HAPPY HALLOWEEN! Does my MO scare you?!

Last year I grew a gnarly mustache and beard. It was so thick you could barely see my face at all. When you think MAN, think Phil. When you think SCARY MAN, think Phil. Below in the image I explain why I decided to grow my mo for cancer research last year. This year my buddy Mathew and I started a team…JOIN US.  ALL YOU HAVE TO DO IS NOT SHAVE.

My Market Watch:   Pricing Holds Strong. Bonds Up. Fed Policy Statement Uneventful.  Despite the nes reports, I found the Fed Statement to be uneventful. Nonetheless, bonds sold off yesterday in what could have been a big move into negative territory, but the 200-Day Moving Average floor saved the day. As of now the Fannie Mae 30-year bond is performing well and is trading positively. Moreover, the bond is trading north of the 200-day moving average floor and that allows us to take a deep breath and focus on originations….

MOVEMBER IS HERE!  JOIN ME!   ARE YOU A PUNK? JOIN ME FOR MOVEMBER  

What is Movember you ask? It is an annual fundraiser for research of men’s Cancer afflictions such as prostate and testicular Cancer. Instead of running or selling cookies or something, all you have to do is do nothing. That is, don’t shave for 1-month. Grow a mustache or beard or both. Get people to sponsor you by donating on your behalf, or, better yet, get them to join us. But BE SCARED OF MY MANLINESS, PUNK. I know what you’re thinking, ‘how could I possibly compete with Grossfield’s overly masculine persona which is clearly expressed by an impressive growth of burly lip hair?” And your concern is well-taken. My manliness is unobjectionable. If I were you I’d be scared too. How could your punk-ass compete with me? In case you’re wondering, I’m callin’ you out. You got a problem with that? Good, then do something about it. Sign up and grow your mo. All you have to do is not shave! That’s it! Can you hack it? Are you a punk? COME ON! JOIN ME AND GROW YOUR MO

My Market Watch:   Pricing Improved! Bonds Up.  Fed Policy Statement Day.  The Fannie Mae 30-year bond has been trading up this morning, but not by much. Nonetheless, Capital Markets has improved pricing significantly in some coupons. Everyone is waiting for today’s Fed policy statement at 11a PST.

The Fed is not expected to make any changes to Quantitative Easing. QE is the Fed’s monetary policy of spending $85 billion per month on the purchase of bonds. By doing so the Fed has artificially created a booming mortgage business most of us has enjoyed for years now. Without going into detail, the Fed was expected to back off that policy, or Taper QE. But because of recent economic reports, and because of the Government’s recent ridiculous unnecessary shutdown, the Fed is expected to maintain the status quo, at least until 2014. This bodes well for bonds since it assures investors that pricing will stay low. Stay tuned…any statement to the contrary this morning would definitely throw the market into crazy-pants!

MOVEMBER IS HERE!  JOIN ME!   What you see in the picture is my mustache from yesterday…yes, it only takes one day for me to grow an incredibly masculine upper lip. Yes, that’s a lie. Actually, that took me about a month to grow but I feel no less manly just the same. IT’S TIME!

JOIN TEAM GROSSFIELD NOW!  Click here and join my Team

All you have to do is not shave!  That’s it!  Then you ask people to donate to Cancer research. Donations can be $5…it doesn’t matter because everything counts. Oh, and it’s fun! Each day or so in November I’ll be posting my progress over the course…trust me, it will be entertaining.  So join me and GROW YOUR MO!

My Market Watch:   Bonds Flat – Pricing Same As Yesterday.  The  Fannie Mae 30-year bond has been flat all day. Everyone is waiting for tomorrow’s Fed policy statement and employment numbers.

The Fed is not expected to make any comments on Quantitative Easing. The only wild card in tomorrow’s statement would be that. All eyes are focused on tomorrow. Without any information to suggest that QE tapering is back on the table, rates/pricing should hold strong through tomorrow’s reports. Hang on!

Ginger!  Pongo’s sister is up for adoption. I wanted to adopt her myself but I have a wife, 2 kids under 10, an 85-pound 9-year old dog, a 15-year old cat, and Ginger’s brother, Pongo, who is just 5-month sold. That’s enough!  I met Ginger at the Helen Woodward Animal Center HOPE Telethon. She was abused just like Pongo…see the ears? She was in worse shape than Pongo when they found the dogs in a dumpster, left for dead, but Helen Woodward Animal Center nursed her and the others back to good health. Now she just needs a home. Go adopt Pongo’s sister, Ginger. She’s just like MaryAnn, small and sweet.

Pongo is a star! We’ve been in a few articles now and on KUSi News once already…and now they asked me and Pongo to come back and do a live interview for their HOPE Telethon. The last time we were interviewed for KUSI News they completely edited me out and only used my wife’s comments. No, my feelings were definitely not hurt. But this time it was just me…nobody to bail me out. Oh, and it was LIVE TV.  Holy crap. But I think I did okay…you be the judge. The Sea World folks were there too and they all recognized Pongo right away…he’s famous! They asked for a picture so we obliged. I tried to get a picture of Pongo in Shamu’s mouth but Pongo wasn’t having any of it.

My Market Watch:   Bonds Flat – Pricing Similar to Friday.  The Fannie Mae 30-year bond is flat and there is virtually no activity. I think everyone is waiting for Wednesday when the Fed’s policy statement is released with the ADP employment numbers.

From what I read nobody is expecting any surprises from the meeting which starts tomorrow and ends Wednesday morning. Each month this year a meeting such as this would be humongous news since the Fed was considering a change to monetary policy as it pertains to Quantitative Easing. But not this month. As I’ve written recently, the government shutdown coupled with the recent economic data has curtailed any expected change in policy. Barring a monumental surprise by the Fed, things should be relatively uneventful.

For the record, I know this is a boring report…and boring is good.

TV Star! Yep, I was on TV With My Family.  Interestingly enough, the TV station interviewed me and my wife but only her comments were used. Hmmmm. Don’t they know I do public speaking all the time?!  Oh well, I guess they only wanted the TravelMama’s expert comments…and the message was great.  🙂
Click here to see the news story.

My Market Watch:   Bonds Up – Pricing Improved Already.  The Fannie Mae 30-year bond is up but only about +8bps…not enough to affect pricing much. Today should be a slow day for trading but next week things could get spicy.

The big news for me is that the 30-year bond is trading above the 200-day moving average. This is a significant event. First, let me explain moving averages and how they work.

A Moving Average is a trend in bond trading…it simply tracks the buying and selling of bonds. For example, we can track the trading of bonds over 25, 50, 100, and 200 days Moving Averages, among others if desired.

An easy way to think about Moving Averages is to think of them as floors and ceilings. And think of the bond itself as a glass elevator. As bonds are bought the elevator goes up…when bonds sell off the elevator goes down (when up rates improve…when down rates get worse). Over the last 10 months the bond was trading below the 200-day moving average…rates got worse.  But just recently the bond has been bought enough to keep it ABOVE the 200-day moving average. This is fantastic news.

Traders now watch the trend in bond buying and selling to give them an idea of where the bond is heading. This is where the elevator comes in. If the bond is being bought the elevator goes up and approaches a ceiling. This ceiling is considered resistance because the elevator might stop and head back down. If the bond continues to be bought, then the elevator just keeps going up until it approaches another ceiling, and so on.  If the bond is being sold off, then the elevator goes down and might stop at a floor and head back up, or, it might go through the floor and down to the next floor.

In sum, when bonds are being bought, the price of bonds goes up, the elevator goes up, rates/pricing improve. When bonds are being sold off, the price goes down, the elevator goes down, and rates/pricing worsen.

Right now the bond is being bought above the 200-day moving average and this is good, very good for rates and pricing. Assuming the prediction that QE is in effect into 2014, we should have a nice run here for the next several months.

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

Annual Birthday Dinner Party.  I love traditions and this is one of my favorites. My best friend’s wife, my wife, and one of my closest friends share September birthdays. So, for about 10 years we have celebrated together by having a fancy meal and excellent wine.

In years past the two hosts of this shindig were actually not September birthdays…my best friend and one of our closest friends that recently passed-away from cancer. They were the ones that started this whole thing by cooking us a ridiculously extravagant dinner coupled with off the hook wine pairings. In one year we had a professional chef come to the house and prepare dinner and in another year we went out, simply because we needed to simplify things for obvious reasons. This year however we celebrated like we did in the beginning, except that we all shared in the cooking responsibilities.

We had tuna sashimi, home-made pasta with killer pesto sauce (my friend Rob is shown in the picture above making it), bacon-wrapped scallops, sous vide salmon. My wife made chocolate fondue and I made creme brule from scratch, and I have to admit it was pretty awesome. In the end, we toasted to our missed friend, indulged obnoxiously by over-eating, over-drinking and having a fabulous time.

My Market Watch:   Bonds Up – Pricing Improved Already.  The Fannie Mae 30-year bond is treading positively again, now up +13bps on the day. It would have been more but a Chinese economic report came out regarding increased inflation…and bonds hate inflation. This has unfortunately kept bond trading tempered.  Here is my report from yesterday, in case you missed it:

The weak Jobs Report this morning will benefit us for the remainder of 2013.  First, for now rates/pricing have improved across the board, meaning both Fixed and Arm coupons. Second, and more importantly, there is a strong likelihood that any discussion of QE tapering will be pushed into 2014.

