Nashville Real Estate Forum

Weekend Market Update

Feb. 28-March 1, 2009

The only good news currently visible in the economy is low mortgage rates and the recently announced $8,000 gift for first-time homebuyers.

Not even the National Football League is immune to economic woes. The NFL said on Wednesday that the league dropped 169 jobs through buyouts, layoffs and other reductions. That was benign, however, when laid aside the week’s other economic news.

Stocks pushed to newer bear-market lows as an expanded federal rescue of Citigroup and a dividend cut for General Electric hit even more of their share values and the broader market.

In the last day of trading for February, traders did exactly what they had for most of the month, either selling out of or shorting large banking stocks. Pacing the day's decline, Citigroup closed down 96 cents, or 39%, at $1.50, after the Treasury Department said it is willing to convert as much as $25 billion of its preferred-stock holdings into riskier common shares. Preferred shares are generally less volatile and pay higher dividends.

Major stock indices dropped to 12-year lows during the week, cutting in half the market value from highs in October 2007. Lows reached in October and November of 2008 were violated, causing market technicians to predict another leg down. With extremely oversold conditions, it is likely the market will flatten out or rally before gathering steam for a significant, further decline, if that unfortunate scenario plays out. A Dow level of 4,000-5,000, last seen in 1995, would be the next level of long-term support, according to my amateur technical analysis.

Neither was there good news to find in the Commerce Department’s report that showed the economy contracted at a staggering 6.2 percent pace at the end of 2008, the worst showing in a quarter-century, as consumers and businesses ratcheted back spending.

The downhill slide in the final quarter of last year came as the financial crisis -- the worst since the 1930s -- intensified.

Consumers at the end of the year slashed spending by the most in 28 years. They chopped spending on cars, furniture, appliances, clothes and other things. Businesses retrenched sharply, too, dropping the ax on equipment and software, home building and commercial construction.

The nation's unemployment rate is now at 7.6 percent, the highest in more than 16 years. The Federal Reserve expects the jobless rate to rise to close to 9 percent this year, and probably remain above normal levels of around 5 percent into 2011.

30-Year Conventional Fixed
5% $200,000-$417,000

FHA-100% VA
5.5% $100,000-$393,300

100% Guaranteed Rural Housing w/no MI

5.5% $100,000-$417,000

30-Year Jumbo 3/1 ARM (10% down, No MI)

5.45% $417,001-$600,000

30-Year Super Jumbo Fixed

6.5% $750,000-$1,500,000

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Cell: 615-579-8658

"There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny." - Franklin D. Roosevelt

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination, subject to program and lock period. Market Update informs on market trends and is not a quote for a unique borrower. Reply to discontinue Update.)