Financial Update by Maurice Soussé

The weekend is upon us…let the fun begin. Interest rates are down a touch this week as the 10 year treasury dropped back down to 2.6% after last Fridays surge. This helped ease the long term fixed rates just a touch. The company UPS lowered earnings estimates this week as they cited a potential slowdown in their business due to a lagging economy. So, which is it? Is the economy getting better or are giant companies who can gauge their business activities correct when they say the economy is slowing down?

The reason our rates rose is because the bond markets are “anticipating” the economy to improve and assumes the FED will taper their bond buying program. Chairman Bernanke never stated that they will be slowing down bond buying, but only said they will be watching and at some point will be able to slow down purchases. Was the market over reacting to his comments? Most large bond traders believe the market had a knee jerk reaction to the comments and that rates will settle back down about a .25 to .5%.

If you have a jumbo buyer right now, please have them look at our 10/1 ARM. The average loan is held about 7 years which is why the 10 year is such a great product. It offers stability and safety while offering a rate that is traditionally a full percent less than a jumbo 30 year fixed rate. Great stuff.

Our quote this week rings true to me. Mother Teresa said “Kind words can be short and easy to speak, but their echoes are truly endless”. Go out of your way to be really nice to someone today. See what kind of smile you put on their face. It will make you feel great.