The People Have Spoken

Senator Barack Obama? . . . . . OR . . . . . Senator John McCain?

Survey Says: President-elect Barack Obama.

That was the choice that the electorate took up yesterday. There are some who are happy this morning and some who are not. We must all remember that we are Americans FIRST, party affiliates second. For me, I stood in line, cast my vote and brought my kids to introduce them to the process of electing the leaders of our nation. I will keep my vote to myself. No matter who the victor was to be going into last night, I will tell you that my only concern and hope would be that the victor would have the ability to bring about better times ahead for all Americans. Now I genuinely hope that we, as a nation, can rise to the challenges ahead of us and look to the greater good within us all.

I think it's pretty safe to say that we are all imperfect and only correct in our beliefs, actions and motivations some of the time. And so, it can be suggested that one of the truest measures of a person is how graciously they accept defeat or victory - essentially all that lies in front of them. The greatest people I have ever looked up to were gracious in their approach to life. Neither allowing themselves to get too high, or too low, over the setting of the moment. Always looking to achieve what can only be described as "more" the next day. I know that is what I strive for.

In my work as a financial coach and mortgage banker, I have the opportunity to "get into it" with many different ideas and people. We ultimately come to find that most people want the same thing - some level of certainty, security and opportunity in their lives. We work on the money part of that. I don't go deep on the political end of the discussion because I don't want to know their business. And, frankly, my position is just that - mine.

As we approach the new era ahead of us - no matter if "your guy" won or lost last night - ask yourself, "Am I gracious about the outcome? Am I going to PERSONALLY do what I can to advance what I think is important for our nation? Will I legitimately do so in a fair and just way with regard to my fellow citizens? Will I (at least) entertain the ideas of those different than me? Will I remain open to new thought? Will I embrace change - the only true constant in life?" Only then, after considering these questions, can you really take your position with confidence each day.

So, now the election is over. There is much work to do for our country, our economy, our men & women bravely serving in uniform, our friends around the world. It's time to stop bitching and start doing. So, let's roll up our collective sleeves and have at it.

It's good to be an American today (and every day!).

Strange Days Indeed....Most Peculiar, Mama! (John Lennon)

Wow, we are in a wicked, wild and weird time!!!!!!

We're in a very strange time, folks. It's almost comical to hear what we're hearing on the radio, in the papers and on the TV. Seriously. Something to think about - The Fed is attempting to be savvy and creative in its ways to help the financial system get back on track. However, there is simply no one who can draw upon past experience to find answers here. We are in uncharted territory due to the complexity of the financial instruments that are unravelling. Not trying to scare anyone - just telling the truth (what an idea?!)

This situation is historic...and we are living through it. It is almost comical to hear the utter stupidity that comes out of the mouths of some of the politicians who are paraded in front of the cameras...I can't help but think that we actually elected these people. There is a lot of panic out there. People are very worried about their life savings. Is money in the bank safe? How about if it is in a life insurance policy? How about in bonds? Unfortunately the answer is no, no, no.

Yesterday, the panic reached a level that caused such a demand on US Treasury instruments, that the total return of some short-term paper went negative. That's right...the premium paid was higher than the return provided by the yield. So keeping your cash under the mattress is better than an investment in some Treasuries, and apparently safer than the financial market!!!

Suddenly, guess what may become the most attractive way to protect your money? Think about it...you can touch it, get a tax break, live in it too. Yes, Real Estate is starting to look pretty good, especially since it has become more reasonably priced.

The Fed has come to the rescue lately, but all these "bailouts" and programs to help faltering companies is hard to sustain. They can't save everybody because money will run out. As mentioned previously, the Fed has been very creative. But eventually, the money and creativity could run out. And the Fed may need to actually print money - this would be highly inflationary....very bad stuff. Let's hope it doesn't get to this, as that would be very bad for rates...which, of course, I (and so should you) care deeply about. We sure are living in interesting times!!!


In this morning's economic news, weekly Initial Jobless Claims increased by 10,000 to 455,000 claims, meeting expectations, as workers were displaced by Hurricane Gustav in Louisiana. The four week moving average of continuing claims rose by 29,750 to 3.46 million to remain near a five year high. All in all, this report suggests continued weakness in the labor market.

In a bid to ease the credit crunch and restore a sense of calm in the financial markets, the Federal Reserve authorized a $180 billion expansion of its swap lines with other world central banks. The funds, which will be provided by the Federal Reserve, can be injected into money markets through overnight and term loans. Stocks are liking this news so far and this is pressuring Bonds.

Leading Economic Indicators were reported at -0.5%, in line with expectations. Philadelphia Fed Index was up 3.8, far better than expectations of -10. Stocks strengthened momentarily on the surprisingly good Philly Fed number.

Mortgage Bond prices are trading sideways in a volatile 100bp range, with overhead resistance at $101.47 and support below at $100.50. Most clients can continue to float, but VERY carefully during these wild times.

I will keep you posted!

Rich Hayden
Mortgage Banker
703.926.4646 - p