Locke on Stocks: 1/1/09

Monday, January 26, 2009

30-Year Fixed Mortgage Rate Sticks Over 5%

After flirting with a 4-handle two weeks ago, spurring a spate of refinancing, average national rates have popped back up to 5.42%. According to the Mortgage Bankers Association, refis account for over 80% of all new mortgage applications.

Monday, January 19, 2009

Ruble at Lowest Level Since '98 Crisis

Jan. 19 (Bloomberg) -- The ruble fell below the weakest level seen in the 1998 Russian crisis after the central bank devalued for the sixth time in seven days to protect reserves.

The currency slid to as little as 33.0455 per dollar today, the lowest since early 1998, before the government defaulted on $40 billion of debt. The ruble has lost 7.3 percent since official trading resumed this year, extending the decline to 29 percent since August.

Prime Minister Vladimir Putin pledged last month to use the nation’s foreign-exchange reserves to avoid “sharp” currency swings, after the 71 percent decline against the dollar in 1998 caused investors to flee and savers to pull bank deposits. Investors have withdrawn $245 billion from Russia since August as a 69 percent drop in oil, Russia’s war with Georgia and the disruption to gas exports exacerbated the effect of the global financial crisis, according to BNP Paribas SA data.

“Fear of another devaluation means nobody wants to buy rubles right now,” said Lars Rasmussen, an emerging markets analyst in Copenhagen at Danske Bank A/S, which rates itself among the five biggest traders of ruble in the world through Finnish subsidiary Samo Bank Plc. “The ruble has begun to look more and more overvalued because of the fall in the oil price.”

Russia’s reserves, the world’s third-largest, have dropped by $171.6 billion to $426.5 billion since August, as policy makers sold currency. The ruble weakened 1.4 percent to 37.8179 against the basket by 1:29 p.m. in Moscow, extending this year’s drop to 6.8 percent.