Two Minutes with Todd - 11.3.08. The Fed at 1% - what's next...

Hi Team – bribery for your opinion – see below!

First I want to welcome all of my new subscribers and to thank everyone who has referred new viewers and new clients this week. I truly appreciate it. (Hint – hit the “forward to a friend” button when done viewing if you haven’t already)

The big question has been answered - the Federal Funds rate now stands at 1.0%. Hong Kong, Japan and Taiwan also cut their lending rates. Other countries are expected to follow this week. This global participation is important – if you remember the last rate cut it was coordinated with many other European banks. This stabilizes the U.S. Dollar versus foreign currencies. It is especially important now as oil is denominated in U.S. Dollars – so the global moves should keep oil prices in check at least with regards to currency fluctuation.

The Freddie Mac Primary Mortgage Market Survey for last week is up in both rate and fee - 6.46% with .7% Fees/Points for a 30 year fixed rate loan (down from 6.04% with .6% Fees/Points). The 15 year fixed rate was 6.19% with .7% Fees/Points (up from 5.72 % with.6% Fees/Points).

There are a few "high impact" reports this week with the “jobs report” on Friday setting the stage for the coming month. At the risk of repeating myself for the umpteenth week in a row – this report may be overshadowed by everything else that is going on with the economy. Richmond Federal Reserve President Jeffrey Lacker did acknowledge this morning that he believes we are in a recession. Wow- glad the Fed is catching on. The high impact report of today is the ISM Manufacturing Index. A reading below 50 indicates that manufacturing is contracting. Economists were expecting a reading in the low 40’s and it came in at only 38.9 – ouch. However, this hasn’t really given support to bonds like it usually would. The ADP jobs report will be out on Wednesday and will be watched for an indication as to how Friday’s big jobs report may look. After posting job loses for September of 159,000 last month, they are expect to post losses of almost 200,000 jobs last month. Mix in with that some HUGE treasury auctions this week and we have the fixings for more volatility.

Yes team, I am not above bribery when it comes to getting your opinion on how I can improve and how I can serve you better. Two tickets for next Monday’s Suns Game (sorry for those of you not here in the Valley of the Sun) will be drawn at random from all the respondents. Please hit the “submit a comment” button on the right and let me know your opinion on my weekly video update. Is it too long, too short, too boring, too technical, not technical enough? Should I do a weekly wrap up, “special edition” videos on big market days? Anything else that you think would make

As always I'm here for questions, comments, and concerns. Have a great week.
Todd

Todd Bookspan
Certified Mortgage Planner
(602) 522-9494