Final Update/ Week of October 19, 2009

Good Morning Everyone and Happy Friday! We’ve become accustomed of late to seeing the stock market drop 1%, only to rebound the next day (or by the end of the day) and make up it’s losses. Bulls just don’t want to let this market correct the 5-10% so many analysts are predicting. Yesterday was a recovery of the day before, today a response to yesterday’s over recovery. Today stocks fell out of bed early this morning, and are struggling to get to their feet in the last hour or so. Credit markets fell out of the other side of the bed and are struggling just the same. Fortunately, mortgage rates are flat.

Amazon and Netflix both reported earnings that are creating a lot of excitement on the trading floor today. These companies are benefitting, as we discussed yesterday, from the fact that fewer consumers are going out on the town and are staying home to read a book or watch a good movie. Amazon is setting a 10 year high today on it’s stock price. However, Microsoft, Honeywell, Whirlpool and a slew of other companies are reporting good earnings reports too, widely expected per our conversations recently. Companies are much leaner and have propensity for profit. Those that produced 10,000 units of whatever product with 1000 workers a couple years ago, now are producing 5,000 units with 300 workers. The numbers just make sense and shouldn’t be a surprise to anyone.

The only economic report of note is September Existing Home sales data which came in at an annualized rate of 5.57M – better than the 5.35M anticipated. It’s sure hard for good news in housing data to get much traction now days with all the bad news everywhere. Although, we did get some good news from one of our investors who lifted the declining markets LTV reduction for our region of the country on it’s Jumbo product. Any stabilization is good news.

Rates aren’t as bad as what they could have been seeing what’s going on in the treasury markets. We did get some nominal price improvements from some of our sources yesterday afternoon, but have given back those gains this morning. We’re pretty much flat on the fees for pricing on our conforming rates today from yesterday morning. I will be in the office all day today. Call me here if I can help you out in any way. Have a terrific Friday and a very restful and relaxing weekend. It’s supposed to be beautiful weather the next couple days!