Richard Sellers, Realtor DRE#01148405

Tuesday, May 26, 2009 7:20 AM

Price Trend: Neutral
Price Volatility: Moderate
_________________________________________________________________

Current Conditions: Today’s Economic Data (all times PST)

FNMA 4.5 101-12 (-1) Case-Shiller Home Price Index 6:00
GNMA 4.5 101-14 (-1) Consumer Confidence 7:00
10yr Yield 3.451%
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Commentary:

Bonds are currently at their lows of the morning after a much higher than expected Consumer Confidence
reading wiped out marginal gains seen after the release of disappointing home price data. The Case-Shiller
Home Price Index continued to show falling prices in all 20 of the cities which it measures. Consumer
Confidence surged this month as Americans seem to believe that the worst of the recession is behind them.
This has helped stocks and thus pushed bonds lower.



This Week’s Calendar:
Date ET Release For Actual Consens
us Prior
May
26 09:00
a.m. S&P/Case-Shiller Home
Price Index Mar -18.70% -18.4% -18.67%
May
26 10:00
a.m. Consumer Confidence May 54.9 42.6 40.8
May
27 10:00
a.m. Existing Home Sales Apr 4.65M 4.57M
May
28 08:30
a.m. Durable Goods Orders Apr 0.5% -0.8%
May
28 08:30
a.m. Durables, Ex-Transport Apr -0.3% -0.6%
May
28 08:30
a.m. Initial Claims 05/23 630K 631K
May
10:00

A wife was making a breakfast of fried eggs for her husband.  Suddenly, 
her husband burst into the kitchen.  'Careful,' he said, 'CAREFUL!  Put 
in some more butter!  Oh my gosh!  You're cooking too many at once.  
TOO MANY!  Turn them!  TURN THEM NOW!  We need more butter.  Oh my 
gosh!  WHERE are we going to get MORE BUTTER?  They're going to STICK!  
Careful..  CAREFUL!  I said be CAREFUL! You NEVER listen to me when 
you're cooking!  Never!  Turn them!  Hurry up!  Are you CRAZY?  Have 
you LOST your mind?  Don't forget to salt them.  You know you always 
forget to salt them.  Use the salt.  USE THE SALT!  THE SALT!'  The 
wife stared at him.
 
 
 
'What in the world is wrong with you?  You think I don't know how to 
fry a couple of eggs?'                The husband calmly replied, 'I 
just wanted to show you what it feels like when I'm driving.'
 
 

Market Outlook

Thursday, May 21, 2009

Price Trend: Neutral

Price Volatility: Moderate

Recommendation: Floating

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Current Conditions: Today’s Economic Data (all times PST)

FNMA 4.5 102-00 (+1) Jobless Claims 5:30

GNMA 4.5 102-03 (+0) Leading Indicators 7:00

10yr Yield 3.165% Philly Fed Survey 7:00

_________________________________________________________________

Commentary:

Bond prices are pretty flat this morning but are holding onto most of yesterday’s gains. Data released this morning has been uninspiring. The Index of Leading Economic Indicators came in higher than expected and did achieve its largest jump in a few years, but 70% of the data that makes up the index is known before its release so it doesn’t tend to move the market.

Yesterday’s rally was a result of the FOMC minutes. Several members of the Committee suggested picking up the pace of MBS and Treasury bond purchases at the last meeting. The Committee also tooka more negative outlook on the next few quarters. Both of these situations helped bonds.

With no data due out and a short session tomorrow it would not be surprising to see volumes thin out today. The weather in New York and Chicago looks decent so many traders will likely start their holiday weekend early.

This Week’s Calendar: