Update #3/ Week of December 14, 2009

Good Afternoon Everyone and Happy Wednesday! The markets are generally flat again today . . . we were up 30 on the Dow on Monday, down 50 yesterday, up 30 today . . . no real direction, and we expect that to be the case for the rest of the year. Treasuries just in the last hour have moved well into positive territory. We all await the FOMC announcement due to be released in about an hour and ½ . . . no surprises anticipated here, but if credit markets continue to improve, we should be seeing some price improvements this afternoon. Our rebates today are only slightly better than those of yesterday’s rate sheet.

The markets received some good news this morning . . . and even more surprising, the economic news releases were in line with expectations! Imagine that . . . the experts finally got it right today. The first bit of economic news is the CPI for November which showed a rise of .4% month over month – in line with expectations. Remember yesterday we learned that the Producers have seen a spike in prices . . . but the months previous this was not the case. This is the reason that the Consumer Price Index is still tame. Let’s hope we don’t see a similar spike in CPI 4-6 months from now. That would be a real killer for the recovery, and something the Feds are very concerned about – it its their # 1 job.

Housing starts for November posted an annualized rate of 574K – in line with expectations (actually right on the money) and this is up from a dismal 527K reported in October. Building permits for November rose to 584,000 which topped expectations of 570K, and much better than the 551K posted in October. If you remember, October’s numbers were way off the previous months’ reports causing some alarm that housing was slowing even further. This month’s number has provided a lot of relief for those fears.

Again, we all wait to see if the FOMC announcement has any bearing on the market – more than likely it won’t, but should give some comfort to the credit markets. I expect we’ll get some improvement in pricing after the announcement. I will be in the office this morning… I will be available by cell phone after lunch, but if you want to catch me here at the office, catch me early. Have a terrific Humpday!