Florida Mortgage Rates Report – Market Recap

by Florida's #1 Mortgage Planner on September 17, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  +41bp

As the day drug out, mortgage bonds finally mustered a little more strength as stocks tried to match their Monday drop of over 500 points on the DJIA, today ending down nearly 450.  It is now very apparent in the markets that more bailouts will be needed since the Fed has started a trend and none of the bailouts has restored investor confidence, rather it seems to be sparking a lack of confidence which is justified.

One very intriguing event that took place was a money market fund, once deemed a safe haven, fell below its $1 share value for the first time in 14 years.  The fund, named Reserve Primary Fund, was the first and oldest of the money market funds.  Since the loss was related to Lehman as the fund had a lot of assets tied up there, it will be interesting to see if the Fed changes their stance on bailing out Lehman like they did with AIG.

The disappointing fact is that mortgage bonds were unable to make any significant gains on a day when the DJIA got beat up along with more favorable news of late.  The charts are beginning to have a bit of a tired look to them, so I am skeptical of whether bonds can gain strength right now.

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