James Bowen

Ok, so the Senate decided they would take the lead and the BAILOUT but with some modifications and the market is still tanking. Why? It appears that results from credit tightening and bank cash hoarding are really showing up in major ways. The Commerce department's factory manufacturing report is out and orders fell by a whopping 1.5% more than expected and the most in 2 years. Other compelling evidence supporting the current credit strained market is the new unemployment report put out by the labor department. Apparently, unemployment is the highest since 9/11/01! This is trickling down to consumer spending which hits consumer confidence , etc. etc.

Treasuries are showing the expected strength in buying, however that kills the yield and shows again that investors are willing to make less if it is more secure. rates have shown a VERY SLIGHT IMPROVEMENT but not currently in line with the yield drop, so that again shows that Banks aren't willing to give up their minimal yield with current short term lending pricing where it's at.

So, now the next question is, Will the House go along with the Senate? Being that this is a BLOG, let's get some chat and opinion flowing here. Will the House pass the revised Bill and what are your pro's and con's regarding it?

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION.

I'm not going to restate the obvious. Markets regained much of what was lost in yesterday's HUGE sell off. BUT, the real news today focuses on Bank to Bank lending rates based on LIBOR. Banks aren't following suit with the fickle stock investors who once again jumped on board in hopes of a Congressional fix soon. Longer term lending between financial institutions is virtually non existent. Companies with great credit ratings are unable to fund their capital needs, as lending has now been limited to an overnight function as banks won't take any chances with longer term financing deals. Consequently, the overnight LIBOR jumped to almost 4 points above FED bank to bank lending rates, and longer term LIBOR is 2 points above FED rates. ALL Treasuries gave up they gained yesterday. The 10 year note fell over 2 points and Yield jumped right back to where it was before the BIG BUST. This is extremely troubling for those homeowners who are stuck with ADJUSTABLE RATE MORTGAGES (ARMS) as these are tied to LIBOR not prime.

Folks, if you have ANY OPPORTUNITY to get out of your ARM, NOW IS THE TIME. This mess isn't going to be cleaned up anytime soon, so you can bet that BANK lending will get stingier in the days and weeks to come.

Let me help you BREAK YOUR ARM. (in the figurative sense of course)

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION.

Are you kidding me!!!!! A 777 pt loss to the DOW in one day!!!!I thought triple 7's were supposed to be lucky!! So, let's put a figure to that loss today. How about 1.1 TRILLION DOLLARS. WHAT WAS WORSE, THE BILL PASSING OR THIS LOSS? Does anyone think politics had anything to do with the HOUSE not passing this bill? News reports suggest that an almost equal number of DEMOCRATS voted for the bill as REPUBLICANS voted against it. Is this the last big REPUBLICAN revolt against the parties COMMANDER IN CHIEF? Supposedly Nancy Pelossi had some "unkind " words to say about George W and his entourage and that apparently ticked off some REPUBLICANS who were going to vote yes. So, basically they said " NA,NA,NA,NA,NA" and voted NO pretty much just to spite her. And another REPUBLICAN Rep was quoted as calling the bill " a big cowpie with a marshmallow in the center ". WOW...these are our elected officials talking about the future of the American Financial system....what a way with words they have, don't they?

Other market "sad stories" today included the end of Wachovia as CITI gobbled them up. There are over 110 BANKS now on the FED "troubled list". Any more bad news could easily cause a bank run on any one of them which would be irreversible. But, don't worry, one of the BIG 3 will surely snatch them up!! Oh, and consumer spending was down again for the umpteenth month in a row.

BUT... Oil is now back under $100/bl mostly because folks are staying home and not spending what they don't have (or just lost). I heat with oil and have already told my wife and kids that I don't plan on setting the thermostat over 60 degrees this winter so they better get used to wearing the leg warmers and the parkas.

As is generally the case with market downswings, TREASURIES got a HUGE boost today as investors would rather make a pittance than lose their shirts. TNOTE yield dropped by over .20 today closing at 3.58% , down from the morning open of 3.81%. So, it was a GREAT day for rates as I saw an improvement of at least .25 of a discount point. But, really , if people keep losing their downpayments and reserve capacity (or just there confidence to make a move) to these market swings, rates won't matter if folks can't qualify. Kind of a catch 22 isn't it??

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONAL BANK.ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

After a modest gain to the market yesterday based on the "rumors" that Congress had reached "an agreement in principle" on the BAILOUT plan, today reveals that the plan has again reached an impasse as not all share the president's plea to "rise to the occasion and pass the Bill". While there are many points still in discussion, investors cautiously await some finality on this issue. It may not come today, but all the major players think something will be done by Monday. This sentiment was compounded by the NATIONS LARGEST EVER BANK FAILURE. We all expected Washington Mutual to the next victim of bad mortgage lending decisions, and it was seized by the FDIC last night and it's assets sold to JP Morgan Chase. Once again Chase has "come to the rescue". You remember that JP Morgan also purchased the assets of Bear Stearns after it was taken over the FED. Chase has now regained it's position as the number 2 bank in the US based on assets. Yes, we did see it coming, but most had expected a different player such as Wells Fargo to be the acquirer. Questions are now resurfacing as to the health of 2 other major mortgage players......National City and Wachovia. Both have already written off billions and are looking to bolster their loss provisions for the 3rd quarter. Are they next?

After yesterday's 10 year TNOTE yield run up to 3.87%, yield is now fluctuating near the 3.80% which should aid mortgage rates, bringing them down to the range prior to yesterdays trade activity. Bonds are again enjoying increased activity as the market struggles to get some decision on the bailout.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONAL BANK.ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

There was a better tone to the market today. It was really quiet following the past 2 days sell off, ending with a slight loss after wide hourly swings throughout the day. This reflects investors attitude toward the still questionable bailout proposal. Both Paulson and Bernanke appeared on the Hill today answering more questions suggestioning that this plan doesn't have the support predicted. I understand from an article I read that Democrats are looking to cut the plan way back. Whatever happens, it needs to happen now. The NAR reported a bigger than expected drop in existing home sales. Again.

Pricing changed several times today mirroring the TNOTE yield as it fluctuated up and down before finally settling virtually unchanged from yesterday. (maybe a bit less than 1/8 PT increase to pricing)

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION