Loan Biz Blog

GDP 3rd Quarter (final revision) slipped to 2.2%, revised lower from the previous posting of 2.8%. Downward revisions to nonresidential fixed investment, private inventory investment, and personal spending did the trick. Economists were looking for a print of plus 2.8%. Although the number was a disappointment, it is certainly better than the negative GDP growth we were seeing earlier in the year. The unemployment picture however, will not heal with growth below 3.0%. Existing Home Sales were also on tap, up 7.4% to 6.54 million units annualized. 33% of the sales were distressed units and 51% of the borrowers were first time home buyers. Just think where we’d be without the 8K program. Stocks are riding a Santa Claus rally, up another 50 something on the Dow and setting new 2009 highs on the Naz. Bonds, notes, and mortgage backs have continued down their bearish path, starting in Australia and continuing through Asia and Europe. State side traders picked up the ball and battered the market, driving mortgage backs down 20/32’s at the time we priced. We have begun to stabilize but are just off the lows (yield 3.74%) as we speak. Low volume trade or not, the chart shows a stunning break since last Thursday with no signs of letting up. 3.75% on the 10 year note is minor support and psychologically important but nothing to hang your hat on. Bigger picture charts (weekly/monthly) warn of the next level of real support not coming in until we see 3.88% to 3.90%. Market profile and trend intensity also tell us that the bears are in control. Markets like this are dangerous, taking your 1 point gain and turning into zero right before your eyes. Use the float down and get out of the way. Hoof prints on your back can be painful.

With Permission & Courtesy of Scott S. Eggen
Senior Vice President – Capital Markets

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Sam Cowen, NMLS ID#: 176693
Branch Manager, Lending in 47 States
PrimeLending | a PlainsCapital Company
2007 N Collins Blvd Ste 403 Richardson, TX 75080
Email: 888@MrLoanBiz.Com Web: www.MrLoanBiz.Com
Toll Free: (888)MR-LOAN-BIZ (888) 675-6262 Toll Free Fax: 866-908-2611