Mortgage Market Update for the week of October 13, 2008

Here is the Mortgage Market Update for the week of October 13, 2008 brought to you by Larry Iest of Hemet Mortgage.

LAST WEEK

Last week was a historic in all of the financial markets. The volatility in the stock and bond markets charts look like a roller coaster at Magic Mountain.  The Government tried to support the markets with many measures. They passed the $700 Billion Rescue bill and the Federal Reserve announced plans to purchase short -term commercial paper to help business finance there day-to-day operation and they cut the Fed Funds Rate on Wednesday. This was not a normal Fed Rate cut, this was a coordinated global rate cut as the financial crisis is not just a problem in the USA, it is a global issue. Speaking of international they called an emergency G8 meeting bringing the big international countries together to work on solutions to this problem.  As a result of all the turmoil and lack of confidence mortgage rates increased last week.

THIS WEEK

This week will be a holiday shortened week with the bond market taking a much needed break and closing on Monday to observe the Columbus Day Holiday. Monday the heads of the major Wall St financial firms are gathering at the US Treasury to discuss how the Government can be of more help to try to stabilize the markets, possibly by injecting cash into the major U.S. Financial intuitions.  The information will come flying Wednesday with the release of the Producer Price Index (PPI) measuring inflation at the producer level on the economy and retail sales for September. That will give us a look to see how the consumer is holding up through the financial crisis.  Thursday we have another big report with the release of Consumer Price Index (CPI) taking a look at inflation at the very important consumer level of the economy. Friday we will get a peak into the health of the housing sector with the release of September's Housing Starts and Building Permit reports. On top of all of these very important reports any breaks in the financial crisis will move markets.