Final Update/ Week of October 12, 2009

Good Morning Everyone and Happy Friday! Finally we get a little relief in credit markets this morning. The stock market has had an impressive week of gains highlighted by Wednesday’s run up on the Dow of 144 points. Yesterday the bulls were able to hold on to their gains, but today, the task seems to be too great. Equity markets have been bolstered for months now by the large amount of cash traders have to meet every dip. It appears such is the case today. When we hit 9950 on the Dow, there was a definite floor and the bears have had a hard time breaking through that barrier.

For us, credit markets are making up some of the losses we incurred this week, so pricing is slightly better than yesterday. But . . . this is a Friday and investors are typically not aggressive on Fridays, so pricing is pretty flat. Traders have some economic news to digest this morning along with lots of earnings reports. September’s capacity utilization rose to 70.5%, better than the 69.8% anticipated. Industrial production rose .7%, better than the .2% expected. This report has little affect on our world, but may have something to do with stocks stopping their slide.

What helped to perpetuate the slide in the first place was Michigan’s October Consumer Sentiment Survey which disappointed the markets by coming in at 69.4, much lower than the anticipated 73.3. Go figure . . . the stock market has done so well, and 401(k)’s are recovering all over the country and consumer sentiment drops. Crazy. Why do we even bother with these consumer sentiment and confidence reports any way?

Earnings reports from Bank of America and GE are the catalysts that started the plunge this morning (and maybe a little profit taking from the recent run up). General Electric actually beat the street, but comments about it’s Capital division (mortgage) and overall quality of the report caused disappointment.

Maybe it’s all a good excuse for investors and fund managers to shuffle their portfolios and take a little money off the table. As far as pricing goes, we basically stopped the bleeding from earlier this week with today’s pricing. Our conforming prices are about ½ of 1/8 better than yesterday . . . at least they’re not worse. I will be in the office all day today. Call me here if I can help you. Have a terrific Friday and a very restful and relaxing weekend!