Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on October 9, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -88bp

Mortgage bonds had a dismal day to say the least, ending the day below their 200-day moving average, which sets up the possibility of even higher mortgage rates in the near future if mortgage backed securities cannot climb back above this level.  This is even more disturbing, as I eluded to earlier, because stocks are down over 650 points again today and that should be sending bonds higher.

The actions of traders are”fear-based” and full of emotions, no longer rational thinking.  Plagued by CNBC,CNN, you name it, fueling their fears, along with financial gurus saying that you should get out of the markets now as the markets will continue to fail.  While some of this fear is justified, it is quite clear that the media and those financial gurus, like Suze Orman, are adding gasoline to the fire.  It would be nice if they were held responsible for their fear driving tactics and subsequent impact on the markets.

The Treasury and Federal Reserve didn’t help mortgage backed securities today since they added supply to the equation.  The Treasury is beginning to auction off the $700 billion, and the Feds continue to supply money through the TSLF (Term Securities Lending Facility).  Treasury Secretary Paulson opened his mouth to say that more banks will fail and that the economy faces more difficulties ahead.

As traders remain fearful of the future and getting out of every market imaginable, except for gold anyway, we can only look forward to higher mortgage rates, possibly even higher inflation ahead.

{ 1 comment… read it below or add one }

Vic Burek October 11, 2008 at 7:21 am

I enjoy reading your blog, i dont visit everyday but try to make sure i read each post like i am today(Sat.) I also am in the mortgage business, been through cmps as well.

Incredible times right now which makes working with a cmps even more important.

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