I read a TON of Economic Newsletters, watch CNBC, and Congressional hearings… I’m an economic junkie who misses Louis Rukeyser! I’m always looking to see if I can figure out which way rates are headed.
So when the President came on the news this week to announce that the war in Iraq was over, and the pundits started asking why it was only a 15 minute address – I was kinda’ let down, because I had also been expecting that he would take this chance to give folks a “Positive Message” when it comes to the markets.
Without that Presidential Guidance, I’m back to the Economic Numbers for insight. And here’s what they are telling me:
- “… the public is no longer investing in stocks, but rather in bonds. So far this year through July, bond mutual funds have attracted $224.4bn in net inflows including reinvested dividends. ” — Ed Yardeni, September 1, 2010.” Which means a Consumer Spending spree is not going to get the Economy going.
- “The Fed terminated the purchases of $1.25 trillion in GSE mortgages and mortgage-related paper in March. Simultaneously, the housing-purchases credit subsidy ceased in April. Housing went into relapse, as most economists expected. Simply put, subsidize something and you get more of it; remove the subsidy and you find that you have borrowed economic activity from the future, and now you get less of it.” Cumberland Advisors Which means ANOTHER Tax Credit is not going to get the Economy going.
- Case Shiller Numbers indicate that the Housing PRICEs actually went UP during the 2nd quarter. “While some may see these price gains from the trough as a sign of bouncing along the bottom, most experts believe home prices nationally will fall again, but not necessarily immediately.” Which means the Housing Market is not going to get the Economy going.
- Private sector employment decreased by 10,000 from July to August on a seasonally adjusted basis… and today’s non-farm payroll job’s numbers showed 54,000 jobs lost in August (many of those from the Census Jobs that are gone). So there’s not a surge of Employment to get the Economy going.
So was it just that the President didn’t have any positive news… or does he know something we don’t know? One of my favorite charts is the Four Bad Bears.
As you look at this chart – this “Bear” looks just like the other three. Maybe we ARE heading into a little dip – but it’s not really that’s alarming! When you stop just looking at the headlines, and you look at the long term trend… things are not sky rocketing up, but they don’t look that bad! We are going to have a slowly improving picture!
Mortgage Interest Rates typically get LOWER when there’s BAD NEWS in the Economy… and they go UP when there’s good news. Believe it or not – the last three days we’ve had higher rates! The Dow is Happy!
That’s not good news if you are waiting to Refinance! NOW is probably the time to do it!
If you are considering a Refinance, call Steve and Eleanor Thorne, 919-649-5058 We have the best rates available, we offer FHA Streamline Refinances, Conventional financing, USDA Home Loans and VA Mortgage Loans!
I try and answer all questions :)