Friday, September 12, 2008

Rate Watch 9/8-9/11/08: Float and 9/12: Lock Bias

The market this past week after Monday included 3 days of Float recommendation and this morning it turned to a lock recommendation. The Bond market has been favorable this week because of the Freddie and Fannie Bailout (this is what it is being called-but in reality, the Government is insuring the Mortgage Backed Securities of these two HUGE companies with tax payer money). Once the liquidity returns, which is what is slowly happening this week and will continue for the next 18 months, as all of the non performing Mortgage Backed Securities work through the system, we will see a 'Normalcy' return to the Bond markets. It's complicated to say the least, but I will keep you updated on changes that are coming and any further direction change. Monday will be a good day to take note of my recommendation because it could be a leading indicator of the rate movement for the next couple of weeks.

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