Mortgage Commentary

[Adam in CO]

Monday’s bond market has opened in positive territory despite early stock gains and a lack of economic news. The stock markets are showing sizable improvements with the Dow up 71 points and the Nasdaq up 4 points. The bond market is currently up 4/32, but we will likely not see an improvement in this morning’s mortgage rates as a result of weakness in bonds late Friday.

This week brings us the release of five important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

The first piece of data comes tomorrow morning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.1% increase in the overall reading and a 0.2% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mortgage rates higher.

June’s Industrial Production data will also be posted tomorrow morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.3% rise in production, indicating that the manufacturing sector showed moderate growth during the month. A smaller than expected increase would be good news and could help push mortgage rates slightly lower tomorrow.

Fed Chairman Bernanke will speak before the House Financial Services Committee Wednesday morning and the Senate Banking Committee Thursday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is a threat to the economy, we will likely see the bond market tank and mortgage rates rise.

Overall, I think we will see the most movement in mortgage pricing this week tomorrow or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony Wednesday.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

"Fed Chairman Bernanke will speak before the House Financial Services Committee Wednesday morning and the Senate Banking Committee Thursday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns."

That will be a thrill...

[Adam in CO]

The Fed is not going to change a thing, I'm certain.

Business as usual

[CO Hummer]

Originally Posted by Adam in CO

Overall, I think we will see the most movement in mortgage pricing this week tomorrow or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony Wednesday.

Hmmm. Bad news for brokers. Thinking about this made me realize that most suicidal people are undecided about living or dying, meaning that one state doesn't appear to have any significant advantage over the other. Suicide can seem to be the only way out of problems, the ultimate solution and what is suicide but an exit? Individual suicides preceded by such thoughts are fairly common events that affect all socio-economic groups but mass suicides are typically thought of as rare and affecting only brainwashed dupes belonging to strange cults. In fact, mass suicides are much more common than most would expect and when the scope and chronology is extended to encompass entire societies then the prevalence of mass suicides is nothing short of a pandemic of global proportions.

The basic requirement for a mass suicide would be three or more people killing themselves together with a common element or interest and all or most of the members going along with the suicide willingly at the same time. Mass suicide comes in multiple forms, it can be politically driven, by dictators for instance. It could be argued that regardless of the motives behind World War II the practical outcome of that horrific conflict was to nearly drive the German people to mass suicide / extinction and the Russians were a close second. So war is often another form of mass suicide and one with millions of eager participants thus making it the largest form expressed.
Mass suicide can also be seen in the case of archaic cultures around the globe, just like the languages that go with them, dying off by the thousands. These cultures have been suddenly exposed to radically foreign influences and the whole panoply of Americanized cultural expectations brought to them from Hollywood via TV, movies and radio. This quickly generates cultural perversions and self-destructive demands; instead of farming, fishing or handmade crafts they want movie star fame, fast food, gold-tone watches and big screen TVs. But whether it's a sudden death or a slow die off, it really only matters for the newspaper headlines because the end result is still a mass suicide.

Depressing