Phil Grossfield's Blog


Monthly Archives: April 2015

Switzerland Here We Come!

viking cruiseGOING OFF THE GRID!  Tomorrow I’m off to Europe for a 10-day Viking River Cruise with my wife.  Did I mention we’ll be gone for 10 days?  Yes, being married to the Travel Mama has its perks and this is certainly one of them.  Oh, and did I mention we’re leaving the kids at home with Grandma and Grandpa?  The last time I had 10 days with my wife without children was more than 10 years ago.  I’m stoked!

We’re headed to Basel, Switzerland and cruising north on the Rhine River through France and Germany and ending in Amsterdam.  And, I suspect me and the wife will be the youngest, best looking, and in the best shape of all the passengers on-board!  And that will be comforting when I’m stuffing my face with fattening food and drinking lot’s of high-caloric beverages!

My only concern is being away from the kids for such a long time.  I’ve been away from them for over a week when my grandma died, but my wife was with them. The kids have never been away from both of us for more than a few days.  Although I’m concerned for my kids well-being, I’ve mainly been concerned about dying myself and leaving my kids without their parents.  Silly, huh?  You gotta live baby! 

My Market Watch (4/21/2015)

The 30-year Fannie Mae bond is -13bps since Friday’s close.  Generally a lender’s pricing worsens when the bond is sold off.  ALERT!  Although bonds are not down enough since rates were published to warrant a mid-day reprice for the worse, the technical signals are not great.  This could give Cap Markets a reason to play conservatively and issue a reprice.  If you were going to lock today, then I advise you do it now.

The bond is near a floor of support.  A floor is supposed to give traders a reason to buy and insulate us from a sell-off.  However, if the bond falls beneath the floor, then we could see a significant worsening in rates/pricing.  Again, if you intended on locking today, do it now.

ceiling to floor4


3D Printed Houses! Bonds Down

3dprinter13D Printing…On Earth & In Space.  Imagine you’re in space and something goes wrong.  The tool or part you need to fix the problem isn’t aboard.  The only way to fix it is to have as shuttle bring it from earth which would take about the time it takes to close a mortgage.  As we know, we usually want/need it faster than that!  Enter the 3D Printer. 3dprinter2A 3D printer can literally create an object from an electronic model.  If you can make it on a computer, a 3D printer can “print” it.  These machines are so advanced they can even create an object with moving parts.  And, using special bio-materials using human cells, they can make body parts and organs in perfect detail.  Below is a short but well done video on how it all works. BUT THERE’S MORE!  A 3D printer can even make food.  Oh yeah, you heard me!  If you watched Star Trek then you’d know that deep space missions are dependent on “replicators” that create food out of thin air.  That is now a reality.  The only problem with the technology at this point is that most of the food they can make will smell and taste awful…but give them 5-10 years and they’ll solve that too.  But just imagine how this technology could solve hunger issues some day…and some day is coming very soon!  Incredible. BUT THERE’S MORE!  A 3D printer can make houses.  Oh yeah, you heard me right!  Houses!  Watch the video below… 3dprinter3 My Market Update – April 9, 2015 auctionThe Fannie Mae 30-year bond was down -30bps since yesterday’s close but has recovered slightly and is down -15bps now.  Generally a lender’s pricing worsens when the bond is being sold off. I sent out an alert this morning that if you were intending to lock today then I advised you do it before a reprice for the worse.  I stand by that counsel even though the likelihood of a reprice worsening has diminished somewhat. My Disclaimer

Coach K Is A Greedy Devil — Bonds Improved

coachKCoach K Is Greedy And The Devil.  How many national championships does one coach need anyway?  You couldn’t let Wisconsin have one…just one?!!  Nooooooooo, you have to be the big shot and win them all, don’t you Coach K!  And what kind of name is that anyway?  Nobody even knows how to pronounce your name so they had to shorten it to one letter…what kind of coach has only one letter as his name?!  Is it a coincidence that he coaches for the “Devils?”  I think not!

The last time Wisconsin won a championship was 1941.  Here’s our chance we have to go up against Duke. Really?  And we have to go up against a coach with just one letter in his name.  Seriously?  And don’t give me any of this you have to be a good sport crap…only winning teams say that.

smileythumb2Okay, I’m calm now…have a great day!  🙂 


My Market Update (April 7, 2015)

The Fannie Mae 30-year bond is down up +5bps since yesterday’s close.  Generally a lender’s pricing improves when the bond is being bought.

improvementThe bond is actually up approximately +19bps since our rates came out which might influence Cap Markets to issue a reprice improvement.  Therefore, if you intended on locking today, I would hold off to see if a reprice comes our way…  Let me know if you want to discuss.


badgersON WISCONSIN!  My Facebook blew up this weekend!   I got my undergrad at the University of Madison-Wisconsin…I’M A BADGER!  When I went to school in 1986 our basketball team was mediocre.

