Not a good start this morning; the 10 yr note at 8:30 -16/32 at 3.48% and at key support levels (3.50%). Mortgage prices at 8:30 -8/32 (-.25 bp); the DJIA futures +19. As we have repeatedly noted in the last couple of weeks, the rate markets are soft and slightly bearish frm a technical perspective, trading below key averages (on price) and above key averages on the yield charts. Not a seriously bearish environment yet but if 3.50% cracks the tone of the rate markets will become more serious and likely drive mortgage rates. So far however, every attempt by traders to breach 3.50% has failed; that level now has increased importance as a technical support. At 9:00 the 10 -14/32 3.47% +5 BP, mtgs -7/32 (-.21 bp) and the DJIA +28. At 9:30 the DJIA opened +15, 10 yr note -16/32 and mortgage prices -7/32 (.21 bp).
At 10:00, the only data today; Sept existing home sales expected to be up 4.7%, jumped 9.4%. August sales were revised slightly lower to -2.9% frm -2.7%. The median sales price $174,900.00, -8.5% yr/yr. 7.8 months supply, inventory levels fell 7.5% the lowest inventories since March of 2007
Ben Bernanke spoke this morning on financial reform; said the Fed is thinking about increased taxes on large unwieldy banks or an increase of capital reserves. Some increasing talk floating around that the government wants to shrink the large banks to eliminate the “too big to fail” issue that allowed the big ones to carry on with massive leverage and little concern about the what ifs; it was no secret that behind any fails those biggies would be propped up to keep the financial system from crashing. In the past two years we have experienced the fallacy of too big to fail; tax payers are, and will pay a price that most yet have no idea the amount and what implications it will have for the US over the next few years. The Fed chairman called for a “credible process” for imposing losses on the shareholders and creditors, saying “any resolution costs incurred by the government should be paid through an assessment on the financial industry and not borne by the taxpayers.” Putting the burden on shareholders would get bank executives attention like nothing else.
Market Minute information for October 23, 2009 provided by:
 Patsy Bailey Mortgage Banker |
 4801 Lang Ave NE Suite 100 Albuquerque, NM 87109 4001 Office Court Ste 603 Sante Fe, NM 87507 Cell: 505.715.3231 Office: 505.473.4045 ext.109 E-mail: patsybailey13@gmail.com |
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For more information on home financing, visit my Albuquerque Mortgage Page.
