Clint Hammond

My grandfather used to say that all the time. I've started to think it makes more sense lately. I feel like a blind man trying to get a grip on this market. John Thain, CEO of Merrill Lynch, said that this current global economic landscape is more similar to the 1929 environment leading into the Great Depression, not like the recent recessions of 87, 98, and 01. Considering none of us, or not that I know of anyway, were around and doing business then, that would clear up why no one seems to be able to get a grip on things. The "100% dead on" picks and predictions as to how things will react to certain reports or technical factors are now more lose theory and not "law" as they were once thought to be. The dismal jobs report last week is a perfect example. History tells us that with little to no deviation, that report should have sent the stock markets south and the bonds market on a surge. The opposite happened.....well, lets see said that blind man!

Today's market was packed even on Veterans day with the bond market closed. Stocks lost, perhaps some of that news from last week had time to digest. The Dow closed down 176 points closing at 8,693, the S&P closed 20 points lower than it opened at 898 and the NASDAQ shed 35 points to close trading at 1,580. We'll see what impact that has on bonds tomorrow morning when open for business again.

Today's tip; something you probably do in some way or another already. The tip is just to kick it up a notch.

Take your business cards everywhere and don't let anyone escape without getting one. Mail one back with your monthly bills, leave them with the receipt after you eat dinner out, gas stations, the gym, everywhere. Leave a trail that anyone could find you without the help of a Cherokee scout. I've closed loans for my cable guy, people that work out at my gym, employees at my gym, teachers at the schools where my mom and my sister teach, waiters and waitresses, bar tenders, gas station attendants, the lady that works in the deli around the corner at the grocery store where I shop, the golf pro where I (used to) play golf, the guy that owns the dry cleaners where I have my dress clothes dry cleaned, people I've met in the airport....and on and on and on. You get the point right? Bottom line is business cards are cheap so your rate of return can be very, very low and you're still making out to an incredible upside compared to the cash you drop on other marketing. Close one client because of this strategy and you've literally covered 10 years worth of business card expense. Every one closed on top of that is just gravy!

Let's get the buyers on the fence off, learn this market for what it is, and impress your clients that you know that much more than your competitors, even if you just sound like you know what you're talking about enough to dish them off to me. You've helped their fear and anxiety because they "know they're in good hands, you're much more on point than that other realtor" they've talked to. So use this market as a chance to be a teacher, but more importantly to be a student. Learn it, understand it, appreciate it, and file it away in your box of expert knowledge in your direct market and your industry as a whole. It'll pay dividends moving forward, I assure you.

Give me a call and let's move property, its' more fun doing that than it is sitting around worrying about what's going to happen. We all make our own success and now is the time to succeed because you can distance yourself from the competition, they're frozen with fear so go close their clients.

I can't believe I've slipped out of the habit of getting a post up here at least 3 times a week, if not more. I'm sure everyone has been alright without my boring, technical, analysis of what's going on. But, needless to say the last 2 weeks haven't been very quiet, that's for sure.

We've had two Fed Rate cuts....of course that didn't push our mortgage rates down. The last three days on the other hand did. A bond rally started on Tuesday and gained even more yesterday. Today saw some early profit taking and we actually got down to a low of -53bp around 10am. However, the Stock market got popped in the jaw again today, the Dow lost 443 points to close at 8,695, the broader S&P shed 47 points to finish trading at 904 and the NASDAQ Composite tumbled 72 points to close at 1,608. Some of that money that was leaving the stock market by the bucket load did find it's way into bonds and we clawed back to close the day with our 6% FNMA Benchmark MBS sitting at $101.62, down 3bp on the day. (A lot the recovery was due to The Bank of England, European Central Bank, The Swiss National Bank, The Czech Republic's central bank, ALL dished out a rate cut today. That gives some short term strength to the dollar and pushes oil prices down. Oil is traded in dollars so weaker dollar = higher oil prices. A stronger dollar and lower oil prices help ease inflation fears.) Most of that money leaving the equity markets stayed on the sidelines while we await tomorrows torrent of economic news. Tomorrow morning we'll get the Jobs Report. The number has a very low bar set for it so even a lousy report could push rates up a little as money may flow into stocks because it "wasn't as bad as it was supposed to be." However, on the heels of that we should get downward revisions for the past several months and I believe that will be the heavier side of the scale when it's all said and down. That should help substantially with mortgage rates if that can happen.

