Trading activity in the mortgage market this morning is light as most investors have moved to the sidelines to await the results of today's general elections.   As they wait, market participants will begin playing "what-if" games as they try to visualize what a Democratic or Republican victory might mean in terms of its impact on the direction of mortgage interest rates - and will probably discover that it really doesn't matter much.

 No matter the outcome of today's elections, Uncle Sam is staring at the prospects of needing to borrow a staggering $2.1 trillion in the current fiscal year to fund economic rescue programs.  Yesterday the Treasury Department said it would need to borrow a record $550 billion in the October - December quarter alone. 

 Since Uncle Sam has the unique power to tax and print money he is not particularly concerned about the interest rate he'll have to pay to acquire the capital he is looking for.  For the rest of us, particularly those of us in the mortgage market, who compete with Uncle Sam to attract capital from essentially the same investor base -- rising rates on government debt obligations will almost certainly put upward pressure on our mortgage interest rates - no matter which party controls the White House and/or what the Congressional party balance happens to look like.

Today's conforming 30 year fixed rate is at 6.50%.   Vote!