Phil Grossfield's Blog

A LITTLE EXTRA…

Bad News Worse News Hopeful News Spin News

distinguish_yourselfDistinguish Yourself.  In order to succeed in this business and in this market, you must find a way to distinguish yourself from other LOs. That is, if you are going to get more reliable referral sources, you must be able to clearly convey several compelling reasons why they should use you….

I am setting up presentations on (1) How to Be Successful In The Future Market, (2) Where to Look For Additional Referral Sources, and (3) How To Distinguish Yourself From Other LOs.  Let me know if you’re interested in a presentation….

 

My Market Watch:  Bad News Worse News Hopeful News Spin News.  Bonds Ugly – Rates Worse.

The Bad News is the 30-year bond was down over -100bps before you woke up this morning. This of course is follow through from the Fed meeting last week and specifically Bernanke’s statements that they will continue to taper the buying of bonds in 2013 and intend to end QE in mid-2014. For an explanation, read my post on Quantitative Easing.

freddiekruegerThe Worse News is the next floor of support is so far down it’s like Freddie Krueger decided to get involved in the bond market. I’ve typed about floors many times…floors are what traders look to for guidance/insight into when the bond might stop falling. Think of an elevator with no buttons and it’s going down from the top floor…you have no idea when it’s going to stop but you know that as it approaches each floor there’s at least a  chance it will slow down, stop and the doors will open. Well, right now, the elevator is heading down and the next floor is nowhere in sight…it might be a long ways down before it stops and the doors open…a long ways…a Freddie Krueger ways….

The Hopeful News is bond prices are only worse by -77bps now so we’ve gotten back some of the losses this morning. More importantly, the 10-year note, which I normally do not follow, is holding strong. First, you should know the 10-year note has increased more in the last 2 months than in the last 50 years…yeah, I know!  However, according to Barry Habib from MBS Highway, the 10-year is holding strong at an important level and if it holds its ground, it might be enough to get traders to reverse their strategy and start buying bonds a gain. It aint much, but its something to give us hope.

The Spin News is that rates are still very strong if you consider where they might be headed. Yes, leave it to me to try and spin this in a positive way, but it happens to be true. You can confidently tell your potential clients that based on your interpretation of the markets and the trend in bonds over the last 2 years, and specifically over the last 2 months, there is evidence to suggest rates could get even worse, much worse. So, get them locked in. Use your knowledge about trends in the market to get them locked in and there application submitted.

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