Friday, August 08, 2008
With Fannie Mae announcing that their second quarter earnings were three times less than what analysts expected and their CEO stating that they are expecting it to get worse, it would seem logical that the bond and stock market would follow past trends and would both tank... ummm no. Both the bond and stock market has rallied on from what can only be explained as an oil hangover. Oil has fallen down to the $116 range dropping almost $4 today. Now if they will just drop the price of gas as fast as they raise it (that would be another report though). Currently the DOW is up nearly 300 points, and the bond is still up more than 20 Bp. It is all over good news when we have a major rally on the DOW and still hold on to the positive gains in the FNMA 5.5%. It is a float day on rates, but be real careful as sometimes traders sell off on Friday jus to be safe.
On a side note, the company I normally use to get the bond trading information is shutting its doors effective today. I don't mention it as doom and gloom, but rather a sign that this market is affecting all aspects of the housing industry. YOU ARE NOT ALONE!! Keep your chin up and remember that with approximately 7 babies born every second, by default the economy will get better, people will buy more houses, and our commissions will improve.
Karl Menzer
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