Update #1/ Week of December 7, 2009

Good Afternoon Everyone and Happy Monday! We talked last week about how the credit markets really over reacted on Thursday and Friday in price due to no particular movement in the stock markets. The credit markets are making up some ground today and our pricing is about (.375) to (.500) better in fee making up some of the losses from late last week. I can remember last year in December being a good month to lock loans, and it appears it will be the same again this year. Several Treasury auctions will be taking place this week, and are potential market movers. Traders will be keeping a close eye on these auctions to see what kind demand is still out there for these securities. This will have an impact on our pricing later this week.

There are no major economic news releases this morning. Ben Bernanke spoke today to the Economic Club of Washington D.C. and market participants are looking for any comments that might signal intentions by the Feds to raise interest rates after the first of the year. Apparently, nothing so far. If he does hint in that direction, it will be painful for us as far as rates go, but there doesn’t seem to be much impetus for that action at this point. Citibank has joined B of A in wanting to pay back the TARP money lent to them last year. So far the gov’t hasn’t wanted to see this money paid back, fearing another dip in financial risk next year. The fact that these two banking giants are in a position to do so, though, is comforting to many.

Gold continues to drop as signs of an improving economy with Friday’s very surprising unemployment report goes to show. Oil prices are dropping, too, which will provide some relief at the pump for the holiday driving season.

Have a prosperous and profitable week!