Last Week
Last week was a tough week for mortgage rates and it has continued this week also. Oil prices dropped, stocks rallied and mortgage rates went up.
This Week
Stocks traded slightly higher after Bank of America posted better than expected earnings and gave financial stocks a boost. Meanwhile, Mortgage Bonds are little changed after getting roughed up last week.
The economic calendar is a little lean this week, but the markets will have to contend with an active corporate earnings calendar. Should earnings and guidance beat already reduced expectations, Stocks may continue their recent rally and pressure Bonds further.
Philadelphia Fed President, Charlie Plosser, said "inflation is too high". As you know Bonds hate inflation, but Charlie also stated that the Fed must "back up their words with action" and hike rates. This helped to improve Stock futures and push Oil prices back below $130 a barrel. The smart money in the market clearly sees that a Fed Rate Hike is needed sooner rather than later.
The yield on the benchmark 10-year Treasury note, which moves opposite it’s price, rose to 4.10 percent from 4.04 percent late Monday. Government debt also weekend as investors moved into equities.
Although Stocks futures are off their worst levels, they are still lower due to worse than expected earnings by Apple Inc., Wachovia Corp., and American Express. In the case of Wachovia they slashed their dividend by 87% and announced they are exiting wholesale mortgage lending.
Treasury Secretary Henry Paulson said Congress understands "the demands'' of the U.S. housing downturn and predicted lawmakers will pass a bill this week to shore up confidence in Fannie Mae and Freddie Mac.
At 1pm Wednesday, the Treasury Department auctioned $31 Billion in 2-year Notes and this enormous supply could weigh on the overall Bond market.
Yesterday's 20-Year TIP auction results had quite a bit of odor and pressured the overall Bond market immediately thereafter. If the results are once again poor, we could see Bond prices come under selling pressure.
Today, the Fed released the Beige Book, which is a snapshot of where the economy stands and could influence the Fed's future interest rate decisions. This release steadied the market.
Provided by Bank of America
Thursday, July 24, 2008
Monday, July 14, 2008
Hurricane Tips 2008
Protecting your home:
There are so many things to do to secure your home, both during the calm and right before a hurricane hits. Here are some things you may not have thought of to help you protect one of your most precious assets.
Consider shutters or pre-cut boards for securing your windows. Taping is very ineffective and definitely do not plan on cracking them open.
Get simple latches for your attic access panels so the air pressure can’t suck them up and then blow insulation into your house making an even bigger mess.
Have at least 4-6 large gas cans available. You’ll need to get around and many gas stations may not be available.
Have four to six large plastic storage bins empty and available. You’ll want to fill up at least two with water last minute. (Note: 70 gallons from your hose really cuts back on how many bottled gallons you have to buy, and it’s more than good enough for pets, hand-washing, boiling for cooking, etc.) The others will be handy to have for keeping valuables dry last minute, if the worst happens.
If you have a gas grill, buy an extra full tank to keep ready. If you have a coal grill, but plenty of extra coals. If you lose electricity, this will become your stove, and both gas and coals will be in short supply afterwards.
If you are in the market for a new refrigerator, buy a good energy efficient one. Some of the newer styles can keep frozen food fresh for days without any electricity — plenty of time to eat it all and keep it from being wasted. When a storm is coming, turn your fridge/freezer temps down to their coldest settings 12-24 hours before the storm hits.
Take a hose and blast water around your door frames and windows as hard as you can, then look for any signs of water inside. If you find any, then figure out a way to seal it well. No matter how hard you blast, it will never reach the pressure and force of hurricane rains, which will break most seals, so any leaking will be far worse then what you get with your hose.
If you have any double doors, get extra ceiling and floor bolts to anchor them well. You don’t want to spend an entire storm trying to keep your double doors closed against the wind.
Brace your garage door! You can buy hurricane kits, but if you must do something last minute, then extra long screws and tarp / motorcycle tie-downs and bungie cords can work wonders. Just find any way you can to anchor that garage door to the frame, because that’s usually where the system fails — the wind pushes the door off the track. Of course, if you anchor it shut, then you can’t do this until a storm threatens, but you should have a plan in place.
