Watching rates go up for no sustainable apparent reason is about as much fun as putting away Christmas ornaments and taking the tree to the curb. As they say, “A rising tide raises all boats”, and low rates have helped every lender still in the ring, big or small, regardless of geographic concentration. U.S. Bank’s refi applications more than doubled last month. Fifth Third, the Ohio area’s largest lender, reported that refinance activity accounted for almost two-thirds of loan applications in December compared with one-third a month earlier. Even the Bank of Kentucky’s applications doubled from November to December.

GMAC Bank's parent company, GMAC Financial Services, announced that the Federal Reserve Bank has approved its application to become a bank holding company. On top of that, the U.S. Treasury announced that it will purchase $5 billion in senior preferred equity from GMAC, and agreed to lend up to an additional $1 Billion in support of their reorganization as a bank holding company.

Not much happened to the economy in the last 4-5 days, aside from dire numbers coming from retailers which ordinarily would help rates. Yet we find the 10-yr Treasury hit 2.50%! It has come back down slightly from there, but keep in mind that a) The market was overbought, suggesting that a correction was due, b) we have supply ahead with a 3-yr and 10-yr auction this week on Wednesday and Thursday, and a 10-yr TIPS auction tomorrow, c) how much lower did anyone think that rates were going to go, in the near term? Fortunately mortgage rates and doing better than Treasuries, which makes some sense given that they did not participate in the big move down. Currently the 10-yr is at 2.43%, and mortgage prices are perhaps .5 better in price than late last week, although it seems that no one is quite sure of where they should be priced!

There is no news today, aside from Construction Spending. Tomorrow we have the Commerce Department’s November Factory Orders data. This data gives us a fairly important measurement of manufacturing sector strength, both in durable and non-durable goods, and is expected down 2.6%. Also Tuesday will be the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding inflation and monetary policy. The usual Jobless Claims on Thursday, and then the final report of the week comes Friday morning when the Labor Department will post December's employment figures. Current forecasts call for a 0.3% increase in the unemployment rate up to 7.0%, and Nonfarm Payroll -500,000.

Warning: risqué.

An attorney arrived home late, after a very tough day trying to get a stay of execution. His last minute plea for clemency to the governor had failed and he was feeling worn out and depressed. As soon as he walked through the door at home, his wife started on him about, “What time of night to be getting home is this? Where have you been? Dinner is cold and I'm not reheating it.” And on and on and on.
Too shattered to play his usual role in this familiar ritual, he poured himself a shot of whiskey and headed off for a long hot soak in the bathtub, pursued by the predictable sarcastic remarks as he dragged himself up the stairs.
While he was in the bath, the phone rang. The wife answered and was told that her husband's client, James Wright, had been granted a stay of execution after all. Wright would not be hanged tonight!
Finally realizing what a terrible day he must have had, she decided to go upstairs and give him the good news.
As she opened the bathroom door, she was greeted by the sight of her husband, bent over naked, drying his legs and feet. “They're not hanging Wright tonight,” she said.
He whirled around and screamed, “FOR THE LOVE OF GOD WOMAN, DON'T YOU EVER STOP?!”