On top of all that, those of you that read my blog, know that I have been calling for a "mini-refi boom" with a free fall in long term lending rates. It hasn't happened yet but we could see that start tomorrow and/or early next week. Here is why; 2 day rally that picked up substantial demand for mortgage backed securities. Today's pull back fell short and a late day rally brought us back in line with where we closed yesterday as we bounced hard off the 200 day moving average, a very key line of support. So it showed it can hold up for now. If we dip tomorrow early, that will prove important. In spite of the recent rocket in MBS prices, 191bp to be exact, mortgage bonds are still cheaper now than they were before Fannie Mae and Freddie Mac were put into a government conservatorship. SO? I'll tell you why it's important, because that status change of FNMA and FRMC, as I have been saying, in essence pushed those two into the same category as Treasury Bonds. They are guaranteed by the Federal Government and therefore are much less risky. However, they have a MUCH higher yield than treasury bonds do. That said, they should be the hiding place of investor dollars when the stock market tumbles but that hasn't happened. The 10 Treasury Bond is seeing substantially higher demand in spite of it's low yield and MBS have to catch up. That said, we could very well get that rolling tomorrow and the result of that will be lower home prices + ridiculously low interest rates which of course means a PERFECT EXCUSE for you to call your clients on the fence and tell them how foolish it would be not to take advantage of the incredible investment opportunity in front of them. The key to investing is buy low, sell high right? Well lower prices coupled with cheaper money is the "lowest" you can buy. It's the perfect time to get into a new home, especially for the first time buyers that can take advantage of the $7,500 tax credit, that only makes it that much more attractive!! What a nice Christmas present for us all before Thanksgiving even rolls around. So in this traditionally slower time for real estate transactions, we can pick it up a bit these last 7 and half weeks and close out 2008 strong and have a little momentum to carry us into January.

No better time than the present. Call me if you need someone as a sounding board or if you're in need of someone to team up with since so many in the mortgage industry are not there anymore. Lets get together and put a solid plan in place to take full advantage of the situation. Remember, if everyone else is sitting in the corner with their head down sucking their thumb, that means there are buyers and sellers out there that are not getting serviced properly and it's your job to make sure someone picks up the slack.

I'll be better about getting my blog updated moving forward, there is too much going on not to. Check back tomorrow around mid day for an update on the jobs report and whether or not we're getting the reaction that I'm calling for.

Take care!

Considering the volatility and uncertainty we're up against and considering the doom and gloom that's unavoidable if you "have television" or "see newspapers" or "leave your home on occasion", let's look back to President Calvin Coolidge. Closed Mouth Cal has some of the greatest quotes in history if you're into that sort of thing obviously. Personally, I draw a lot from reading what people much smarter than me have said. I know it's cliche or sort of "rah rah" type stuff that most people don't put a lot of stock in, but at times certain quotes do hit the mark. This, in my opinion, is one of those quotes and has been a source of inspiration for me personally for a long time. Just thought I would share for those of you that haven't heard this one.

"Nothing in the world can take the place of persistence. Talent will not; nothing in the world is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

-President Calvin Coolidge

I'll be getting back in the habit of market updates soon. Hopefully tomorrow will be a little less hectic than the last week has been. It's a good thing, but with 66% of lenders folding up shop and exiting the industry and even half those left don't know what they are doing, those of us with the persistence to power through this have the pleasure of making sure your loans close and advise your clients on how to properly and beneficially finance the largest investment of their life. Take care, I'm going to get my usual 2 hours of sleep so I can close out the week strong.

Been awhile since I got a new post up here, crazy week of work can do that to you. Volatile is becoming an overused term anymore but I swear that's being redefined every week. This week was no exception. The Dow has been on wicked roller coaster and closed the weekend down, after trading in a 567point range, losing 127points on the day to close at 8,852 while the S&P shed 5 points to close at 940. The NASDAQ also finished 6 points on the red side of the line to close at 1,711. Switching focus this week on the Mortgage side of things, we're now going to focus on the FNMA 6% bond as our best indicator of where rates are headed. After a big jump early yesterday on the heels of worse than expected Consumer Sentiment (shocking, people aren't "positive" about things right now....) as well a dismal reading on housing starts for September falling 6% or a level of 817,000 which was worse than expected and a 17 year low. Building permits also were worse than expected, actually much worse with an 8% drop to 786,000 compared to the estimates by most economist to be around 840,000. This is a 27 year low. But there is good in the worst of news right? That means that inventories should start working themselves out and thus decreasing supply. Couple this with incentive for first time home buyers in the $7,500 tax credit and historically low interest rates and hopefully we'll see home prices rise as demand increases and supply decreases. So go sell houses!

