News From Ara MELKONIANS/ Week of 8/23/2010/ Update #1

Good Morning Everyone and Happy Monday! Last week was almost a wash for traders on Wall Street. The Dow lost a mere 89 points for the week, the NASDAQ gained 7 points and the S&P lost 7. However, credit markets improved and pricing improved . . . and oil prices dropped . . . what's there to complain about? Refinance applications are up and turn times at the wholesale shops are getting longer and longer. I guess that's good news for all of us.
At the combined CAMP and CMBA conference last week there was a presentation by an economist from Stewart Title. He showed a very interesting graph up on the screen about the amount of money that borrowers can finance at these low rates. That same amount of principle drops about 5% for every .50 of a point rise in rate. Thus, if average rates go up 2% points (from 4% to 6%), borrowing power (the amount financed possible) drops by 20%. Hence, this is the time to refinance… Borrowers can keep their payments low and borrow so much more at these rates today!

No major economic news releases are on tap for today, so markets are reacting to some M&A activity taking place this morning in the corporate board rooms of companies like HP, Dell, Campbell's soup and Miller beer (not all bidding for the same acquisitions of course). Look for markets to be adrift all day today as traders basically have rumors on which to gauge their direction. Credit markets are good, but volatility indexes are tough to read.

I hope you have a terrific Monday, and a very profitable and prosperous week!