Update #2/ Week of November 9, 2009

Good Morning Everyone and Happy Tuesday! After a bull run yesterday on the stock market, traders are dogpaddling like mad to keep their nose above the water line. This morning we’ve been up and down all over the unchanged mark, but neither the bulls or the bears can seem to make any headway -- credit markets are flat as well. Credit markets were surprisingly flat yesterday as equity markets posted some nice gains. .

It’s not typically that way. Usually we can enjoy a refi boon when the stock market is crashing, and when we’re slow with higher rates, we’re often benefitting from a rising equity market for our investments. This phenomenon is one of the great things we all enjoy about being in the industry (those of us that are left). There is an auction of $25B in 10-year T notes this morning, the results of which could have an impact on pricing.

There are no economic news releases today of note. The few minor earnings reports have been mixed, so there have been no fuel for the markets to run. A breather may be in order again for today. The NAR reported this morning that home sales are up 6% nation wide and the average (median) home price nationally is down 11% from Q3 of last year.

San Francisco Fed Chief Yellon yesterday told us that the economic recovery will be slow due to unemployment and lack of consumer’s being able to purchase goods. Wow . . . what a news flash. We used to think our recovery would be a “V” shape, then economists moved to a “U” shaped recovery earlier this year. Most recently we heard talk of a recovery that would be more like a “W”, and yesterday Yellon described the future recover now as a “tilted ‘L’.” What letter is next? I feel like we’re on Sesame Street! “This economic recovery is brought to you by the letters, V, U, W and L.” Anyway . . .

I will be in the office all day today. We have a monthly mortgage sales dept meeting at 2, so I will be unavailable for an hour or so at that time. Have a terrific Tuesday!