Energy Crisis

Treasuries continued trading in a narrow band with the ten year bond trading between 3.58 and 3.63 last week. Rates are expected to tick up in anticipation of the auctions March 9th, 10th and 11th in which the Treasury will sell $71bn in 3 year, ten year and 30 year paper. The Bloomberg survey consensus is that 10 year yields will rise to 4.12% by the end of the year.

Pushmi-Pullyu

Treasury rates increased last week on the Fed increase of the overnight rate which seemed to some traders to signal the end of quantitative easing. Still the move was telegraphed in advance and affects a miniscule amount of Bank borrowing. Rates fell back on unexpectedly poor consumer confidence numbers today, a rallying dollar, and problems that are keeping Europe’s rates low.

Today's Word: Global Cash Flow

The Ten Year Treasury Bond continued to trade within a narrow band around 3.65% the first trading day of the week. Observers noted both slackening foreign demand for US Treasuries (China has been a net seller in recent months) and a diminishing fear of inflation. Pimco and Blackrock were big sellers of TIPS, inflation protected securities, and TIPS breakeven spreads declined to 2.25% indicating investors’ view of the likely level of inflation. Very slow growth is seen as the new normal.

You Need a Mortgage Broker Now

Treasury prices dipped today ahead of the scheduled auctions as fear over a Greek default ebbed. News of increased job openings; greater than expected wholesale inventory decline in December and the rise of the US Small-Business Confidence Index (for the first time in 3 months) bolstered the case for recovery and higher rates.

You need a mortgage broker because the Lender that made you a loan even one year ago either does not exist or has substantially changed.

Case 1:  We had strong low ltv cash-out refinances or purchases of well located apartment properties in which the Borrower had no outside income. All were executed by our lead Bank after having been rejected by our other first tier lenders.

Treasury Rates Up, Bank Rates Down

Treasury rates rose Monday and Tuesday on news of stronger economic growth. Still the Ten year is below where it was 2 weeks ago when it threatened to march past the 4% resistance level.

Is This a Goldilocks Moment?

Home prices rose for the sixth straight month in November (just released data) according to S&P Case-Schiller and consumer confidence rose to its highest level in more than a year according to the Conference Board. Meanwhile the ten year Treasury Bond stepped back to 3.6 level after breaking 3.85% per cent January 11th.

New Year. New Lenders.

US Treasury rates backed off from their recent highs based on weaker than expected U.S employment, fears that China’s lending curbs will brake global growth and a search for a safe haven with equity prices dropping.

Interest Rate Prediction

Rates will fluctuate. Though the trend is up. Ten year U.S. Treasury rates increased about 45 basis points following the favorable December Labor Report. Meanwhile U. S. economic growth is on a path to increase at a 2.6% annual rate (some analysts have Q4 growth at 4%) while Germany is on track for 1.6% growth. The institutional play is therefore to sell Treasury bonds and buy German government debt. If the U. S economy continues on its trajectory, the betting is that the Fed will raise rates and that this will happen faster in the U.S than in Europe.

Harris Newsletter

I recently had a conversation with a good friend of mine who also happens to be a former president of BAMA.   We were droning on as so many of us have done during the past year, about the sad state of the credit markets and the difficulties we face in our industry.  Then our conversation turned to a questionnaire that my friend had emailed me. Essentially, after completing the questionnaire, the result indicates that we as a nation have a lot to be thankful for.  As we step into the year 2010, I am definitely going to be mindful of that.  Despite the obstacles ahead, I know that they pale in comparison to the plight of so many people on this earth.  If you need a little inspiration, you can check out this questionnaire at www.globalrichlist.com.

What's Up?

Rates.  Although the Ten year Treasury has risen about 50 bps from its recent lows, it is still under the 4.00% mark that it hit in June.

Treasury Market: Happy @!%$#& Holiday!

Treasury rates on medium and longer term paper rose to 4 month highs on inflation and deficit fears. This pushed up rates on Agency loans. Signs of recovery include brisker home sales and higher temporary hiring, a precursor to full time job gains.

Wither Treasuries?

Treasury prices for the Ten Year have tanked over the past week and agency rates have increased to their highest level since August.  A ten year 75% LTV fixed rate loan at that we locked 3 weeks ago @ 5.5% would price out today north of 5.9%

Treasury Rates Slip on Greece

Ten year Treasury rates rose from last Tuesday’s low of 3.21 based on the Dubai shock, to Friday’s high of 3.48%, based on surprisingly favorable employment numbers.

We Don't Know

What we don’t know. Treasuries jumped (and Treasury rates dipped) on the news from Dubai last week. In spite of the subsequent worldwide recovery of the stock markets, the US bond market held on to some gains resulting in great rates on Agency loans.

Happy Thanksgiving