What We're Hearing

So much for the housing recovery. Yesterday's news that the pending home sales index fell by 16% sent minor shock waves throughout the financial system. Or perhaps the story was overplayed in the media? It's hard to say but we know a few things: the government realizes that in lieu of a fast recovery in employment it will have to keep rates low for the remainder of 2010 which means the Federal Reserve will keep gobbling up Fannie Mae and Freddie Mac MBS -- despite stated plans to pull out of that market come the spring. When it comes to buying and refinancing homes, there are two key factors: rates and employment. This Friday the Department of Labor will unveil the latest unemployment figures. A new ADP Employer Services report showed a smaller-than-expected slowdown in job losses in December. ADP is a precursor to the DOL numbers. Economists are looking for a loss of 8,000 jobs after a surprisingly small loss of 11,000 jobs in November...