Phil Grossfield's Blog

I highly recommend you do this with your spouse, particularly if you have young ones…as you know I took the day off Friday to spend with my wife. We hired a babysitter to watch the kids all weekend, got a hotel, and relaxed…it was an escape and a needed one for everyone in the family dynamic. I think it’s healthy to miss your kids after a couple of days, and vice-versa. On Friday afternoon my wife and I went kayaking in La Jolla Shores…it exceeded my expectations. We got up close and personal with sea lions and went into a cave…it was blanking awesome. One thing I really thought was cool was looking into shore and seeing the landscape…did you know the shores are deteriorating at a rate of 8-11 inches per year? That’s pretty fast don’t you think?! This is why shoreline homeowners cannot get insurance on their $10m homes. Also, if you look at the picture I included above you’ll notice the lines in the rock-face are slanted downward. This formation is due to the tectonic plates colliding with each other directly below the shores…one plate is being forced downward under the other and this is clearly illustrated by the lines in the rock face. Since I didn’t bring a camera on the kayak, I found this picture on the web to illustrate what I saw…you can click the picture for a closer look…pretty cool, eh?

My Market Watch:  Pricing is better than Friday by 0.125 or so depending on the coupon. Since rates were published trading has been flat, only down -3bps which is nothing really. The bond market was stoked on inflation news this morning…the reporting indicates that inflation is under control. Since bonds hate inflation this was good news.  The end of this week has some big reports coming out…more on that later….

My Schedule:  I’m available all day. Please note, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Walk With Me For A Cure for Cystic Fibrosis. Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37…let’s change that! Click here to donate or join me and walk with my family on May 19th…email me for details. Every penny helps find a cure. THANKS!

I’m Off The Grid Tomorrow.  I am taking the day off to spend with my wife. No kids, no dogs, no cats, no work. I will have contact information of those covering for me available tomorrow.

American Idol. I’ve decided to leave the mortgage industry and become a professional American Idol critic.  This way I can legitimately analyze the performances and live in a van down by the river.  Last night Amber was the best, then Candace, Angie, and Kree in that order. I’ve had Amber running first for weeks now…she is peaking at the right time and just keeps getting better and better. Although Candace is awesome, I feel she peaked a few weeks ago when she blew everyone away…now despite incredible performances, she just isn’t  measuring up to that one day when she sang on April 11. Angie is great and is my brother’s favorite…she has a different thing going on since she writes her own music and plays the piano…and she is a great singer. But if you’re comparing the purity of her voice to Candace and Amber and even Kree, she comes in 4th. Nonetheless, because Kree missed the mark last night, Angie moved into third place as far as I’m concerned.

My Market Watch:  Pricing is the same since Friday…our pricing hasn’t moved. Again, with rates/pricing stagnant it makes me uneasy, like something is about to pop. And as I asked yesterday the question is which way does the balloon fly? The economic reports have not been strong but what confuses me is the relative non-response by traders to invest more in bonds. Again, trying to get a handle on the direction of the market can be similar to trying to work out all the time travel for the Terminator…it hurts my head. Any thoughts?
My Schedule:  I have a conference call this morning at 10a and otherwise available. Please note, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Walk With Me For A Cure for Cystic Fibrosis. Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37…let’s change that! Click here to donate or join me and walk with my family on May 19th…email me for details. Every penny helps find a cure. THANKS!

Monotony – need a break? Do you ever feel like you’re spinning your wheels? Me too! I mean really, its such a grind sometimes…and it just never seems to end. Don’t get me wrong, I’m not complaining…I’m very grateful for all I have…I really truly am grateful. But don’t you just want to chill sometimes? Know the feeling? One way I deal with monotony is working out…it helps realign me. Also, my wife being the TravelMama and all provides mini-vacations, you know, like 1 or 2 night getaways or an occasional long weekend. This has been very valuable to our family. And I think that’s where this is going…as I type this morning I can’t help but think about a new vacation, you know, like a complete unplug. Let’s face it, until you’re truly unplugged from email, and texts, and business calls, and computer, and iPads, and dishes, and school lunches, and picking up dog blank, well, its just not a release. So, I am declaring gratitude to the Universe this morning for our planned family vacation in the fall, again courtesy of the TravelMama, to Alaska via Celebrity cruise line. It’s timely…Daddy needs a break! Until then, I declare I have all I need for today. I am full of power, strength, and determination. And I express gratitude to the Universe for all I got, can you feel me?!

My Market Watch: Pricing is the same since Friday…our pricing hasn’t moved. With rates/pricing stagnant it makes me uneasy, like something is about to pop. The question always is which way does the balloon fly? The economic reports as of late have not exactly been super strong…that makes me feel there is more short-term upside for bonds. But what irks me is the relative non-response by traders to invest more in bonds. Trying to get a handle on the direction of the market can be similar to trying to work out all the time travel for the Terminator…it hurts my head. Any thoughts?

My Schedule: I have an appointment this morning at 11a and another tentative appointment late this afternoon. Please note, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Walk With Me For A Cure for Cystic Fibrosis. Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37…let’s change that! Click here to donate or join me and walk with my family on May 19th…email me for details. Every penny helps find a cure. THANKS!

Face-Plant.  My brother-in-law Seth rode his bicycle to work this morning which he does almost every morning. But after a monster late-April snowstorm in Minneapolis he wiped out into a face-plant which he documented via Facebook. Now I know you’re probably thinking he’s a ding-dong for riding his bicycle after a huge snow storm, and you may be right, but he’s no dummy. In fact, he’s a an incredibly smart and talented attorney and author of Minnesota Litigator. What I like about his Facebook picture below is the beautiful trees in the background which is why I decided to post this story…click the photo for a closer look.

My Market Watch:  Pricing is the same as Friday and the same as yesterday. Pricing would be better but the stock market is also liking the report that home prices are on the rise.  This is one of those rare moments when both stocks and bonds do well on the release of an economic report.  But as expected one of the two must give way for the other…in this case bonds are yielding to stocks which continue to perform well.

My Schedule:  I have an appointment this afternoon at 3:00p.  Please note, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Walk With Me For A Cure for Cystic Fibrosis. Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37…let’s change that! Click here to donate or join me and walk with my family on May 19th…email me for details. Every penny helps find a cure. THANKS! 

Inspirational Story:  I’m not sure you saw this on Friday so I’m posting it again…it might be a little sappy but it’s a feel-good story and who doesn’t need that occasionally:  Inspirational Story.  Here’s a funny scene that is absolutely not inspirational from The Family Fued: Name Something You Pass Around.

American Idol. The top 2 singers in American Idol are extraordinary…Candace Glover and Amber Holcomb.  Those two will go on to be mega superstars…no question.  In third place is Kree Harrison…she will bring country back to mainstream…mark my words.  And in 4th place is Angie Miller who is very talented but will need good song writing and great management to be successful.  But the other three, they could sing virtually anything…their voices are pure.  Here are some highlights from last night:

Amber Holcomb in my favorite performance of the night singing Barbara Streisand’s “What Are You Doing The Rest Of Your Life” – arguably a flawless performance.

Candace Glover bravely performs Mariah Carey and Whitney Houston’s “When You Believe”

Angie Miller surprisingly pulls off Beyonce’s “Halo”

Kree Harrison didn’t have a memorable night in my opinion but here is a beautiful performance from last week “Help Me Make It Through The Night“

My Market Watch:  Pricing is the same as Friday. The market is flat and there are no pertinent reports scheduled. I expect a slow day in the markets.

My Schedule:  I have an appointment at 11a this morning in Irvine but should be available all afternoon. Please note, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Cure for Cystic Fibrosis.  Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37. Let’s change that!  Help us to raise money for a cure.  JOIN ME – WALK WITH MY FAMILY ON MAY 19, or, to donate: click here.  THANKS!

How Will She See Herself? I try diligently to teach my 8-year old daughter to overcome societal pressures. I encourage her to be strong and not rely on others…this is why at one point I was dead-set against Disney movies where the poor helpless princess was doomed until the handsome strong prince showed up to save her. I don’t want my daughter to feel she needs to be saved by anyone. I want her to be strong, positive and independent…she’s Grossfield for the love of all things holy in this land! Equally important, and critical to this goal, I want her to have a fabulous self-image.

But the media pressure for a young girl to look a specific way is a behemoth of a challenge to overcome. Although I know my daughter is the most beautiful girl on the planet, her self-confidence shouldn’t be dependent on how attractive other people find her. Women are so critical of the way they look. Even my wife, who is absolutely stunning, will comment from time to time on how she doesn’t feel pretty…I look at her like she’s completely delusional.

Dove started a campaign years ago to reverse the trend on women’s self-image…a trend that only 4% of women around the world consider themselves beautiful…4%!  But I think slowly and steadily our society is getting their message. It doesn’t hurt that the numbers of smart strong women as public figures are increasing and similar social campaigns are emerging to reverse the fiction. The following link is a message to women that they need to stop being so critical of themselves. Dove hired a professional forensic artist to draw women based on self-description and then again by someone else…the difference is telling: Dove Real Beauty Sketches.

My Market Watch:  Pricing is the same as yesterday…Interbank did not take the bait to change its pricing despite positive movement in stocks. This morning we see the stock market giving up its gains and now we’re in a good place as far as bonds are concerned. Bonds are up +25bps already today and up another 12bps since rates were published this morning. This is encouraging news…if the bond continues to do well we could see a mid-day rate change for the better. I advise you refrain from locking to see if a mid-day improvement will come. Of course, if you’re going to play this game, then you need to be watchful of the market for a reverse shift.  But in my opinion we’d have to see a fairly large sell-off in bonds for that to occur and that is not likely. Let me know if you have any comments….

My Schedule:  I am available all day.  Please note, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Cure for Cystic Fibrosis.  Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37. Let’s change that!  JOIN ME – WALK WITH ME ON MAY 19 – help us to raise money for a cure.  JOIN ME – WALK WITH MY FAMILY ON MAY 19, or, to donate:donate here.  THANKS!

What can I say Boston? What can I say other than my heart goes out to the three families of murdered citizens. What can I say other than my prayers for the loss of an 8-year old boy. What can I say other than my wishes for a speedy recovery to the other injured 154 citizens. What can I say other than I pray for the souls of the guilty. What can I say in the face of baseless hatred. What can anyone say?

My Market Watch:  Pricing should be slightly worse this morning…will probably come out -0.125 worse as stocks rebound from yesterday. Short-term locking may be prudent…longer term floating seems practical. The bombings in Boston could negatively affect the stock market…particularly if it is determined to be a terrorist attack which has not been ruled out.

My Schedule:  I have a meeting at 10:30a and will be difficult to reach before 1p, then available the rest of the day. If you recall, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Cure for Cystic Fibrosis.  Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37. Let’s change that!  JOIN ME – WALK WITH ME ON MAY 19 – help us to raise money for a cure.  JOIN ME – WALK WITH MY FAMILY ON MAY 19, or, to donate:donate here.  THANKS!

Cure for Cystic Fibrosis.  Our family is walking again this year to find a cure for CF, a life-limiting illness. We walk for our friends pictured, Ashton (age 11) and Lola (age 7). The average life expectancy of someone with CF is 37. Let’s change that!  JOIN ME – WALK WITH ME ON MAY 19 – help us to raise money for a cure.  JOIN ME – WALK WITH MY FAMILY ON MAY 19, or, to donate:donate here.  THANKS!

Room Addition.  How much would it cost to wall-off a room in my house? We are thinking of turning a downstairs room in our house into an office and need to put up a wall or a wall with doors.  If you have a contractor you trust and who would not cause me to have a heart-attack because of the price, please let me know, thanks.

Pop Clock.  Here’s an interesting website: U.S. and World Population Clock.

My Market Watch:  Pricing is about the same as Friday but we might see a bump in a good way if the stock market continues to flail…gold prices are hurting stocks along with negative economic news out of China. As of now the 30-year Fannie bond is up +9bps on the day. As a general rule, if bonds are selling our pricing improves which usually happens when stocks are not doing well.  That is, there is typically an inverse-relationship between stocks and bonds as traders use the same source of funds to buy and sell both.  So, when they sell stocks they use that money to buy bonds…this holds true most of the time.  But when bonds are being bought, our pricing always improves.

My Schedule:  I have a meeting at 11:15a and otherwise available.  If you recall, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

Self-High-Five!  I got my butt out of bed at 5a and found myself spinning at 5:45a and I’m proud of it.  I even took a picture of the moment to revel in.  My spin instructor said something very compelling this morning as we were cooling down…she said, “take 15 minutes today to be quiet and still and if you’re too busy to take 15 minutes for yourself then be sure to take 30 minutes.”  I took 15 minutes this morning after my workout…in the sauna. I feel very good today even though my wife called to inform me the dog took four big dumps on the upstairs carpet.  Oh well.

My Market Watch:  Pricing is 0.250 better than yesterday presumably because investors are taking gains out of stocks and investing in bonds.  Other than that the market is flat.  As of now the 30-year Fannie bond is up +31bps on the day and level since rates were published this morning….

My Schedule:  I have a meeting at 10:30a and a tentative meeting this afternoon at 3:30p in Carlsbad.  If you recall, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

My Fun Stuff:

– Candace Glover: Don’t Make Me Over

– Candace Glover: Lovesong

– Kree Harrison: Help Me Make It Through The Night

– Passed Out With Tom Hanks

– You gotta laugh!  I watch this almost every day

– All My Fun Stuff

American Idol Update.  Last night was unbelievable for Candace Glover…she brought the house down…she had a moment.  I have no doubt she will go on to become one of the best singers of our time…she’s that good.  She’s in the likes of the greats…Aretha, Stevie, Luther….  If you hate American Idol and even if you hate music in general, I challenge you to deny the talent here:  Candace Glover: Don’t Make Me Over and Candace Glover: Lovesong.  Kree Harrison also sang beautifully:  Kree Harrison: Help Me Make It Through The Night.

2012 Tax Transcripts. For now, unless you need 2012 income to qualify, 2012 transcripts are not required.  However, effective with applications dated on or after May 16, Interbank will require the 2012 tax return transcripts. If a borrower has filed an extension, we will require:

1. Evidence in the file that the extension was filed;
2. A 2012 Tax Transcript showing “No record of return filed;
3. For salaried borrowers a 2011 transcript, a current pay-stub, and 2012 W-2;
4. For self-employed borrowers a 2011 transcript and a P & L for 2012; and
5. For retired borrowers in cases where the borrower is not required to file, transcripts are still required.

If “No Results” feedback is received, provide a copy of the feedback in the file with supporting income documentation.

My Market Watch:  
Pricing is 0.125 better than yesterday but there is concern over the results on the 30-year auction which will be reported around between 10-11a.  The last couple auctions did not go well. Check out the following interpretation of the Fed minutes released…I got this information from Barry Habib’s MBS Highway:

“The labor force participation rate was a bit below its fourth-quarter average.”

English translation:  the participation rate was the lowest in OVER FOUR DECADES !!!
“The rate of long-duration unemployment remained high.”
English translation:  the number of people unemployed for 27-weeks or longer (who have not dropped out of the labor force) is 4.611 million, or MORE than FOUR TIMES the number prior to the 2008-09 crisis (1.132 million, May-2007)…and the number of people not in the labor force has risen by MORE than 11 million, since the beginning of 2008.
“To the extent that asset purchases push down longer-term interest rates, they potentially expose financial markets to a rapid rise in those rates in the future, which could impose significant losses on some investors and intermediaries.”
English translation:  we might not be able to keep the bond market bubble ‘floating’ forever, and when it burst, watch out, it will likely be UGLY.
“A few participants noted that they already viewed the costs as likely outweighing the benefits, and so would like to bring the program to a close relatively soon. A few others saw the risks as increasing fairly quickly with the size of the balance sheet, and judged that the pace of purchases would likely need to be reduced before long.”
English translation:  the Fed’s ‘staying power’ is waning

My Schedule:  I have a meeting at noon and should otherwise be available.  If you recall, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….