Archive for January, 2010

On Being Rude

This is another of an occasional Series of Short Takes on salient issues of the day.  Unlike most of these, this one is neither religious not political, although if you’re looking for a way to get in your daily quota of being-offended-by-someone, then you’ve come to the right place.

Some of our children – four, I think – attend a local charter school.  We love it.  Anyway, since there are no buses for charter schools, all the kids get there by parent transportation.  This leads to large lines at certain times of the day, as all the parents come to drop off or pick up their kids.  As the geography of this thing sits, there is a long street that leads directly to the front door, and parents are encouraged to queue down that long street.

But there is also a side street that enters that long street about halfway to the school.  Once, when the school was new, the queue went down that street, but it has since been posted that that is not the way to come.  Still, even today, occasionally someone enters the queue from that street, effectively cutting the wait in half.

Apparently, this irks some people.  Yesterday, my wife found a sign hanging from the fence along the street that said “Butting in line is RUDE.”  Interestingly, and quite out of character for her, she got out and took the sign down.  We’ve been talking about it some since then, and I have a couple of thoughts.

First, rude is in the eye of the beholder.  I frequently have to cut off some rambling story by one of my clients because I do not have unlimited time to listen.  I’ve gotten to be fairly good at this over the years, and ordinarily they take no offense, but once in a while they get a bit miffed.  I used to apologize in those cases, but I’ve stopped doing that.  The fact is, I can’t apologize for you being offended by something.  Since I’ve done nothing wrong, nor have I done anything with a heart at war with you, I’m not sorry that I did what I did.  I am sorry you feel the way you do, but being sorry is not the same thing as apologizing.

So is it rude to cut in line?  Well, to me, that depends.  Why are you doing it?  Do you need to get somewhere immediately?  Is there an emergency?  If there were, wouldn’t I be glad you had enough sense not to wait in line for everyone else?  I think I would, or at least, I would hope to be sane enough to be glad. In those cases, no, I don’t think it’s rude to cut in line.  What about if you just don’t know?  What if you’re a dad, like me, and you’re basically clueless about how one goes about doing this thing?  Is that rude?  I don’t think so.  What if you’re just better than all the rest of us poor schmoes and you think you shouldn’t have to wait?  Well, that’s probably rude, then, because its a product of incorrect thinking.

But a larger point is this: I don’t know, and I don’t care.  Perhaps you are inconsiderate.  Perhaps you need taking down a peg.  Perhaps you are rude and “ignernt” (as some Utahns pronounce “ignorant”, meaning uncaring and unfeeling towards others.  Yes, I know that’s not what that word means to others).  If so, then I feel sorry for you.  Perhaps you have a genuine emergency.  If so, then I cheerfully encourage you to cut in line.  Perhaps you are actually ignorant.  In that case, given a chance, I’ll be happy to help you understand better, but until then, hey, don’t worry about it.

There’s a bigger problem lurking here than people that cut in line.  If you’re stewing over this so badly that you feel the need to spend a couple of hours making a 3′x4′ laminated sign (using the Battlestar Galactica font from the 1980′s, which tells me other things about you), then you need desperately to seek psychiatric evaluation.  I realize that what the cutters are doing is wrong.  I realize that it sets your day back by 30-45 seconds when they do it.  I realize that you are the soul of virtue and rectitude, and you would never be so ignernt as to cut in line.

Actually, though, that’s not true.  You have the same problem that the cutters do.  You blame the cutters for treating you as an inferior object, but you are engaging in that same behavior toward them.  The difference is, they’re at least bold enough to risk the scorn of others by openly displaying that contempt.  You’re not.  You haven’t the guts to treat others the way you really feel about them.  You hide behind the rule.  This seems silly.  If you really need to save time, why don’t you cut in line?  And if you don’t cut in line because you’re too considerate of others, then what’s with the sign?  Or are you only considerate of those that are acting the way you want them to?  Do not even the publicans so?

Being a fairly strict rule-keeper my own self, I get a lot of opportunities to condemn other people for not being as strict in the plain road as I am.  I do catch myself sometimes chafing when other people seem to be breaking the rules and getting away with it.  I have consciously tried, though, for going on 20 years now, to stop, to catch myself when I start being annoyed that someone, somewhere, might be having more fun than I am, and to pause for a moment to consider exactly why I’m keeping the rule in the first place.  I should be keeping the rules because doing so makes me a better, happier person.  And if that’s true, reacting with offense toward someone who is breaking the rules is irrational.  Who’s the victim here, anyway?  And if the rule is so stupid that I’d actually be a better person if I broke it – and folks, there are a whale of a lot of those kinds of rules – then I better just man up and break the rule, not chafe over someone else that has more guts than I do.

This isn’t such a short take, is it?  Well, sue me.  Or better yet, just let it go.  I’d stay and chat, but I have to take my kids to school.

I kind of am in a hurry, too….

RateWatch Jan 28 – Conventional “Wisdom”?

Markets: We’re trading in a very narrow channel this week, and no news is good enough or bad enough to get us out of it.  Our benchmark 4.5% FNMA 30-year bond is off 3bps, meaning it’s flat for all intents and purposes, exactly as it has been for the past week.  We successfully weathered another $12 billion in bond auctions this week without a blip.  This is remarkable, and ought to be telling smart people something.  More on that below.

Analysis: I want to point everyone at a really interesting article from the Wall Street Journal about what’s coming in interest rates on mortgages when the Fed stops buying mortgage-backed securities.  For a long time now, conventional wisdom has held that the only think keeping interest rates this low (5% as of this writing, and a fraction lower in some instances) is the presence of the Fed, doling out huge chunks of money to keep the mortgage market stable.

