Enjoy the extra hour of sleep. Have a great weekend.
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The news was greeted positively by stocks. This morning, however, is a different story. The Dow is down roughly 200 points, while the Nasdaq has been down more than 35.
Mortgage bonds have responded in just the opposite manner. Prior to the release of the news, there was a small rally, but then mortgage bonds experienced a sell-off on the news which caused them to close the day down 33 basis points. This morning, they have recovered half of yesterdays' losses, which translates into a 1/8 - 1/4 point (not percent) increase from lenders.
On purchase transactions, points are paid out of pocket at the time of settlement. On a $100,000 mortgage, one point is equal to 1.0% of the loan amount, or $1,000. A 1/4 point is then equal to $250. If you spread that over 30 years or 360 months, it would cost $0.69 per month.
As you can see, the Fed's action was basically a non-event for mortgage rates. Have a great Thursday.
[ add comment ] | permalink | ( 3 / 1099 )
At 2pm, they also release their policy statement, which is a glimpse into what we may expect from them in the near future.
Cross your fingers and hope for a double dose of good news.
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They have drawn down all of their lines of credit, which totalled about $11 billion and then they received an infusion of cash from Bank of America in the amount of roughly 2 billion.
In light of all of this bad news, Countrywide did say they expect to show a profit in the fourth quarter, due to a reduction in labor costs, among other things. If they are able to go from such a huge loss back to profitability in a quarter, I think it bodes well for the mortgage industry and the housing market. I guess we'll see.
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Buffet is respected by many as the best investor in the world. He recently made a very large investment in China and believes that the United States needs to maintain a strong give and take with China when it comes to trade. He also said that North Korea would be the one country in which he did not have any interest.
To me, the most uplifting thing Buffet said was that he believes our children will live better lives than we have lived and that our grand-children will live better lives than our children.
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