Good morning and happy Monday. We’ll have scheduled housing news towards the end of the week, nothing in the next two days. Glancing at the landscape, we have a couple of things worthy of mention. Lumber prices have jumped back up to higher than $1,000 per thousand board feet in Jan, as floods have stalled deliveries in British Columbia. Spot sales are up 65% since Oct. Next up, if Central Banks allow home prices to collapse in 2022, it may lead to a worldwide financial crisis as the reverse of the wealth effect takes effect. The wealth effect is where people spend more because of the built-up equity in their homes. People tend to use their homes as a form of piggy bank. This has been a worldwide trend during the pandemic. Consumer spending is responsible for about 70% of GDP. The last thing on the agenda today is there’s some concern that dollar illiquidity (caused by the Fed taper) could harm the financial markets, remembering that lack of sufficient dollars led to the repo crisis in Sept. 2019.
Bonds today are up in price marginally, with 10yr T-Notes +4/32 to yield 1.39%. In MBS 30yr FNMA 2.50% are roughly unchanged at $102-10, which is a 2.03% yield and +84 to the 5.6yr treasury curve. That’s all for today. Have a great Monday and call or email with your inquiries.
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Jim Tait is a registered representative with and offers securities through Hanover Securities, Inc. (Hanover), Member FINRA & SIPC. Although this information has been obtained from sources we believe reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Securities that may be shown are subject to availability and changes in price. Past performance is not indicative of future results. Changes in any assumptions may have a material effect on projected results.
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Although this information has been obtained from sources we believe reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Loans and/or Securities which may be shown are subject to availability and changes in price. Past performance is not indicative of future results. Changes in any assumptions may have a material effect on projected results. This information from Banes Capital Group (BCG) and/or Hanover Securities is for your private use, and was obtained from sources we believe to be reliable. However, we do not represent that this information is accurate or complete, and it should not be relied on as such. This information is for institutional investors only, and as such certain transactions may give rise to substantial risk and are not suitable for all investors. This information was based on current market indicators which may vary over time. We may from time to time buy or sell, or have long or short positions in loans or securities identical or related to those identified herein.
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