Final Update/ week of January 11, 2009

Good Morning Everyone and Happy Friday! We’re finally getting the moves in the market that we have been looking for all year. Maybe it’s a reaction to the economic news of the last couple days, maybe it’s traders pulling their bets off the table ahead of a 3 day weekend . . . but equities are sharply down this morning and that is helping the credit markets. The credit markets are gaining steam this morning so far, and pricing is getting better by the hour.

Yesterday’s initial jobless claims report surprised some analysts as they were looking for a seasonally adjusted number of 436K, but the number came in at 444K, up 10K from the week previous. Unemployment and this very weak Labor market continues to be a problem and will be for some time. Small business owners surveyed last week said they don’t see improvement for the rest of the year . . . that is, they are not planning to hire new labor. However, continuing claims continues to fall . . . now down to 4.6M, down 211k from the week previous. This could be a result of some falling off the unemployment assistance rolls.

Yesterday we learned that retail sales were down .3% in December according to the Commerce Dept. Remember, the consumer accounts for 2/3’s of the GDP for our country. Excluding the usual culprit of autos, retail sales were still down .2% -- not good.

This morning we learn that CPI for December increased .1% month-over-month, not as bad as the .2% anticipated by the experts. Inflation is a big concern going forward and economists are very in tune with this report. Oil prices continue to fall, which is good news for all of us. Intel reported good earnings after the bell last night, and so did JPM Chase this morning. However, Chase went on to express concerns about it’s quarter-over-quarter loss provisions. We learned yesterday that foreclosures are still on the rise in our country, so even though banks are profitable, their future potential losses are still a grave concern.

I enjoyed catching up with many of you yesterday. I am in back in the office today and am available for your loan scenario or pricing questions. We will be closed on Monday. Have a terrific Friday and a very restful and relaxing 3 day weekend!