The Jobs Report came in at 148,000 new jobs when it was expected at 180,000 new jobs. Now, if you think like a trader on Wall Street then this news makes you uneasy about the stock market. Why? Because new jobs reported is an indicator of economic strength. That makes sense, right? More new jobs means things are generally better…the economy is booming. But the opposite is also true…less new jobs means a weaker economy, and this morning’s report was 31,000 less new jobs than expected…ouch! So, traders feel the economy is weaker than expected, and therefore they’d rather put their money elsewhere, like into the bond market. When traders invest in bonds, our pricing is directly affected in a positive way. This morning bond pricing jumped +40bps. This improved rates significantly across the board.

More importantly, the discussion of QE Tapering is likely pushed into 2014. Why? Because the Fed’s argument for tapering QE is based on the strength of the economy. That is, if the economy is improved, then it can withstand QE tapering.  If you recall, Quantitative Easing is the government’s monetary policy of spending billions on bonds in order to keep interest rates low and stimulate the economy. As long as bonds are being bought the price of bonds remains low and this has kept our mortgage rates low for a long long time, thank you very much! Many have argued the government is way overdue to back off QE or taper QE…meaning stop buying so many bonds. If the government tapers QE, bond prices will increase and rates with it. In fact, the mere discussion of QE tapering influences traders to sell off bonds since low rates would no longer be expected. But now we have no reason to believe QE tapering is an immediate threat. Not too long ago weak economic data pushed QE tapering to the side and then the government shut down. Now the economic reports indicate a weak economy pushing the possibility of QE tapering even lower. And, we have a new Fed Chairman coming in…and she is not a fan of QE tapering. For these reasons, I think we can expect low rates for the remainder of the year.

Looking at today, I see the bond has pushed through an important ceiling of resistance and this is a very good thing. If the bond can continue to trade above this ceiling, then naturally it turns into a floor of support. We want that to happen as much as we want the Minnesota Vikings to win…and everyone wants that!

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

My Market Watch:   Weak Jobs Report!

The weak Jobs Report this morning will benefit us for the remainder of 2013.  First, for now rates/pricing have improved across the board, meaning both Fixed and Arm coupons. Second, and more importantly, there is a strong likelihood that any discussion of QE tapering will be pushed into 2014.

The Jobs Report came in at 148,000 new jobs when it was expected at 180,000 new jobs. Now, if you think like a trader on Wall Street then this news makes you uneasy about the stock market. Why? Because new jobs reported is an indicator of economic strength. That makes sense, right? More new jobs means things are generally better…the economy is booming. But the opposite is also true…less new jobs means a weaker economy, and this morning’s report was 31,000 less new jobs than expected…ouch! So, traders feel the economy is weaker than expected, and therefore they’d rather put their money elsewhere, like into the bond market. When traders invest in bonds, our pricing is directly affected in a positive way. This morning bond pricing jumped +40bps. This improved rates significantly across the board.

More importantly, the discussion of QE Tapering is likely pushed into 2014. Why? Because the Fed’s argument for tapering QE is based on the strength of the economy. That is, if the economy is improved, then it can withstand QE tapering.  If you recall, Quantitative Easing is the government’s monetary policy of spending billions on bonds in order to keep interest rates low and stimulate the economy. As long as bonds are being bought the price of bonds remains low and this has kept our mortgage rates low for a long long time, thank you very much! Many have argued the government is way overdue to back off QE or taper QE…meaning stop buying so many bonds. If the government tapers QE, bond prices will increase and rates with it. In fact, the mere discussion of QE tapering influences traders to sell off bonds since low rates would no longer be expected. But now we have no reason to believe QE tapering is an immediate threat. Not too long ago weak economic data pushed QE tapering to the side and then the government shut down. Now the economic reports indicate a weak economy pushing the possibility of QE tapering even lower. And, we have a new Fed Chairman coming in…and she is not a fan of QE tapering. For these reasons, I think we can expect low rates for the remainder of the year.

Looking at today, I see the bond has pushed through an important ceiling of resistance and this is a very good thing. If the bond can continue to trade above this ceiling, then naturally it turns into a floor of support. We want that to happen as much as we want the Minnesota Vikings to win…and everyone wants that!

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

1. The Tooth Fairy visited my daughter last night. Interestingly enough, my daughter left a note for the Tooth Fairy asking for $10 because there was a special book she wanted to buy at her school’s book fair. But the Tooth Fairy didn’t oblige…no, too cheap I guess. The Fairy didn’t even have enough dollars for my daughter’s tooth last night…she left $5 in quarters in place of the tooth…and the note.
2. Online locking is available for current rates until Sunday night 9:45p. The market cooled down this afternoon but bond prices held strong. All in all, it was a great week for bond trading and for our rates/pricing. I expect bonds to be sold off next week (1) since technical signals indicate we’ve reached a ceiling, and (2) I think traders will sell off to take gains from the week.
3. Interbank’s only Fee is our $699 lender fee. We have no Redraw Fee, no Trust Fee, no Flood Fee, no Wire Fee, and no Phil’s Reconstructive Facial Surgery fees.
4. Have a great weekend…! 🙂

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

Thriller Terror.   Like a major league ding-dong, I let my 8-year old daughter and 5-year old son watch the beginning to Michael Jackson’s video yesterday…here was yesterday’s post. Well, I was punished and rightly so…I had to sit in my daughter’s room until she fell asleep, which was much later than usual, and my son slept in my room. That wouldn’t be so bad except my son sleeps like he’s angry…it’s not pleasant.

In other thrilling household news, the Tooth Fairy paid my son a visit last night and left him $5. Isn’t that a lot of money for a 5-year old tooth? Or am I that old? He lost a tooth last week and also got $5…that makes $10 in less than a week. And my daughter lost a tooth this morning…another $5? The Tooth Fairy needs more loans people!  Lock ’em in!

My Market Watch:   It’s Over – the Government Opens It’s Doors. Bonds Up +38bps.  The  30-year Fannie Mae bond reacted positively to the end of the government shutdown. As previously mentioned, this is fantastic news since most predicted a relapse in lending rates/pricing. But thank goodness that didn’t happen. The 30-year Fannie Mae bond opened +38bps better this morning and held its ground all day.

Now, if you follow my Blog I rarely get political. That’s not to say I don’t type about politics, but usually I stay close to the middle and point out the strengths and weaknesses of the counter arguments. But not this time. No, this time I’m just, well, angry. I’d say disappointed but the emotion is stronger than that. Here was my sarcastic post on September 30.

I’m angry that the government shutdown was entirely unnecessary and avoidable. I’m angry that the 15-day shutdown cost billions. I’m angry that the GOP party leaders tried to change an already existing law, Obamacare, using extortion instead of due process. I’m angry that the GOP leadership is so far out of reality that they cannot learn from their mistakes, namely, failing to appeal to the middle-minded Americans after losing back-to-back elections. I’m angry that our President and his cabinet are unable to bring our leadership together.  I’m angry this whole debacle got us no closer to a resolution and will simply resurface in 90 days.

I once drew an analogy that the government is like a football team and President Obama is the current coach. You may not agree with his game plan at first, and you may not like him at all, but the only way to get to the playoffs is to work together and execute the game plan. If it doesn’t work, then you fire him and get a new coach with a new game plan. That’s how it works. One thing is certain, if half the team works against the coach, the game plan will surely fail. Well folks, I hate to say it, but our team is failing miserably.

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

Thriller Terror Tears.   My daughter screamed and ran into my arms. My son looked at me like I was completely out of my mind. I know it’s hard to believe, but I can be a complete bonehead sometimes – this be one of those times matey. Michael Jackson’s Thriller is in some kid-commercial during the SpongeBob Squarepants show. I started singing along and my daughter was amazed I knew the song. I told her there was a cool video and she wanted to see. MISTAKE!!  I never thought it was scary but the opening scene is terrifying to an 8-year old, particularly when he transforms into a werewolf. Needless to say, I did not get any parenting awards this morning and no doubt I’ll pay dearly in my efforts to sleep through the night this evening…. Watch it here.

My Market Watch:  Bonds Up but Pricing Down – Gov’t Shutdown 16 Might End.  The 30-year Fannie Mae bond is trading higher on news that the government might reach an agreement and reopen. This is counter-intuitive since most believe an end would result in an improved stock market. Typically when the stock market is doing well the bond trading suffers. On thing is for sure, almost all economic reports and geopolitical news is taking a backseat to this issue. Traders seem to be focused on the government drama.  Based on the activity this morning, there is a strong likelihood we will have Reprice Improvements coming.

Government Shutdown Remains. It is now day 16…I reiterate my point that Obamacare is a valid law, enacted by due process.  Again, if Republican leaders don’t like it, then they should work to change it using constitutional methods, not extortion. Whether you like Obamacare or not, and whether you are Democrat or Republican or otherwise, you should not excuse our GOP leaders’ actions. I don’t mean to be overly political, but I am extremely disappointed.

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