Phil Grossfield's Blog


Monthly Archives: September 2013

Ego-less Bravery – Angelina

angelinajolieAngelina – Love It!  It shouldn’t be that amazing…but it is…and I love you for it. I’ve had time to reflect on the decision Angelina Jolie made to have a double mastectomy. In fact, I started writing this post months ago…but never got around to posting it. I do that sometimes…I’ll start writing something and then wait for the right time to stick it in here. But let’s get back to the point, shall we?

As you know, I recently lost a close friend to Cancer. She had a double mastectomy too and it prolonged her life for years before the cancer got into her brain. You can read my last post about it here – O Captain My Captain. So, you can imagine I, like so many of you, have an opinion about such things.

angelinajolie2Here’s what I have to say about breasts…if they can kill you…get rid of them. Who really cares anyway?  Public opinion about beauty is completely messed-up. We teach our kids through advertising that they should look a certain way which is absolutely redonculous (yes, I spelled it wrong on purpose). And then there are the warriors of this imagery such as Angelina Jolie. She is arguably one of the most attractive women in Hollywood…ever. And she chose her health first, for herself and for her family. I love it. What a fantastic message it sends to women and girls. Beauty is internal and mental…it has nothing to do with our outward appearance. What bravery…ego-less bravery. I saw a quote by Joan Rivers…I like it because it comes from a woman that has had more surgery than Elvis ate bacon. She said, “For all these women that are going through this and going, ‘Oh my God, I am not a woman anymore,’ here is one of the most beautiful women in the world saying, ‘This is what I have done, and I am still Angelina Jolie.'” Damn straight Joan! And damn straight Angelina.

My Market Watch. Bonds Up. The The 30-year Fannie Mae bond is trading higher +16bps on the day and has been flat since early this morning.

Syrian Strike?  For my analysis, read Syria Strike Postponed and No Syria Strike?

QE Tapering Explained – For my explanation QE and tapering, read my QE analysis from an earlier post.  

LO Comp, Ability To Repay Qualified Mortgages. Here is Fannie’s announcement about ATR – Ability To Repay, QM – Qualified Mortgages, and the new compensation rules:  Fannie Guide Announcement.  And here is a video by the Consumer Financial Protection Bureau – CFPB explaining Qualified Mortgages and Ability To Repay guidelines :

My Disclaimer

My Schedule: I have a meeting this morning until 10:30a and then will return all calls and emails. This afternoon I have to take my son to the doctor so I will be unavailable after 2p.


Wholesale: Non-Conforming Matrix & Guidelines
Correspondent: Non-Conforming Matrix & Guidelines

Strangely Patriotic; Syria Postponed

flagStrangely Patriotic; Syria Postponed. I was the first one to the office which was typical. I turned on my computer and realized instantly that something was wrong. I clicked to and literally thought to myself, “is it a joke? No, oh my, oh my G-d!” Alone, I ran to another room where we had a TV and flipped the switch…slowly I backed away and instinctively found a seat…eyes and mouth wide open…. The next office dweller dashed in and said, “did you see…?” “Yes, I have it on the TV,” I interrupted. He sat down as if in slow motion…we watched in silence.

911One by one our employees walked in and slowly sat down…as the first one to see what was happening that morning on the TV, I filled them in…blow-by-blow. The first plane hit the first tower…then speculation…then the second plane hit…no more speculation. And then we all watched together as the first tower collapsed. I remember the gasp.

whitneyMy memory is vivid…and I wasn’t in Manhattan…I didn’t witness it first-hand. Most of us know someone or someone who know someone who was there, or maybe someone who died. As I explained to my children, yes, there are bad people out there and it’s impossible to even try to understand what goes through their heads. But there are more good people in the world…we must challenge heartless, baseless hatred by being brave, thoughtful, and kind…listen to your gut and act from your heart. It was a confusing time…one of anger, sadness, and strangely patriotic. Do you remember Whitney Houston’s performance of the Star Spangled Banner? Watch it, it’ll make you tear-up. Whitney Houston sings the Star Spangled Banner.

My Market Watch. Bonds Up. The 30-year Fannie Mae bond is trading higher after President Obama backed off an immediate air strike at Syria. I did not expect stocks and bonds to react to the news the way it did…and it’s left trading a bit, well, confused. I expected a delayed air strike to bode well for stocks since war usually results in market instability. But it looks like traders are even more uncertain because of the White House’s changed position. Because the strike on Syria is still basically pending, traders would rather invest in bonds where it’s safer. Here was what I wrote yesterday: No Syria Strike?

My Disclaimer

My Schedule: I have a meeting this morning until 10:30a and then will return all calls and emails. This afternoon I have to take my son to the doctor so I will be unavailable after 2p.


Wholesale: Non-Conforming Matrix & Guidelines
Correspondent: Non-Conforming Matrix & Guidelines

No Syria Strike? JUMBO!!


Syrian President Assad

My Market Watch. Bonds Down. Fixed -0.125; ARMs Unchanged; Jumbo Fixed & ARMS Unchanged. The 30-year Fannie Mae bond is trading lower this morning and is currently down -12bps but that is okay since it was down more earlier.

The bond has been selling better as the morning progresses…now up +9bps since rates were published. If the trend continues and bonds improve we could see a reprice improvement today. So, if you were thinking about locking, you might want to hold off to see how the market shakes up.

The big news is Syria…will President Obama back off and agree to a diplomatic solution? Considering news reports that the President’s approval ratings are in the tank, and that public opinion does not support a strike, and that the international community does not support a strike, a strike on Syria at this time is probably not in his best interests. That being said, I do support the White House in its objection to the use of chemical weapons, and I personally support a very aggressive response to it. Syria’s knee-jerk position to follow the Russian proposal seems to me a desperate attempt to hold off a strike. And since Syrian President Assad recently denied the mere existence of chemical weapons I think he’s full of it. But, maybe just the threat of an attack is all that the doctor ordered.

From a Wall Street trader’s perspective, a cease-fire is probably good for stocks, and bonds may suffer as a result. We need to wait and what statements come out of Capitol Hill today.

My Disclaimer

My Schedule: Available all day…


Wholesale: Non-Conforming Matrix & Guidelines
Correspondent: Non-Conforming Matrix & Guidelines

Crazy Weekend

pongo2Crazy Weekend. As you are probably aware by now I adopted/rescued a puppy named Pongo. Someone tried cropping his ears (meaning they cut them off) and when it didn’t work out the way the planned they stuck him in a box with 3 other pups and left them for dead in a dumpster. We took him in and all is well.  I wanted to name him Vinnie after Vincent Van Gogh but my family ignored my wishes, which sucks since I paid for the damn thing…but what can you do? Pongo sleeps through the night which is awesome since the rest of the weekend was crazy-pants. And despite urinating all over the place he seems as well-adjusted as could be expected. We’re crate-training him meaning he’s in the crate unless watched closely. I suspect he had to fight for food in his early days since he seems very overly aggressive towards my 9-year old dog when it’s time to eat. So now I have 2 little kids, a 9-year old dog, a 14-year old cat, a wife, and now a high-energy pup to care for…life is busy…life is good.

In case you missed it, here is a news story about it: Mutilated Puppy Adopted by San Diego Family.

My Schedule:  Available all day…

My Market Watch:  Bonds Up – Pricing Improved. The 30-year Fannie Mae bond is trading well this morning and is up +36bps on the day.

qetaperThe weak Jobs report Friday was just what the doctor ordered. And now there are more statements being made that increased rates might hurt the housing market further. Love it! And, war with Syria is still a very real possibility. All these things bode well for bonds.  But on September 18 the Fed will announce it’s plans regarding QE tapering. As you know by now this is where it gets sticky. I’m hoping they back off slightly and don’t come out guns-a-blazing. If so, we might be able to get away from this thing unscathed. Of course, if the bullets start flying then you can expect bonds to tank and pricing to worsen. But I think there is plenty of evidence to suggest the economy is not performing well enough to justify a full scale taper. I choose to think positively and hope for the best.

My Disclaimer

MY BIRTHDAY! Jobs Report Surprises; Pup Rescued by Me

birthday treeHappy Birthday To Me! Tomorrow is my 46th birthday. Interestingly enough my brother shares the same birthday except he was born 10 years earlier…he is 56 tomorrow. For my birthday I am going on a date with my wife tomorrow night for dinner and then the Dave Mathew’s Band concert, nice! And tomorrow night my best friend is taking me out for dinner and cocktails.

pongoYou may recall my post where a puppy was left in a closed box inside a dumpster with 3 other pups, and their ears were mutilated by some sick evil person. Well, we rescued one pup and took him home on Wednesday. I’m happy to report he is a good happy and seemingly well-adjusted pup. He slept through the night and has already brought a lot of joy into our home. His brothers and sister will be up for adoption soon. I WILL LIVE WITH JOY! Here is a news story about it: Mutilated Puppy Adopted by San Diego Family.

My Schedule: I have a luncheon appointment and will otherwise be available.

My Market Watch: Jobs Report Surprises – Bonds Up – Pricing Improved. The 30-year Fannie Mae bond is trading well this morning and is up +75bps on the day.

The Jobs report was expected to come in at 175,000 new jobs and most economists and news sites expected even more. But the report came in low at 169,000 and surprised everyone. As a result, the bond trading exploded as stocks sold off. I cannot emphasize how beautiful this report is, and how timely it was needed. if you read my late in the day Market Watch yesterday then you know how important it was.

Now things will focus on Fed policy regarding QE tapering. And, with a weaker than expected Jobs Report, the question will be whether tapering is justified. Can the economy handle significant tapering right now? The days to come will be quite interesting. We have a new Fed Chairman to replace the retiring Bernanke, a potential international conflict in Syria, and Fed policy on QE tapering. For now, we are thrilled to see improved pricing this morning and a recovery of yesterday’s losses.

My Disclaimer

Jumbo Launch Tomorrow! Roller Coaster Ride Week

jumboJumbo Launch Tomorrow!   It was scheduled for launch today but management decided to rewrite the guidelines to include higher LTVs. How can I argue with that?  I NEED INPUT ON PRICING. If you can compare our price to other jumbo lenders I would appreciate it. Please email me if you are interested in helping me do a price comparison.

My Schedule:  Available all day….

My Market Watch:   Bonds Down Slightly – Fixed Pricing Better than Yesterday Morning & ARMs Unchanged.  The 30-year Fannie Mae bond is down -14bps on the day after initially being up. This week there is a lot going on…it’s a crap shoot on which way bond prices will go. There are multiple things happening that could dramatically affect bond prices. rollercoasterWe could be in for a monumental roller coaster ride….

Jobs Report Friday.  On Friday the Jobs Report is released and it is expected 177,000 new jobs will be reported. If the actual number comes in low, then rates/pricing would be expected to improve. Why? Because if less new jobs are reported than expected, then it suggests the economy is worse than thought. Therefore, traders would rather invest in bonds than stocks and when that happens rates/pricing improve. Conversely, if more new jobs are reported than expected, then rates/prices should get worse
…this is what I am expecting based on what I’m reading this morning.

QE Tapering. The results of the Jobs Report will no doubt affect a decision on QE Tapering. From what I gather, a strong economic report would work to justify tapering since it would be evidence the economy could handle the hit. However, if the Jobs Report comes out weak and in doing so indicates less than expected economic health, then we might see a reprieve from QE Tapering, or, at least a softer approach by the Fed. This would help rates/pricing or at a minimum not hurt us too bad. Since I believe the Jobs Report is expected to come in higher than expected, I expect QE Tapering language to be unkind and rates/pricing to worsen.  

Syria Air Strike. We should know today. I expect a decision to strike, and I expect this decision will result in a decline with the stock market and an improvement in the bond market. If I’m right, and please note some vehemently disagree with me, then an announcement confirming an air strike should result in improved rates/pricing. If I’m right about the Jobs Report and QE Tapering language, then an air strike on Syria might prove to balance the bond market out and take the sting out of a bond sell off and worsened pricing. You can read more about how I analyzed the pending Syria air strike here and again here.

My Disclaimer 

O Captain My Captain!

ohcaptainO Captain My Captain!   She died a month ago of Cancer. I’ve written about my friend a few times now: here, here, and here. And so after we celebrated her life this weekend I felt compelled to write one last time…closure if you will. Per her wishes, there was no funeral, no service of any kind. Rather, she wanted a gathering of family and friends to Celebrate Her Life, and that’s exactly what we did.

Simply put, the event was perfect with respect to venue, size, length, catering, and most of all, energy. To set the scene, the family rented out a space in the History Center at Balboa Park, they set out 125 chairs, which proved inadequate, and had my friend’s favorite songs playing…John Lennon, etc. Displayed on the wall was a slide show of pictures, six of which were donated by my wife. There were gorgeous flowers on tabletops. There was one microphone.

Her husband spoke first and told their story…followed by some family and just a couple of friends. Although compelled to speak, I remained silent. With each statement a few patterns emerged when describing my friend…she was a natural born philosopher, professor and teacher of life, both on a professional and personal level. celebratinglifeShe strove to live with joy, even through 12 long years of Cancer. In fact, each day she would literally say out loud, “I will live with joy,” and she had a tattoo on the inside of her wrist to remind her…it simply said, “Joy.”

Her son had the biggest impact, at least for me. In an elegant yet inexact way, he explained how he and his Mom shared a love for the movie Dead Poet’s Society, you know, the one with Robin Williams. In that movie the English teacher played by Williams inspired his students through poetry and had them do exercises to expand their minds. He taught them the words, Carpe Diem which means seize the day…or put another way by Williams, suck the marrow out of life. At the end of the movie, after a tragic event, Williams is fired from his job and his student’s stand on their chairs in support uttering, O Captain My Captain,” a phrase from a famous Walt Whitman poem. Expand your minds, live life with passion, express yourself…suck the marrow out of life…very fitting messages to describe my beautiful hyper-intelligent friend’s existence.

At the end of his eulogy, he had the entire room stand up and we all said together…”I will live with joy.” I miss you Christianna.

My Schedule:  I have a corporate conference call at 9a and will be on my way to Irvine for meetings. Calls and emails will be returned in-between meetings and when able. If you need help with something urgent, then text me at 619-549-9797.

My Market Watch:   Bonds Down – Fixed Pricing Worse & ARMs Unchanged.  The 30-year Fannie Mae bond is down -38bps on the day so far after positive economic data was released.  My analysis about Syria remains. You can read here and again here..

My Disclaimer 

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