Oh, What A Market

I don't know about you but I am excited to be heading into the weekend, I need a break from this wild ride that is the stock market...it is giving me whiplash! This last week of January has been a big reporting week and the markets have been up and down daily, hourly, minute by minute.

Today was about jobs, and the projection was 70,000 new jobs! Well that didn't happen, in January we actually showed a loss of 17,000 jobs we haven't shown a negative jobs number since August of 2003, but don't get on the Recession Train just yet. You need to know that the last few month's we have significantly revised those job numbers after they came out. November was revised down and December revised up which combined equaled 11,000 new jobs.

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Now get prepared for that double take... we have lost jobs but unemployment is down and average hourly earnings are up a bit as are overall earnings. So we lost jobs but we have less unemployed people and those employed people are making more money, how does that work?!? Moral of the story don't believe everything you see and hear because Toad's Wild Ride is nothing compared to this schizophrenic market.

There is talk of downgrading 2 major bond insurers and the S&P down grading billions in mortgage backed securities, well the S&P has downgraded some but the bond insurers are on hold. What does this mean to be downgraded well lets go back to school, you write a report in your English class and the teacher gives you an A. Nice job! Well then the teacher reads another student's paper and realizes there are some disturbing similarities, he goes back to your paper and brings your grade down to a D minus. Ouch! That is what they are talking about doing to the bond insurers that backed securities based on our mortgages. They are saying that what they have may not be as good as what they thought. They may also not be able to afford to cover the bad apples, this is not good. If all this downgrading happens it would hurt some major companies and lenders, could even put them under.

What does all this mean for mortgage interest rates....well they are seesawing right now, one moment they are up and then the next they are down but they are staying in the same range. Remember the bond market is more than just the 10 year Treasury Note, mortgage rates often trend the same way, but they are based off of the bond market and mortgage backed securities. So with the ups and downs in the stock market, the confusing economic indicators, and the bewildering moves of the Fed those investors in the bond market are treading water.

If you are purchasing or refinancing a home and you have a rate that works for you take it...don't wait, you will go mad! If rates go down even more later and you have a long term outlook on your mortgage then refinance, but if rates go back up and you didn't take the low rates we have now there is no going back.

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