Ni hao, Jintao!!!

It’s funny, because only parents of young children got the joke in the title.

Let’s kick this one off by staring straight at the elephant in the room: America has just hosted the President of China, Hu Jintao. We enjoyed what a lot of news networks would like to refer to as “successful negotiations.” I am more of the opinion that it was an overall “epic fail.”

Lemme break it down. We hammered out 45 billion in trade agreements, which sounds a lot bigger than it actually is. When we brought up pertinent issues like, oh, I don’t know, flagrant currency manipulations and human rights violations, we were promptly and eloquently told to STFU and mind our own damn business by Hu (and if I need to explain that abbreviation, you don’t need to know what it means.) Yeah. So, the whole “we’re the only existing superpower on this floating rock” deal might be coming to a rapid conclusion.

As a quick aside, CNBC’s label for Hu Jintao’s visit is “The Next Cold War.” Really CNBC? Freakin’ really? I realize there are widespread consequences of our potential trade war, but really?? We aren’t threatening each other with imminent nuclear annihilation. It’s a LITTLE BIT different.

I’ve always blabbered a lot about China/US relations, but you’re gonna hear a lot more of it from me because it is becoming increasingly important. Let’s take, for example, the fact that they are raising their benchmark interest rates. Given the tangled web of financial ties we have with China, exactly how long do you think it will be before we start jacking our rates up as well? And how long after that will mortgage rates start to rise? Hmmmmm…

And to further bolster that argument, headline inflation (as measured by the Consumer Price Index) came in at a comparably hot +0.5%. Many would argue that this is as good a reason as any to start thinking about curtailing our domestic easy-money policies. And just for funsies, let’s stack on top of that an existing home sales number that leapt upwards by 12.3% in December (which is normally a crappy time of year for home sales). Anyone doubting that our economy is in the early stages of a robust recovery? Hm? Anyone? Bueller? Nah, I didn’t think so.

Coming from the inside of the housing industry, I say that we’ll take any positive news we can muster.

Speaking of housing, there is talk on the Hill about privatizing the entire mortgage market and eliminating Fannie and Freddie. That would be akin to eliminating the Pacific and Atlantic Oceans and just saying that the rivers of half the world can just flow somewhere else. Should work out great. Note the sarcasm. The fact of the matter is that SOMETHING is gonna happen. What exactly that is nobody knows yet. And that brings about uncertainty. And uncertainty brings about more hedging of bets, which is not exactly something we need to encourage mortgage bond investors to do right this second.

While I’m ranting, let me hit you with some numbers. Total licensed mortgage brokers in Florida: 42,666. Total number that applied to continue breaking people’s mortgages as of Dec 1st: 10,308. Ha ha. My competition is stupid and procrastinates. BTW, deadline was December 31st. From a purely selfish perspective, it’s kinda nice to be one of the last few men standing.

The FBI took time off from investigating shoddy mortgages to wreak holy war on the mob in New York, arresting 127 mobsters (as of the last article I saw about it) in one fell swoop. Bravo FBI. It’s good to be reminded that my industry isn’t the only one that does damage to this country.

Evidently Donald Trump is heavily considering running for president in 2012. I can only hope he does a reality show to choose his Vice-president. Mayhaps he can combine reality shows with Sarah Palin and release 10 candidates into the Alaskan wilderness whilst she methodically hunts them down.

Too far? Yeah, too far. Understood. But a fun thought nonetheless.

2011 is the year of the Rabbit, so eyes open for Elmer Fudd

Well, here we are. 2011. The packages have been torn open, enjoyed, and are now all but forgotten. All of us are about 10 pounds heavier. The hangover from New Years Eve has faded, but the shame of your actions remains. And since we’re about a week into the year, about 50% of all New Year’s reso-lutions have been tossed aside.

Ahh, new beginnings. So how are we starting this year out? Let’s have us a look-see at some of the highlights in bullet-point format…

- John Boehner just succeeded Nancy Pelosi as Speaker of the House, so now he has a larger platform to ‘not accept compromise’ from.

- China hiked interest rates in a preliminary attempt to slow down their economy’s break-neck growth pace, which surprised absolutely nobody (probably why this is the first time most of you are hearing about it.)

- Mortgage interest rates (per the average 30 year fixed) have floated up to the high 4’s - low 5’s range from the historical lows from whence they came and most analysts say that the rates we saw in 2010 are gone until Haley’s Comet comes back around.

- The economic recovery is not sufficient to alter the Federal Reserve’s plans to shovel out 600 billion more in treasury bond purchases in their debt-riddled scheme to keep rates low and growth moving.

- Don’t ask, don’t tell was overturned (although it will inevitably end up in the bottomless void of ap-pellate courts). Regardless of your feelings on the matter, you’ve gotta admit that it would be amus-ingly ironic for some dude in a fishnet A-shirt to gun down a terrorist and refer to the experience as “fabulous”.

So, things are still pretty screwy out there. From my observation, the news reports on the economy have gotten even more random. Half of the pundits out there say that everything is going to hell and you should invest in freeze-dried food, gold and guns and sit on your front porch awaiting the zombie apocalypse. Others say that everything is going to rally and you are either gonna get ridiculously rich in the process or be smashed by uncontrollable hyper-inflation.

Know what I think? Sensationalism makes for good headlines and sells ad space. Period.

The fact of the matter is that a lot of economic metrics are balancing out. Unemployment, while ad-mittedly high, is steady. Exports are rising. Stocks have done well and bonds have seen rates move upwards as a result. All natural by-products of a protracted, gruelingly long recovery that is underway. We are going to experience bumps in the road going forward, no doubt. But the trajectory I am ob-serving gives me great cause for optimism. Good old fashioned boring optimism.

Seriously, if I believed that this whole economy is as fragile as a soufflé at a heavy metal concert (take a moment for that metaphor to sink in) then I wouldn’t be in mortgage origination, would I?

And to close my first release of the year, I would like to announce that my wife and I are going to try to have our first child this year. Giggity. So expect me to be barking up your tree for referrals of people you know buying or refinancing homes. Because it’s not about me anymore: it’s about the baby.

Here’s to a rockin’ 2011, y’all!