In fact, all our teams were mediocre, except our hockey team which kicked some serious, well, you know what.  But basketball?  No way.  And I’m a huge basketball fan.  I played high school ball but I wasn’t big enough nor good enough to play college ball.  I don’t play anymore…too dangerous which is why I also gave up motorcycles.  But let’s focus on what’s real important right now…my boys are playing for the national championship tonight!  My Facebook has gone bizerko with my college friends!  I’m so stoked!  I even sent my wife a meeting request in Outlook to make absolute certain she knows where my priorities are at 6p tonight.  GO BADGERS!

My Market Watch – April 6, 2015

The Fannie Mae 30-year bond is down -26bps since Friday’s close.  Generally a lender’s pricing worsens when the bond is being bought.

The Jobs Report on Friday came in significantly less by 100,000 fewer new jobs than expected and traders jumped all over it by investing in safe bonds.  But the true impact was softened because of the holiday.  With the stock market being closed on Friday traders didn’t have a chance to sell off.  And now this morning, after the weekend’s news, traders feel just fine putting money in stocks.  That is hurting bonds and consequently our pricing.

stocksI’d say we got robbed.  We should have seen a bigger impact in the markets in favor of bonds and our rates should be significant improved.  But alas, it wasn’t meant to be.  This morning the stock market has improved and it’s sucking the gains from Friday.  At least our rates came out relatively late in the morning so pricing should have the trend already factored in.  But traditionally PMAC has been trigger happy to issue reprices for the worse in a flailing bond market.  Therefore, if you intended on locking today, I advise you do it now before a potential reprice for the worse.  Let me know if you’d like to discuss…

Frivolous Spending – Parenting Advice Requested

frivolous_spendingFrivolous Spending. Parenting Advice Requested.  Yesterday I told you about my son’s offer to pay me $57 so he wouldn’t have to take a bath. Despite my acceptance, he breached our verbal contract…but that was a different story.  But now he wants to spend $20 on Animal-Jam, an online gaming site for kids.  I am already spending $5/month for each of my kids to access this site, but now they are enticing him to spend more money for “diamonds” whatever the hell that is.  And here’s my dilemma, do I let him spend his money on this crap or forbid it?  I mean, it’s his money…he earned it.  But how do I teach him that this is throwing his money away?  The way I see it I have 3 choices:  (1) let him spend his own $20 and learn the hard way, (2) just flat-out tell him he can’t spend his money on that crap, and/or (3) tell him that if he wants to spend his money on frivolous stuff I will end his membership to the site. Any parenting advice?

MARKET UPDATE (April 3, 2015)
The Fannie Mae 30-year bond is up +36bps since yesterday’s close.  Generally a lender’s pricing improves when the bond is being bought.  Bonds reached +56bps but traders sold off some of those gains and it settled at +36bps.
SURPRISE SURPRISE SURPRISE!  This morning’s Jobs Report came as surprise:

Market expectations: 230,000 new jobs, 5.5% Unemployment Rate
Today’s Report:  126,000 new jobs; 5.5% Unemployment Rate

That’s significantly less than expectations and traders jumped all over it by investing in safe bonds.  If traditional behavior is any indication of what would happen, then traders would have sold off stocks upon hearing the negative economic report, thus paving the way for investments into bonds, but the stock market is closed for Good Friday, or Passover if you please.  What will happen Monday morning?  Will traders sell off stocks in respond to this morning’s report?  Monday is a long ways away…a lot can happen between now and then…if anything dramatic happens over the weekend it will influence trading Monday morning.

In the meantime, since the Jobs Report was so far off expectations with 104,000 fewer new jobs, I can’t help but think that traders will sell stocks on Monday.  If they do, we could see more investments into bonds and if that happens, our rates will get even better.  If you follow my analysis, then you would float your locks and wait to see what happens Monday morning.  But I must remind you, by the time the market opens Monday morning, things could have already shifted and today’s bond gains could be wiped quickly.  It’s a tough call. I can’t remember this scenario of bonds trading without any movement in stocks…it will be interesting to see how it plays out…

Read this:  U.S. Economy Gained 126,000 Jobs in March, an Abrupt Slowdown in Hiring


greedyMy son offered to give me all of his money so he wouldn’t have to take a bath yesterday. All of his money actually exceeds $57.  So, being the greedy bastard that I am, I said yes.  However, when it was time for him to pay up he had a change of heart and realized it was a bad deal.  “But we had a verbal contract,” I said.  Being 6 years old he didn’t get the concept of contracts and since I used to practice contract law I went into detail about the ins and outs of the offer, the acceptance, and most importantly breach.  But he still refused to go through with the contract, can you believe that?!  I was dead set on suing but then he agreed to take a bath so I figured my damages were minimal.

%d bloggers like this: