ben bernankeAs the Mighty Ben Speaketh so the Market Goes!

Yes as most of you may be aware, Mr Bernanke made some comment during his speech he felt the economy was showing some signs of recovery and that a third Quantitative Easing is not likely. (QEIII) Is it accurate? Parts of it are but whats really amazing is that his power and position give him and his words (dissected to the Nth degree) a level of juice Google would die to have. So while I do agree the economy has "pieces/segments" that are doing better but after being 6 feet under sure 4 feet under is better but its still 4 feet under! So...

What immediately followed was on over exuberance of gargantuan proportion. We went from finally breaking through the glass ceiling of 103 on the FNMA 3.5 coupon to a disastrous close and with one comment and less than 2 hours watched what took 2 weeks to rebuild vanish into thin air with the FNMA 3.5 closing down almost 90 bps and ending the days session at a level from 2 weeks ago, 102.156! What this did to pricing was a hit near 1 full point to the cost of a loan. So if your loan was 200,000 and you locked this afternoon versus this morning your costs increased for the same loan close to 2000! Thats a tremendous amount of money on a small scale and what we are talking about is nationwide for the entire industry!

So let me ask you this...

  1. Is the economy that much better where you live?
  2. Is your personal economy that much better?
  3. Are those you deal with seeing gains (significant or minor)?
  4. are you seeing those out of work back to work (with valid work not mickey mouse short term employment)?
  5. Is the global economy as well as the US economy seeing the kind of significant recover needed to sustain a move this dramatic?

Well if the answers to those questions are YES then be prepared this could be a similar sign to the events of 10/10 when a speech that was over dissected started a sell off of epic proportion and the end result was an increase (albeit short/a few months) of almost 1.5%! yes not in costs but in RATE!

In the next few days ahead and, for your own personal indicator, if you think the answers to the above questions are YES then be prepared this could be the start of a huge bond hit. If the answer is a little but not really then this could be our new trading range for a while 102-103 for the FNMA 3.5 coupon. If your answer is NO then its very likely this was a gross overreaction to a statement and more specifically a sentence in that statement and we may see this dead cat bounce a bit tomorrow and in the next few days to come.

Regardless of the direction know this... The ride is going to be bumpy so please remain seated and fasten your seat belts!

us mortgages colorado 580 fico and low rate leader

 

Colorado 1st Time buyers, if you are ready to stop renting, get the many benefits from home ownership, or maybe your a current homeowner looking to move up or maybe looking into what it takes to become an investor in this incredible market, that WILL create millionaires, and you are looking for a strategy, answers and direction, please feel free to call or email me. My 18yrs in mortgage lending and 27 years in finance gives me an in depth knowledge, critical to helping others and making their dreams go from dream to reality!

David Shamansky
"Positive reinforcer, promoter, success coach, entrepreneur, team builder, wealth builder, blessed individual, business leader and professional lender"

US Mortgages
6855 S Havana St Ste 520
Centennial CO 80112
720-524-8020
NMLS#392126
Equal Housing Lender

*photos used may come from my personal pictures or www.freedigitalphotos.net

 

 
This post has been included in Colorado Real Estate News
Post is included in group: RE/MAX Active Rain Bloggers
Post is included in group: Market Reports
Post is included in group: ActiveRain Contests
Post is included in group: Keller Williams 'Rainers
Post is included in group: Active Rain Newbies

5 Comments on As the Mighty Ben Speaketh so the Market Goes!

APR
03
2012
584,963 Points 46 Featured Posts Outside Blog Called Shot Master

Sham Man -

This is a deep subject right before bedtime for this ole Realtor®.  To answer your questions in no particular order, yes, no, maybe so and I don't know.  I don't think anyone has the absolute answer.  We're all in this boat together and it's going to take time to dig ourselves out of the dark hole we've been in.  Over and passing out (I hope) for the night.
9:02pm • #1
1 Featured Post

We have been on a roller coaster ride for some time now - and the market here in my county seems to have bottomed out, but jobs are still hard to find, especially good paying ones. Inventory of homes are abundant with more homes going into foreclosure.
9:07pm • #2
392,117 Points Outside Blog

How can the economy ever improve when you have printed more money ten hold than the value of its holdings. I'm not sure what people think or want to think, other than living in lala land or watching MSNBC. One example Best Buy laying off and closing stores.  Oh the Barbisol Man is just a puppet for the establishment, just like the last flake Alan Greenspan. He too helped to destroy the economy, but nobody reads history anymore just the paid Government media.  

9:09pm • #3
374,478 Points 10 Featured Posts Outside Blog Hit Router Called Shot Master

John - Sorry but have mucho more energy tonight than last night and know I am going to have another very hectic day tomorrow so needed to get this out in space before I get swamped walking in the door tomorrow. Peace and sweet dreams (lol)

Carla - Yep my feelings exactly not enough juice to sustain this insane blow we took today but dont know the entire market on a national scale (other than raw data that is)

Winston - Agreed its disgusting whenever you want a real wake up call look at any and EVERYTHING done from the feds the last 30-40 years. Instead of regulation to help protect they take control add unnecessary and many times blatant illegal regulations, get them signed to make them "appear" legal, then take millions and millions for themselves, stick it to the consumer EVERY TIME and then act as if its ALL IN OUR BEST INTEREST!?!?! We have no money but we can hire on 16,000 IRS Agents as that makes MUCH MORE SENSE than just simplifying the tax code and making it a consumption tax so EVERYONE PAYS, even the drug dealers and criminals, as EVERYONE consumes but no the 16000 IRS (government employees) is a much better move?? Most States are near bankrupt yet the highest paid workers are the public ones not private industry ones? We need all these earmarked programs to study the affects of cows gas on the environment? We made a Billionaire in Al Gore for a made up Phenomenon called global warming? We take Wall Street Peeps from Goldman Sachs and give them Fed Jobs and people like Paulson helps create a housing bubble then shorts it and makes billions at the expense of everyone in the US!!! I am sick of it and until we stand united and kick the crooks out and take back of control of our country its just going to get worse. I dont like any of the candidates and feel the GOP is so poorly represented that Obama may get another 4 years. If so we wont make it through another term. We are barely scrapping by from this one and all he has this to hang his hat on... Bin Laden, Ghadaffi and the, hopefully, soon to be confirmed "ILLEGAL" ObamaCare to shine as his accomplishments??? WOW words cant express how poor we will be
9:35pm • #4
APR
04
2012
1,098,013 Points 25 Featured Posts Localism Sponsor Outside Blog Called Shot Master

David I do agree with your last sentence...Regardless of the direction ... The ride is going to be bumpy!
4:22pm • #5

Login or register to leave a comment
 
La_jolla_legoland_beach_fishpix08 Rainmaker_large

David Shamansky - Creative, Aggresive & 580 FICO - OK, Colorado Mortgage Lender

Centennial, CO

More about me…

US Mortgages - David Shamansky

Address: 6855 S Havana St Ste 520, Centennial, CO, 80112

Office Phone: (720) 524-8020

Email Me

Life, Lessons, Encouragment and a little market insight to boot, is a blog written by David Shamansky. I write this as a daily informational and encouragement resource to others in the real estate and mortgage community.


Listings

Links

Archives

RSS 2.0 Feed for this blog