Update #2/ Week of March 15, 2010

Good Morning Everyone and Happy Tuesday! Would it be redundant to say that markets are flat again this morning? Actually, equity markets made up their losses after our rate sheets went out yesterday and were able to close in positive territory for the 5th straight session. Today, although the gains are hardly impressive, all equity indices are in positive territory. Fortunately for us, credit markets are improved from yesterday and our pricing is slightly better than yesterday’s (by anywhere from .02 bps to .08 bps), but an improvement none the less.

Markets are patiently awaiting the decision by the Feds which is due at 11:15 this morning. No surprises are expected, although investors and analysts will be dissecting the accompanying remarks to see if there are any clues for future moves. It can only move in one direction, since the current Fed funds target rate is 0.0 to .25% -- pretty low. Commentators are also looking for any dissenting governors like Kansas City’s Fed Governor who is pushing already for the Feds to raise their target rate.

In Economic News this morning, Import Prices fell in February at a rate of .3% m-o-m, a little more than the .2% drop anticipated. This follows an impressive jump in January (revised today) of 1.3% increase over the previous month. Housing Starts drop again . . . February’s number came in 5.9% lower compared to January representing an annualized rate of 575K units. Analysts were looking for a drop, and the number actually came in a bit higher than the 570K units for which they were looking. However, January’s numbers were revised upwards to 611K units (annualized), so the decline of 5.9% was worse than the anticipated 3.6% -- did that make sense? Building permits fell again in February by 1.6% m-o-m . . . slightly better than the 3.4% drop experts were predicting.

We were told this morning on CNBC’s Morning Call that 3 out of 4 homes on the real estate market are foreclosures. Interesting. Makes it hard for sellers to establish a market price. We don’t really have a traditional buyer/seller interaction taking place. And we all know there are thousands upon thousands of properties still owned by the banks that need to come to market. Thus, a true equilibrium price that economists like to see, is still a moving target.

Gold prices are up about $20 today, silver is up, oil is up, the dollar is weak . . . this typically points to a strong equity rally, but such is not really the case. Traders seem to be satisfied with finishing out the quarter nice and steady. The Dow is up about 230 points for the year, however, it still has about 67 points to go to match the high for 2010 set on Jan 19.

I will be in the office all day today. Call me here or better yet email me if I can help you . Have a terrific Tuesday and a very prosperous rest of the week!