Pine Cone Lodge speaks Lake Tahoe from every nook, cranny and panoramic view. The lodge itself stands as the epitome of a luxurious Tahoe log Cabin, yet with the property’s additional guest house, two buoy’s and expansive shoreline the custom “Old Tahoe” interior design and spacious deck, you’ll fall in love with this Tahoe hideaway as your vacation estate. Uniquely designed to embrace summer or winter, the Pine Cone Lodge is a lakefront property which breathes a lifestyle of natural gentility.
Current 30 year fixed mortgage rates (best rate, up to $417,000 (excellent credit)) are 5.0% with one point.
It seems as if the economy, not wanting us to get over-confident, rubs our noses in some bad news every now and again. This time it was the employment data, released last Thursday, and it was rather shockingly bad.
Still, the most reliable economists I read are sticking to their view that we’re climbing out of the recession. It’s a slow, difficult process with few moments of lasting elation, but it is, nonetheless, a recovery that is forming on the horizon.
So–it isn’t exactly time for major celebration. Maybe not even for minor celebration, though it is clearly time to take a deep breath and get to work. The business, increasingly, will be there for those who have paved the way with effective marketing programs.
July 8, 2009
KEY INDICATORS
Gold $923.60/ounce [down]
Crude Oil(Brent) $62.99/brl [down]
U.S. Dollar to…
Euro .7167 [up]
Japanese Yen 95.04 [down]
6-mo Treasury Bill Yield 0.27%
10-yr Treasury Note Yield 3.49%
[6-mo down 8 bps, 10-yr down 1 bp]
11th Dist Cost of Funds:1.832%[+]
30-yr Fixed-rate Mortgage 5.68%
15-yr Fixed-rate Mortgage 5.14%
1-yr ARM 4.91%
[HSH averages rates: 30-yr
down 11 bps,15-yr down 15 bps; 1-yr ARM up 7 bps]
Mortgage Bankers Association Mortgage Applications Index
week ending 6/26
Overall
444.8 (down 18.9%; up 6.6%
the week prior)
Purchase Money Loans
267.7 (down 4.5%; up 7.3% the week prior)
Refinancing Loans
1482.2 (down 30%; up 5.9%
the week prior)
Jobless Claims 6/27
614,000 – prior week 627,000 (as predicted) – continuing claims down to 6.702 million
Employment Report June
Payroll jobs down 467,000 (as against 335,000 last month) and unemployment rate up to 9.5%
Construction Spending May
Down 0.9% month-over-month, down 11.6% year-over-year
Weekly Commentary
Thumbnail Sketch: A great deal of optimism about an imminent recovery faded with the negative report on June employment. The jump from 335,000 jobs lost in May to 467,000 lost in June immediately sliced away the confidence that had been written into prices—of oil…of Treasury securities.
On Monday, the price of a barrel of light, sweet crude fell 4%, taking with it the assumption that oil prices would continue to rise relentlessly in the coming months. But, of course, the point here is that the belief that the overall economy (and therefore the world demand for oil) would rise reliably for the next several months had equally fallen away.
What did that do to rates? Investors lost their new-found taste for risk and turned to Treasuries as a safe harbor, driving the shortest-term rates lower but driving longer-term Treasury security rates somewhat higher. Still, mortgage rates actually declined slightly in the face of this uproar, putting the lie once again to the mistaken assumption that markets always act rationally.
Also relatively irrational was the decline in the number of applications for mortgages in the week ending June 26. We’vereached a record low for this cycle, with refi applications dizzyingly volatile. They are now 85% off their peak. Purchase money loans are behaving perhaps less emotionally, rising gradually in the face of refi volatility, but they remain at a low level.
Indicative of how we’ve all been reacting to economic news is the shine that analysts have buffed up on the ISM manufacturing and non-manufacturing index, which rose 2 and 3 points respectively in the past month. Note, though, how these indexes work. They are based on surveys—in the one case, of manufacturing order managers; in the second, of order-takers for service industries. Anything over 50, therefore—indicating that over 50% of the survey responses were positive—suggests a growing market for manufactured goods and/or for services. Anything below 50% suggests that a contraction is underway.
The latest ISM reading for manufacturing rose to 44.8; the latest services reading rose to 47. Now, 47 is a nine-month high, and three points is a healthy rise. Neither of these facts erases the reality that the index is still indicating contraction, though.
But that’s where we are right now. We haven’t broken out of the dark forest, but the light—despite employment data—seems close.
