DANCING WITH THE.....ECONOMIC UPDATE

The U. S. stock market jived to a different beat than the rest of the world all week. Friday was a banner day for Wall Street even though Citigroup, Chase, and Merrill Lynch posted gut wrenching losses with amounts that are unprintable. What the stock market heard is “the losses were not as severe as projected” and did a little boogie that made for one of best days for stocks in several years. Even the unexpected jump in the world’s most widely used interest rate; the London interbank offered rate (Libor) could not dampen the market’s happy feet. Those of us that have some sort of adjustable rate mortgage do not feel like dancing. The music that would get our feet tapping would be “Please lower the A.R.M. rates so we can afford our homes when our rates adjust tune” or maybe the more popular “You have to lower the rates so our buyers can afford their homes”. Now that would make us feel like dancing! FYI: Banks added on fees for investor loans effective immediately which translates into higher interest rates for all investors. Fannie Mae and Freddie Mac are discontinuing all no income verified or “stated income” programs regardless of credit scores and down payment. Several banks have “portfolio products” that will still offer “stated” programs.