Credit Market Monitoring-

The best way to monitor or at least the most popular way to monitor the credit pipes is via the LIBOR/OS spread. That is the spread between the dollar LIBOR and the overnight index swap rates and can give you a view of the willingness of banks to lend to each other. The higher the spread, the less likely banks are to lend to one another. Before we were hit with this credit freeze in August of 2007, the average LIBOR/OS Spread was 11 bp. This week, as the pipes thawed a little bit, that spread eased from 341bp down to 331bp. Not knowing anything about what those numbers mean, if you know that "higher" is worse, and you know the difference in "11 < 331" then you can at least grasp the magnitude. Especially when "331 is lower than the week before." In order for this mess to get cleaned up, that spread is going to have to come much, much further.

Now it's your turn.

Give me some ideas on what you want to hear from me. Let me know if there are particulars in reference to financing ideas, overall market questions, advice and tips, etc., what am I doing here that you like and what am I doing here that you find to be a waste of your time to read? Let me know what I can do to help you be better at what you do.

We have to come to an understanding, "the general we, the collective we" so to speak, that working together, helping each other, educating each other, providing assistance for each other and just being a solid resource for each other is the only way anyone in our industry is going to come out on the other side in position A. Those that chose the route of going it alone will find themselves in either a bad spot or another industry. That I can assure you.

Have a successful weekend and I will try to get more than just one post up next week. I want your ideas though so my post are maximizing both my effort to write it and your effort to read it. Take care!

2/3rd of the people writing mortgages a year ago are now doing something else. 66% of the industry is gone. I would guess that the same will be true for Realtors, appraisers, closing attorney's, etc., not to mention builders, in about 6 months, maybe less, thanks to the little 'lag window' in the financial and the 'boots on the ground' and/or the end user. The last figure I saw for Realtors in South Carolina (an area that has not been hit anywhere near the extent of other markets) was that the registered and licensed Realtors on the SC MLS was somewhere around 40% less than it was a year ago. The first wave of "flight minded" left obviously, and then a few that were financially unable to continue hung it up. After the last 26% close those last few deals and decide to cash it in or clean up their listings, etc., we'll be back in line. So for those still in the industry, roughly 1 out of 4 current agents will be "doing something else" next Spring. (Pssst....that's really good news for some of you.)

For those that are going to survive and fight the way that you have been lately, the way that I have been lately, and the way so many others in various parts of the country have been lately, this is for you. Not the ones quiting or cashing in with the "it's been a good run, on to the next gig" mentality. Next Spring, when they are all gone, the home buying season will start kicking into gear. It will be, hopefully, back a little stronger than usual to with a wave of first time buyers getting in under the deadline for the tax credit so go ahead and get yourself ready for that. (I have some great ideas on how to hit that market too by the way, call or email and we'll discuss those. It may be a topic for another post but it's really good and I'm sure my competition reads these now and then...we'll see.) But I digress.....

On top of the increase in buyers as a result of that outside influence, you're going to have basically 2/3rd fewer agents than you had last Spring that will be able to service that huge influx of buyers into the market. That just means, hopefully anyway, that those of you still in it, will actually see your numbers sky rocket. Of course you need to prepare yourself for it so that it's not overwhelming but we can discuss that later. For now I am going to share ssomething that I heard a couple years ago. I can't take credit for it and I honestly don't remember who he said the original author was, but I went to hear Steve Spurrier speak at a dinner. I took away something from that night and I actually typed it out and printed it and it's hanging on my wall. I found this very relevant to our situation and I hope you enjoy it as well.

There are 9 traits that highly successful people have in common. I'm not going to go into detail on these as they are pretty self explanatory.

1) Positive attitude

2) Sense of personal responsibility

3) A willingness to take creative risk.

4) Ability and willingness to handle adversity.

5) Ability to transcend any previous accomplishments. (I think this is one of the big ones)

6) A true love of competition. The game itself is just as good as the potential reward for playing and winning.

7) Persistence

8) Courage

9) Proper preparation.

Hope that helps. I know that, if nothing else, it helps me keep things in perspective and can flip me from being completely down to energized and rejuvenated at times so when things get a little rough or a little tight maybe it can help you as well.

More of a market update tomorrow, hopefully some good news right!!