But look, people, this can’t be right.  Market players aren’t stupid.  They can see the same things everyone else can, and if they really thought that the true market level – minus the Fed – was 6%, we’d be seeing a move in that direction right now.  Instead, what we see is…nothing.  And that’s not because the Fed is buying everything in sight, either.  The markets just don’t believe that there’s going to be a big rate move on April 1.  I don’t believe it, either.

Action: That means that the true market mover right now is the new home purchase market, because the $8000 tax credit for first-time homebuyers and the $6500 credit for long-time owners will expire on schedule.  Houses must be under contract by April 30, and the close deadline is June 30.  If you’re in this market, now is the time to move.  Short sales take an average of 40 days to get completed, which leaves us about a month of extra window in case something goes kablooie.  Which in this market, folks, it does with regularity.

Been saying it for a while.  Do not wait.

RateWatch Jan 21 – Not So Fast

Markets: A slow burn downward has reversed itself, and the market has now gained ground four of the past five days.  This keeps rates firmly at 5%, and even lower than that on some programs for those with great credit.

Analysis: It just doesn’t appear that there is any steam in the bond selloff.  The latest rounds of 3-, 5-, and 10-year bonds were met with extremely hot demand, especially from foreign buyers.  China may be scaling back its purchases, but other nations are picking up the slack.  Bonds are still hot.  Nobody is sold on the recovery yet.  Even the looming threat of the cessation of Fed purchases is not having any impact on bond prices.

Action: the phrase “smoke ‘em if you got ‘em” comes to mind.  Everyone knows that with the historical average for interest rates at almost 3 points above our current levels, this can’t last.  There’s no way that 5% can be the new normal, and rates are going to rise.  When, nobody knows (we’re already a year and a half past my prediction, in the interest of full disclosure).  But the incentives to purchase will not be extended again, and rates simply can’t get better than this – we’ve had this range now since Thanksgiving of ’08.  You wait, you’ll regret it.

Thanks to so many of you that supported our seventh annual Twelfth Night Charity Ball last week.  It was a great event, and we think we’ll be supporting both Heart-2-Home and Noah’s for the forseeable future.  Look for us next year a bit later in the year.  We’re looking at March instead of January, but more details on that forthcoming.

RateWatch Jan 12 – Tomorrow We’ll See

Markets: Bonds were up slightly today, trading up against a line of resistance.  For the uninitiated, a line of resistance is an average, usually a 25-day or 50-day or 100 day, or what have you, that cuts across the bond price chart.  Those lines form “resistance”, against which bond prices have to push in order to move higher.  They also form “lines of support”, which keep bonds from moving lower.  Generally speaking, the markets will need something unusual in order to punch through a line, some news that is unexpected.  Nothing like that was in the offing today.

Analysis: Tomorrow and the next two days are the real kickers, with the Fed Beige Book tomorrow, and the retail sales and consumer confidence numbers Thursday, followed by a blizzard of numbers Friday, headlined by the Consumer Price Index.  Weak numbers will be good for bonds, strong numbers will be bad.  Good for bonds means good for interest rates.  I realize that means that a bad economy is good for interest rates, and that’s not strictly true, but for rough purposes, that’s where we are.

Actions: Watch for RateWatch on Thursday.  That’s when we’ll know what direction the market is heading.  But if you’re in the market for a short sale, your real deadline for getting an offer in is the end of the month.  Banks are moving glacially on approvals for those.  Remember that you have to be under contract by April to get the first-time or long-time homebuyer credit.

Thursday RateWatch will be interesting, as that is the date of our seventh annual Twelfth Night Charity Ball, and even that we throw to help raise funds for a local charity.  This year it’s the Heart-2-Home Foundation, also known as Utah Home Makeover.  I’ve been on their board for a couple of years, and I really believe in the work they do.  If you go to the website – – there’s a link to more info.  If you’re out of state, and many of you are, you can buy a memorial ticket that will send some badly-needed funds to this great organization.  Please take a second.  I’d appreciate it.


RateWatch Thursday – The Waiting Game

Markets: We’re flat, again, down 6.25 bps (that’s basis points, meaning that the bond market for the FNMA 30-year 4.5% bond has fallen .0625%), which won’t have any impact on pricing.  Markets are waiting on the employment numbers coming out tomorrow.  If those are good, bonds will fall and rates will rise.  Right now we’re at about 5% on both the conventional and FHA 30-year fixed products, depending on a host of factors I’m sure you’re aware of.

Analysis: It’s a new year, and the stock markets are liking that, but the bond markets are not; at least, they have not been able to hold the gains of late 2009.  Not a big surprise, since, it bears mentioning, we’re at rates so ridiculously low that it defies all comprehension.  If you think the real-estate market is bad now, wait until you see what happens when rates rise to historical averages, around 7.6%, which we keep thinking is going to happen one of these days.

Action: If you’re looking at a refinance, and you’ve got a rate of 5.5% or more, especially if you’ve had something holding you back, like income or credit difficulties, PLEASE call us.  We will not be at 5% by the end of the spring.  I can promise you this.

If you’re looking to buy, the government will give you at least $6500 to do it, but you have to have the house under contract by the end of April, so waiting on that is also unwise.  Try our Guaranteed Approval Program.  If we accept you, we guarantee you a home loan, no matter how impossible your situation seems now.

As mentioned last time, we’re going to be on a regular Tuesday/Thursday schedule this year, so you can depend on RateWatch coming to you those days, and anytime the market moves hard, up or down.  Spread the word.  We’d like to get this information in as many hands as possible.

Here’s to a Prosperous New Year, for all of us.


Chris Jones, Branch Manager, City 1st Mortgage Services (801) 310-3407