Bring in any lawn furniture, trampolines — potential missles — that you have outside. It might not be a big deal to you if they get blown away, but if they blow into your home, breaking windows and causing worse damage, that is a big deal! If there are homes with tile roofs near yours, try to find another place to park your cars during the storm. Tiles may not stay on the house in hurricane force winds, and they will completely ruin your car and there will be no rentals available for miles around for weeks.
Protecting your Family:
One of the best things you can do to protect your family is to be prepared. Print this page and use it as your hurricane disaster supply checklist for your family. Here’s what you need.
____ Water - at least 1 gallon daily per person for 3 to 7 days.
____ Food - at least enough for 3 to 7 days
non-perishable packaged or canned food / juices
foods for infants or the elderly
snack foods
non-electric can opener
cooking tools / fuel
paper plates / plastic utensils
____ Blankets / Pillows, etc.
____ Clothing - seasonal / rain gear/ sturdy shoes
____ First Aid Kit / Medicines / Prescription Drugs
____ Special Items - for babies and the elderly
____ Toiletries / Hygiene items / Moisture wipes
____ Flashlight / Batteries
____ Radio - Battery operated and NOAA weather radio
____ Cash - Banks and ATMs may not be open or available for extended periods.
____ Keys
____ Toys, Books and Games
____ Important documents - in a waterproof container
insurance
medical records
bank account numbers
Social Security card
____ Tools - keep a set with you during the storm
____ Vehicle fuel tanks filled
____ Pet care items
proper identification
immunization records
medications
ample supply of food and water
a carrier or cage
muzzle and leash
There are so many things to do to secure your home, both during the calm and right before a hurricane hits. Here are some things you may not have thought of to help you protect one of your most precious assets.
Consider shutters or pre-cut boards for securing your windows. Taping is very ineffective and definitely do not plan on cracking them open.
Get simple latches for your attic access panels so the air pressure can’t suck them up and then blow insulation into your house making an even bigger mess.
Have at least 4-6 large gas cans available. You’ll need to get around and many gas stations may not be available.
Have four to six large plastic storage bins empty and available. You’ll want to fill up at least two with water last minute. (Note: 70 gallons from your hose really cuts back on how many bottled gallons you have to buy, and it’s more than good enough for pets, hand-washing, boiling for cooking, etc.) The others will be handy to have for keeping valuables dry last minute, if the worst happens.
If you have a gas grill, buy an extra full tank to keep ready. If you have a coal grill, but plenty of extra coals. If you lose electricity, this will become your stove, and both gas and coals will be in short supply afterwards.
If you are in the market for a new refrigerator, buy a good energy efficient one. Some of the newer styles can keep frozen food fresh for days without any electricity — plenty of time to eat it all and keep it from being wasted. When a storm is coming, turn your fridge/freezer temps down to their coldest settings 12-24 hours before the storm hits.
Take a hose and blast water around your door frames and windows as hard as you can, then look for any signs of water inside. If you find any, then figure out a way to seal it well. No matter how hard you blast, it will never reach the pressure and force of hurricane rains, which will break most seals, so any leaking will be far worse then what you get with your hose.
If you have any double doors, get extra ceiling and floor bolts to anchor them well. You don’t want to spend an entire storm trying to keep your double doors closed against the wind.
Brace your garage door! You can buy hurricane kits, but if you must do something last minute, then extra long screws and tarp / motorcycle tie-downs and bungie cords can work wonders. Just find any way you can to anchor that garage door to the frame, because that’s usually where the system fails — the wind pushes the door off the track. Of course, if you anchor it shut, then you can’t do this until a storm threatens, but you should have a plan in place.
Bring in any lawn furniture, trampolines — potential missles — that you have outside. It might not be a big deal to you if they get blown away, but if they blow into your home, breaking windows and causing worse damage, that is a big deal! If there are homes with tile roofs near yours, try to find another place to park your cars during the storm. Tiles may not stay on the house in hurricane force winds, and they will completely ruin your car and there will be no rentals available for miles around for weeks.
Protecting your Family:
One of the best things you can do to protect your family is to be prepared. Print this page and use it as your hurricane disaster supply checklist for your family. Here’s what you need.
____ Water - at least 1 gallon daily per person for 3 to 7 days.
____ Food - at least enough for 3 to 7 days
non-perishable packaged or canned food / juices
foods for infants or the elderly
snack foods
non-electric can opener
cooking tools / fuel
paper plates / plastic utensils
____ Blankets / Pillows, etc.
____ Clothing - seasonal / rain gear/ sturdy shoes
____ First Aid Kit / Medicines / Prescription Drugs
____ Special Items - for babies and the elderly
____ Toiletries / Hygiene items / Moisture wipes
____ Flashlight / Batteries
____ Radio - Battery operated and NOAA weather radio
____ Cash - Banks and ATMs may not be open or available for extended periods.
____ Keys
____ Toys, Books and Games
____ Important documents - in a waterproof container
insurance
medical records
bank account numbers
Social Security card
____ Tools - keep a set with you during the storm
____ Vehicle fuel tanks filled
____ Pet care items
proper identification
immunization records
medications
ample supply of food and water
a carrier or cage
muzzle and leash
Mortgage Review
Last Week
Last week, as expected, the Federal Reserve left rates unchanged at 2% after seven consecutive cuts that started in September and ended at the April 30th FOMC meeting. The forward looking statement read “in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.” This phrase along with some others highlighted the Fed’s tough talk on inflation, but their lack of action initially pressured the Bond Market lower, before prices rebounded to finish the day just slightly lower. We feel strongly that the Fed has to step in and hike rates in order to strengthen the US Dollar and combat high Oil prices. With high Oil prices and inflation threats looming, it is very tough to see Mortgage Bonds moving much higher from here.
The final Gross Domestic Product (GDP) was released showing a 1.0% increase for the first quarter and was inline line with estimates. Initial Jobless Claims were 384,000, slightly higher than expectations of 375,000. The four-week average of those claims rose to 378,250, the highest since October 2005. Both figures are above levels signal continued weakness in the labor market. Existing Home Sales for May were reported at 4.9 Million units, which was inline with expectations. The inventory of unsold existing homes dropped slightly to a 10.9 month supply. The report tells us the housing market is weak but stable.
This Week
The Federal Jobless Report is due tomorrow, July 3rd. The ADP Employment report was released this morning, showing a dismal reading of 79,000 jobs lost last month, the biggest loss since November 2002. Job gains reported for May were also revised lower. After adding in an estimated 20,000 government jobs created in a typical month but not included in ADP’s read, their report suggests that about 60,000 jobs were lost in June…inline with estimates for tomorrow’s official Jobs Report from the Department of Labor. If the news is bad, as expected, mortgage rates should perhaps fall a bit.
Last week, as expected, the Federal Reserve left rates unchanged at 2% after seven consecutive cuts that started in September and ended at the April 30th FOMC meeting. The forward looking statement read “in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.” This phrase along with some others highlighted the Fed’s tough talk on inflation, but their lack of action initially pressured the Bond Market lower, before prices rebounded to finish the day just slightly lower. We feel strongly that the Fed has to step in and hike rates in order to strengthen the US Dollar and combat high Oil prices. With high Oil prices and inflation threats looming, it is very tough to see Mortgage Bonds moving much higher from here.
The final Gross Domestic Product (GDP) was released showing a 1.0% increase for the first quarter and was inline line with estimates. Initial Jobless Claims were 384,000, slightly higher than expectations of 375,000. The four-week average of those claims rose to 378,250, the highest since October 2005. Both figures are above levels signal continued weakness in the labor market. Existing Home Sales for May were reported at 4.9 Million units, which was inline with expectations. The inventory of unsold existing homes dropped slightly to a 10.9 month supply. The report tells us the housing market is weak but stable.
This Week
The Federal Jobless Report is due tomorrow, July 3rd. The ADP Employment report was released this morning, showing a dismal reading of 79,000 jobs lost last month, the biggest loss since November 2002. Job gains reported for May were also revised lower. After adding in an estimated 20,000 government jobs created in a typical month but not included in ADP’s read, their report suggests that about 60,000 jobs were lost in June…inline with estimates for tomorrow’s official Jobs Report from the Department of Labor. If the news is bad, as expected, mortgage rates should perhaps fall a bit.
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