to spend more during the holiday season than they have in years. That would be a boon for the economy because retail sales account for one-third of consumer spending, the main engine of U.S. economic activity.

Consumers are feeling pretty good about the economy as a gauge of consumer sentiment rose this month to the highest level since mid-2007, as gas prices and the unemployment rate dropped.  The preliminary November reading on the University of Michigan/Thomson Reuters consumer-sentiment index increased to 89.4 — the highest level since July 2007 —from a final October reading of 86.9.  Readings on confidence can provide clues to economists about the direction of consumer spending, the backbone of the economy. Earlier Friday, the government reported that retail sales rose last month, a welcome sign as the holiday shopping season nears.

There are a number of factors working in favor of consumer sentiment and spending. For one, gasoline prices have been dropping for months, with the price for a gallon of regular recently hitting below $3, down almost 27 cents from four weeks earlier.

On the Employment front:  Labor-market momentum continued in October as the unemployment rate fell to a six-year low.  The Fed’s new labor market conditions index stayed at a reading of 4 in October — a level consistent with the average change during an expansion.  The index is made up of 19 different jobs market indicators, including the unemployment rate, the labor-force participation rate and the number of workers who are working part-time for economic reasons. Fed Chairwoman Janet Yellen says this approach allows for a better assessment of the jobs market than relying on the unemployment rate alone.  Last week, the Labor Department reported that 214,000 jobs were added in October, driving the unemployment rate to a six-year low of 5.8%.

Separately, the Conference Board’s employment trends index rose to a level of 123.09 in October, which is up 7.7% from a year earlier. “The index is signaling solid job growth through the winter. As a result, we could see the unemployment rate reach its natural rate of 5.5% by early spring,” said Gad Levanon, managing director of macroeconomic and labor market research.

The number of people who applied for unemployment benefits last week posted the biggest increase in two months, but initial claims are still exceedingly low with a rise in hiring and relatively few layoffs.

While one person hesitates because he feels inferior, the other is busy making mistakes and becoming superior. – Henry C. Link

You can visit my corporate website at:


Bill Bartok

Mortgage Advisor MLO# 445991

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

Thank you!

 Bill Bartok ESIG 9-25-13

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