Risks favor: Floating, with a finger on lock trigger
Current Price of FNMA 6% Bond: $100.12, +19bp
Mortgage Bonds are trading a bit higher, but already far off the best levels of the day.
In a speech this morning, Richmond Fed President Jeffrey "The Dissenter" Lacker, said the US economy was definitely in a recession, but he believed it would be fairly moderate in size. "We are in a contraction. Up until the summer it was a fairly mild recession,". Mr. Lacker, is not a voting Fed member, but he will be back in the voting rotation in 2009.
The ISM Index for October was reported at 38.9, which was much worse than expectations of 42. And even after the poor economic news, Mortgage Bonds failed to improve.
Technically, Bond prices indicate indecision among Traders. The last five trading days show a sideways trading pattern, hovering near support. We will float for now, but be ready to lock in this jittery environment.
Here is a link to the economic calendar for this week. http://www.bloomberg.com/markets/ecalendar/index.html
BY THE NUMBER$
We hope you enjoy this edition of "BY THE NUMBERS" below - use these as talking points with your clients and referral partners this week
1. A TIE? - There are 538 electoral votes at stake in tomorrow's election. It will take 270 electoral votes to win the Presidency. There has been a tie in the Electoral College voting only one time in the nation's history. In 1800, both Thomas Jefferson and Aaron Burr each received 73 electoral votes (source: PresidentElect.org).
2. SENATE TO THE WHITE HOUSE - Only 2 Presidents in the history of our country have ever gone directly from the Senate to the White House. They were Warren Harding (President # 29) and John Kennedy (President # 35). Both John McCain and Barack Obama are US Senators and one of them will become US President # 44 (source: WhiteHouse.gov).
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Greg Adelman
Midwest Home Center LLC.
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3. MAJORITY VOTE - The 2004 presidential election broke a streak of 3 consecutive elections where no candidate won 50% of the popular vote. President George Bush won the last election with 50.7% of the national vote. Bill Clinton won the 1992 election with 43.0% of the vote and then won reelection in 1996 with 49.2% of the vote. President Bush won the 2000 election with 47.9% of the popular vote. Before 1992, the last President to win the White House with less than 50% of the vote was Richard Nixon in 1968 (source: PresidentElect.org).
4. SOUTHERN DEMOCRATS - The last Democrat to win the White House that wasn't from the South was John Kennedy (1960). Since 1964, the 3 Democrats that have won the White House have been from the South. The 3 are Lyndon Johnson (Texas), Jimmy Carter (Georgia) and Bill Clinton (Arkansas) (source: WhiteHouse.gov).
5. WE'RE OPTIMISTIC - A majority of Americans have a positive opinion of both presidential candidates, as indicated by the favorability rating of both Barack Obama (61%) and John McCain (57%) from a survey released on Friday 10/24/08 (source: Gallup, USA Today).
6. THE BUCKEYE INDICATOR - The candidate that has carried the state of Ohio has won the White House for the last 11 presidential elections. The last time that the winner of Ohio did not win the White House was Richard Nixon in 1960. Nixon beat John Kennedy in Ohio but Kennedy won the White House (source: PresidentElect.org).
7. 60-VOTE SENATE - If either political party was to achieve 60 votes in the 100-member Senate that party would be able to stop a filibuster by the minority party, or end floor debate and bring any proposed legislation to a vote. The last time when either party had a filibuster-proof majority in the Senate resulted from the 1976 elections when the Democrats achieved a 61-vote majority (source: Senate).
8. SONS IN THE MILITARY - John McCain, Sarah Palin and Joe Biden each have a son that is currently serving in the military. Jimmy McCain is in the Marines, Track Palin is in the Army and Beau Biden is a military attorney with the Delaware National Guard. The last US president to have a child serve in the military during his term in office was Dwight Eisenhower, our 34th president (source: Wall Street Journal).
9. SHORT LIST - 1,000 days before tomorrow's presidential election (i.e., 2/08/06), the most widely read newspaper in the USA had a story documenting the 20 most likely Republican and Democratic candidates for the White House in 2008. John McCain and Joe Biden were on that list but Barack Obama wasn't (source: USA Today).
10. REPUBLICAN VP - In a 7/26/08 Wall Street Journal article, the potential selection of Sarah Palin to be John McCain's VP was described as a possibility if he wanted to "go outside the box." The selection of Governor Palin was announced on 8/29/08 in Dayton, OH (source: Wall Street Journal).
11. WHERE IT BEGAN - Barack Obama announced his run for the White House in Springfield, IL on 2/10/07, almost exactly 146 years after Abe Lincoln did the same thing in the same city. John McCain announced his candidacy on 2/28/07 on the David Letterman Show (source: BTN Research).
12. ON THE JOB EARLY - Secret Service protection for presidential candidates is not required by law until 120 days before the November election date, or as of 7/08/08 for the 2008 election. The Homeland Security Department can authorize earlier coverage and did so on 5/03/07 for Barack Obama. John McCain accepted the government's protection on 4/27/08 (source: Houston Chronicle).
13. YALIES - Every president since 1988 has earned a degree from Yale (source: PresidentElect.org).
14. WIDE OPEN RACE - The 2008 presidential race is the first time since 1952 that no current president or vice president is running for the White House (source: PresidentElect.org).
15. PERSONAL STATS - Democrat Barack Obama stands 6 feet, 1 ½ inches, more than a ½ foot taller than Republican John McCain's 5 feet, 7 inch height. Both gentlemen are left-handed (source: Wall Street Journal).
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