12 November 2010 – Since this week was much like the last few, I figured that would spice things up with a musical interlude. Because I cannot sing well enough to do this justice, I would ask that you use some good imagination.

Hooked on Some Easing
(Sung to Hooked on a Feeling)

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Ouga, chaka, ouga, ouga
Ouga, chaka, ouga, ouga

Couldn’t fight the feeling,
Rates were on the rise,
Fannie and Freddie pricing,
Jumped before my eyes,
Then the Fed Bank made their plans concrete,
By telling us the schedule that they plan to meet

I’m hooked on some Easing,
I’m high on believing,
That the rates will drop,
Rates slid right back downward,
As bargain hunters go,
To buy T-bills ‘fore the Fed does,
So they could make some dough

There was some other data,
But that don’t mean too much,
Rates will still be driven,
By that dreamy Fed Bank crutch.

I’mmm hooked on some Easing,
I’m high on believing,
That the rates will drop,
All the good rates seem to stick around,
Keep it up Fed, cause it turns me on

Ahaha I’m hooked on some Easing,
I’m high on believing,
That the rates will drop.

I’m hooked on a some Easing,
I’m high on believing,
That the rates will drop.

I say I’m hooked on some Easing,
And I’m high on believing,
That the rates will drop.
I’m hooked on some Easing

In all seriousness, there was a tick up in rates, but they did recede by Wednesday. There was some relevant economic data in the form of better than expected foreclosure and employment numbers, but, as with all statistics, it is the story behind the numbers that count. The startling 9% drop in foreclosures was not driven by economic factors, but rather due to a recent moratorium predicated by robo-signing issues. Employment was unarguably good and is showing an upward trend, but with unemployment still in excess of 9%, nobody is popping Champagne bottles.

I am recommending that my clients closing in 7 days or less LOCK. For those closing in 7 to 15 days, I would suggest FLOATING with a finger on the trigger to LOCK on any improvements. For those more than 15 days out, FLOATING can still pay dividends.