MBS- FNMA 4.5 price: 101-10

10-yr Treasury Yield: 3.57%

After some upward pressure earlier in the week the pendulum is swinging back in favor of rates dropping.

Week 4, February 2010

I’ve been watching some of the Health Care Summit online this morning (online because where I’m watching it’s uninterrupted by the commercial propaganda that so peppers the television coverage) and I think it’s actually pertinent to the genre of my writings in this website.  Obviously, if it weren’t so complicated this healthcare challenge for each American family’s individual economy would have been resolved already, far better than what exists today.  But yes, it is complicated in its minutiae especially with regard to how philosophical agreements between the political parties can possibly be enacted in reality.  And yet the one thing we can all count on as a legitimate measure of well-being, no matter what our income level may be, is our health.  Our nation’s ability to overcome its economic challenges is directly fed by the health of our citizens.  According to the hearings today, there are as many as 40 million citizens with no health insurance at all; there are over 50 million who are covered, but who have “pre-existing conditions” that prevent them from ever changing insurance carriers; and premiums have soared for policy holders as the health insurance industry’s profits have increased by over 250% in the last decade.  This is the definition of the word “bilked”.  But today I am actually encouraged as I see the President and members of Congress thoughtfully discuss each other’s ideas and solutions.  I think this is, frankly, what we pay these ladies and gentlemen in government to DO.  But if you watch the commercial interruptions in the television coverage you’ll quickly see what well-funded sources stand in the way of reasonable discussions about solutions.  So for the sake of the American family, and by extension the American economy, I hope our well-insured and tax-payer funded members of Congress can create a far more reasonable set of ground rules for health insurance in this country where small businesses, and big businesses, and individuals alike all have a level playing field with regard to healthcare.  I can only speculate at this moment how freeing the market in this manner could possibly expand the opportunities for businesses and individuals to break free from the chains of health insurance policies, invest in their new ideas with the unthinkable risk of losing healthcare absent from their strategies, and fully implement the ONE COMMONLY AGREED UPON RECIPE FOR ECONOMIC RECOVERY:  INNOVATION.   Were it not for health insurance concerns, how many people would pursue more innovative ventures?  How many more ideas would be considered feasible?  How many more people can be considered for hire by small businesses?  How many citizens would be able to raise their level of well-being?  Do any of you think for a second that your opportunity to buy your dream home isn’t connected to your health and well-being?   

See here for how the Council on Foreign Relations believes our healthcare system leaves American businesses disadvantaged.

To contact me about financing your dream-home click here.

Weekend Wanderer’s Events

…finding the treasures in your town and beyond. 

Two for This Weekend:

Al Di Meola at the Palace of Fine Arts in SF:  From the Chronicle website: A technical virtuoso with uncommon soul and passion, Al Di Meola is on the shortlist of the world’s great guitarists. The World Sinfonia project, which was first recorded in 1990, showcases his brilliant acoustic guitar playing, while allowing Di Meola to explore various European, Latin and Middle Eastern influences.

Holi Festival of Colors in Dolores Park in SF:  Also from the Chronicle website: Friends of El Shadai is hosting second annual celebration of Holi. This colorful festival is celebrated all over South Asia. In certain areas it signifies the victory of benevolence over malevolence while in other regions it is celebrated as a symbol of love and understanding. Holi is celebrated with bright colors & water balloons.  Looks like a fun spot to go… starts at noon on Saturday. 

Help Your Fellow Living Beings:

Benefit Concert for Tutorpedia at The Connecticut Yankee in SF:  The Tutorpedia Foundation will host a benefit concert on February 27th at the Connecticut Yankee to raise money for free tutoring for low-income Bay Area students.  The fundraiser will feature local band Guella, a silent auction, and raffle. Featured auction items include gift certificates to local restaurants, spa treatments, weekend getaways, sports tickets and much more.

Two Weekends from Now:

Caddyshack Live at the Darkroom Theatre in SF: From their website:  Pandemonium reigns as lovable blowhard Al Czervik disrupts an idyllic snobatorium, The Bushwood Country Club, much to the chagrin of stuffy Judge Smails. Meanwhile, college-bound caddy Danny Noonan must decide whether it’s smarter to kiss up to Smails for the coveted Caddy Scholarship, or take the advice of semi-suave playboy Ty Webb and just be the ball.  You know the movie… see it performed live on Fridays and Saturdays 3/5-3/27.

Pic of the Week… from my phone camera:

A political meeting of the minds

From The New Republic:

What can the Obama administration do to alleviate this suffering? Turns out, it doesn’t need a new plan to modify mortgages, since there’s a very good old plan on the shelf.

The Great Depression did not begin with predatory mortgage lending, but economic conditions predictably led to a foreclosure crisis. More than 250,000 families lost their homes to foreclosure in 1932. And every day brought a thousand new foreclosures in the early months of 1933.

As part of its initial legislative barrage on the economic crisis, the Roosevelt administration created the Home Owners’ Loan Corporation (“HOLC”) in June of 1933, just three months after entering office. The HOLC purchased distressed mortgages from banks, and then negotiated new, more affordable mortgages with the homeowner. Before it ran out of capital in 1935, the HOLC purchased a little more than one million mortgages, or about one in six of the urban home mortgages. (There was a similar program for farm mortgages).

Homeowners applied to the HOLC to buy their mortgage, so the HOLC was able to pick and choose salvageable mortgages. HOLC mortgages required less equity than banks required (20 percent instead of 35 percent) and had lower interest rates (five percent instead of eight percent). The HOLC was indulgent of late or missed payments, and patiently worked with struggling borrowers to prevent default. Still, times were hard and almost 20 percent of HOLC’s mortgages ended in foreclosure.

When the last mortgage was paid off in 1951, the HOLC had turned a slight profit. Arthur M. Schlesinger, Jr., wrote that the HOLC “averted the threatened collapse of the real estate market and enabled financial institutions to return to the mortgage-lending business. … Most important of all, by enabling thousands of Americans to save their homes, it strengthened their stake both in the existing order and in the New Deal. Probably no single measure consolidated so much middle-class support for the Administration.”  Link to article…

From The New Republic:

Why would anyone regard 20 years of reckless expansion, a massive global crisis, and the most generous bailout in recorded history as the recipe for creating “right-sized” banks? There is absolutely no evidence, for example, that the increase in bank scale since the mid-’90s has brought social benefits. (There are no economies of scale for banks above $100 billion in total assets, but our biggest banks are now in the $800 billion$2 trillion range–and those figures do not properly account for their holdings of and potential losses on derivatives.) By contrast, the huge social costs are readily apparent–in terms of direct financial rescues, the fiscal stimulus needed to prevent another Great Depression, and the appalling number of lost jobs (eight million gone since December 2007, and still counting). Volcker Rules or no, the president apparently still doesn’t get this.  Link to article…

MBS- FNMA 4.5 price: 100-22

10-yr Treasury Yield: 3.67%

We may well see some improving conditions today.  Yesterday went in the right direction, and the bond market yield continues to decrease today.

MBS- FNMA 4.5 price: 100-25

10-yr Treasury Yield: 3.73%

Seeing modest improvement today so far.  Maybe we’ll see some pricing breaks today.

MBS- FNMA 4.5 price: 100-12

10-yr Treasury Yield: 3.79%

Ever so slight improvement vs. Friday.  We’ll see where it goes today.

MBS- FNMA 4.5 price: 100-02

10-yr Treasury Yield: 3.80%

Big jumps in both of these today, everyone.  Rates will likely climb in today’s market. 

Week 3, February 2010

Well… there’s a bit of a storm brewing just barely beyond the horizon that you should be aware of if you’re buying or refinancing a home in the coming weeks.  Since mortgage rates don’t typically wait around for market conditions to change I think it’s important for you all to know about two changes coming that are expected to affect the mortgage and housing markets.  First, the program for buying mortgage-backed securities instituted by the Federal Reserve in  January of 2009 will reach the end of its extension on March 31^st of this year.  What that means is a major source of demand for this particular security is scheduled to recede leaving the price to fall and the yields to rise— which to you and me usually equates to higher mortgage rates.  It was originally set to expire at the end of December but was extended to the end of March to ease its impact on the housing market.  Impossible to predict the real impact of this change, but it’s one to be aware of, for sure.  Secondly, the $8,000 First-time Homebuyers Federal Tax Credit, which was modified to include a $6,500 tax credit for previous homeowners too, is set to expire at the end of April.  The effect expected there?  Slower home sales in May, June, and July, so they say.  But “they” also say that it’s likely there could be another six month extension of that.  We’ll keep an eye pealed.  Bottom line is that there are some legitimate changes to market conditions coming quite soon, so it shouldn’t be surprising to see rates steadily tick upward for the coming weeks.  That is, assuming all remains constant in a vacuum— which we all know isn’t how real life is anyway.  So, we’ll just have to see how it all plays out.  And as usual, I’ll keep you apprised of what I’m seeing. 

See here for more about what market changes are expected soon.

To contact me about financing your dream-home click here.

Weekend Wanderer’s Events

…finding the treasures in your town and beyond. 

Two for This Weekend:

2010 San Francisco Bluegrass and Old Time Festival:  From their website: A nine-day festival occurring at various locations around the Bay Area, is in full swing. Featuring the most talented musicians on the Americana and roots music scene today, the Festival comprises over 30 shows at numerous small clubs around the Bay Area, welcoming more than 5,000 attendees each year.

Cynosure at Ryder Worth Gallery at UC Berkeley: Okay… the link for this one actually goes to the East Bay Express since the Berkeley Art Practice Department doesn’t quite have the online info for this posted for some reason.  From the EB Express: A cynosure attracts all eyes, and this show at UC Berkeley Art Department’s gallery, subtitled “New Work from East Bay Galleries,” may be just that, showcasing thirty-something thirtyish emerging local artists selected by their galleries in consultation with curator AnuVikram.  Last chance to see this is Saturday.

Help Your Fellow Living Beings: 

FoundationForFreedom.org:  Their mission: To promote literacy in impoverished communities around the world through primary education for children.  We envision a world in which each and every child is literate regardless of geographic location or socioeconomic status.  We believe that education is the foundation from which the destitute are empowered to achieve the self-determination needed to improve their lives and the lives of those in their community.  Check ‘em out! 

 Two Weekends from Now: 

Sacred Space: Joshua Redman Solo Sax Performance at Grace Cathedral: From their website:  Redman occupies a special niche among the pantheon of SFJAZZ performers, having served as Artistic Director of the Spring Season for seven years. Now, ten years after his first solo performance here, Redman returns to Grace Cathedral and revisits music of the masters – Ellington, Monk, Shorter, Coltrane and others.

 Pic of the Week… from my phone camera:

I think you get the picture

MBS- FNMA 4.5 price: 100-29

10-yr Treasury Yield: 3.70%

From The Huffington Post:

Last week, when President Obama was asked about the $9 million bonus for Goldman Sachs CEO Lloyd Blankfein, he described Blankfein as a savvy businessman, adding that Americans don’t begrudge people being rewarded for success. While the White House later qualified Obama’s comment about Blankfein and his fellow bank executives, it’s worth examining more closely some of the ways in which Blankfein and the Goldman gang were “savvy.”  

Perhaps the Goldman gang’s best claim to savvy was in buying up hundreds of billions of dollars of mortgages and packaging them into mortgage backed securities, and more complex derivative instruments, and selling them all over the world. Blankfein and Goldman earned tens of billions of dollars on these deals. The great trick was that many of the loans put into these securities were issued by banks filling in phony information so that borrowers could get loans that they would not be able to repay. But this was not Goldman’s concern. They made money on the packaging and the selling of the securities.  Link to article…

MBS- FNMA 4.5 price: 100-27

10-yr Treasury Yield: 3.71%

From The Center for Responsive Politics:

In all, federal lobbyists’ clients spent more than $3.47 billion last year, often driven to Washington, D.C.’s power centers and halls of influence by political issues central to the age: health care reform, financial reform, energy policy.

That figure represents a more than 5 percent increase over $3.3 billion worth of federal lobbying recorded in 2008, the previous all-time annual high for lobbying expenditures. And it comes in a year when a recession persisted, the dollar’s value against major foreign currencies declined and joblessness rates increased.  Link to article…

MBS- FNMA 4.5 price: 100-28

10-yr Treasury Yield: 3.68%

Week 2, February 2010

Commenting on the $9 million pay for Lloyd Blankfein, CEO of Goldman Sachs, and $17 million pay for Jamie Dimon, CEO of JP Morgan/Chase, President Obama was quoted as saying: “I know both those guys. They’re very savvy businessmen. And I, like most of the American people, don’t begrudge people success or wealth. That’s part of the free market system.”   Evidently, he pointed out that some baseball players make more than that— as if that should assuage any of us who take issue with this perspective.  On the latter point, should we point out to President Obama that BASEBALL PLAYERS WERE NOT BAILED OUT BY THE TAXPAYER!?!?

On the former point, it’s more than well-known that these “savvy businessmen” turn money into more money.  That’s what they do.  And without question, in 2009 they took the opportunity they had and brought home some handsome profits for themselves and for their shareholders.  Bravo.  But, let’s not confuse this with the “Free Market”.  In a free market, these guys would all be the FORMER heads of the FORMER investment banking titans of the United States.  In a truly free market, if the government wanted to pour billions of dollars into bailouts, maybe it could have given that money to the consumer (with conditions, of course) so that THE CONSUMER could choose FREELY to whom they wanted to give their business.  In that model, the free-market model, the commercial banks are competing, are probably lowering prices and innovating products, and are probably touting their superior customer service to win YOUR business.  Arguably, some smaller banks would have a chance in that game as well.  Savvy?  (As Captain Jack Sparrow would say.) 

What we have instead is a top-tier banking system that’s been resuscitated by taxpayer funding.  Maybe it was a matter of national security, and if so it’s understandable to that end.  But we have a system that remains unchanged with regard to the regulation of derivatives and with regard to separating federally-insured banking from speculative investment banking.  And we have a massively re-funded government lobby for that same top tier that has just posted record profits for 2009.  It adds up to little change, if any, from the status quo if the top tier has its way.  Now that’s savvy, Dr. Evil style. 

And lastly, well over a year after the inception of TARP $30 billion from the fund is being allocated to community banks to aid in small business lending that the top tier evidently is not finding ways to accommodate?  Interesting.  If it was patriotic to save the top tier of banks— national security and all that— then what is patriotic about a top tier that cannot accommodate the needs of small business?  Who was it that saved them again?  Free market?  Baseball players?  You tell me. 

See here for more about what incomes your top tier bankers made in 2009.

To contact me about financing your dream-home click here.

Weekend Wanderer’s Events

…finding the treasures in your town and beyond. 

Two for This Weekend:

Lunar New Year Flower Market in SF:  To celebrate the Year of the Tiger, the San Francisco Botanical Garden Society will host its 11th Annual Lunar New Year Flower Market February 13 in the County Fair Building’s spacious gallery at 9th Avenue and Lincoln Way.  Happy Valentines Day, everyone! 

Sweethearts for Seva: Celebrate Valentines Day with an evening of musical duets featuring the legendary Joan Baez & Steve Earle, David & Tracy Grisman, Tuck & Patti with host Wavy Gravy. “Sweethearts for Seva”, Sunday February 14th at Bimbos 365 Club, a benefit for Seva Foundation. For more than thirty years Seva Foundation has served people around the world who are struggling for health, cultural survival and sustainable communities.

Help Your Fellow Living Beings: 

ValenFaas Day on Park Street in Alameda: The Friends of the Alameda Animal Shelter (FAAS) invite you to their St. ValenFaas Day Event Friday February 12th from 6:00 to 10:00 pm, on Park Street. Come and dine and shop for Valentines Day gifts at Books Inc., Daisy’s, Three Wishes and Tomatina’s. A portion of your purchase will be donated to FAAS which provides help for the homeless animals in the City of Alameda Animal Shelter.

Two Weekends from Now: 

2010 SF Chronicle Wine Competition Public Tasting: From the Chronicle:  February 20th at Fort Mason in the city by the Bay! Known as the largest competition of American wines in the world, the event invites guests to sample hundreds of award winners, each selected at the Annual Judging earlier this year, and delicious food for an afternoon of pure indulgence at THE social event of the season.

Pic of the Week… from my phone camera:

 I’ve been reading their book, so this one’s from Nepenthe, in Big Sur