Financial Update by Maurice Soussé

The yield on the 10 year Treasury bill dropped to an all time low of 1.99% this week as investors fled to safety in a massive stock sell off. Interest rates dropped down by an .125% immediately at 9 am PST on Wednesday. Now, the fun part…the bond market moved and rates went up by a .25% at 10:15 am. This type of volatility is very common in this unstable stock market. Investors go to stocks and the minute a sell off occurs, the flight to government T-Bills starts.

In the last 10 business days, our rates have gone up and down by over a .5%. This is very uncommon as rates will usually trade at an .125% per day and often times stay at the same rate for several days at a time.

In this new information age, computers are buying and selling stock at certain trigger points. This causes huge swings in the DOW pushing people in and out of bonds forcing the mortgage rates to move quickly. It is important if clients are “shopping” rates to make sure they are comparing programs within 30 minutes between companies during this volatile time.

When you look at our rate sheet today, it is not a typo on the jumbo fixed rate 5/1 ARM. We are at 2.875% today. Incredible.

The quote of the week is appropriate in this sliding stock market. Socrates says “He is richest who is content with the least, for content is the wealth of nature”.