Mortgage Market Update

Well, after a week that had basically jobs in mind and then a weekend contemplating the price that many have paid for our freedom, it’s time to take a look at what’s happening in the markets. 

But, before I do, I wanted to share two things that I find special about Fourth of July weekend festivities:

• We attended a local, “homegrown” Fourth of July parade complete with fire trucks, kids on bikes, etc.   The highlight of the Parade for me was the Veterans who were in the parade.   Some were marching and some were not able to march and were riding on a float.    As they passed by, everyone, even the children, stood and solemnly applauded.  It’s because of them and countless others that we have the freedom we do.
• As we’re sitting watching the fireworks Saturday night, I couldn’t help think of Francis Scott Key and the Star Spangled Banner.   The sight of the fireworks going off reminds me of what it must have been like to be living during the Revolutionary War when the fireworks weren’t voluntary for “display” but were actual attacks on you and those who you love and your home.

So don’t forget, we’ve got a lot to be thankful for!

Now, what’s up in the markets?   A couple of things:

• The markets seem to have come back from the long holiday weekend with a bit of a “jobs hangover” and are still somewhat negative due to the bad jobs report last week.
• The ISM (Industrial Supply Management) Index came in this morning and it came in still showing that the manufacturing was contracting but it came in very close to a rating of 50.   What’s so important about 50?   A rating of 50 shows that particular segment of the economy is expanding rather than contracting.  So, while it’s a negative number, it’s less bad than what it has been.
• Oil prices have been slipping today and are now at 5 week lows.

The economic reports for this week are going to be a “bit” on the scarce side.   However the markets are starting to get into earnings season so that could provide some impact.

My recommendations:

• Lock all loans.  
• The downside potential in terms of drops in rate are seriously hampered by the concern over inflation (down the road), government borrowings (now and forever more, amen) and how we’re going to pay for them.
• There is starting to be more and more talk about a second stimulus plan.   Let’s be serious about it, the government doesn’t have the cash to do it, so it would be borrowed money. 

I’ll have more on the markets as conditions warrant.

July 6, 2009