European Bank Stress Tests, Jobless Claims
NMLS Resource for Loan Agents
For anyone in the lending industry who need some clarity on National Mortgage Licensing System requirements and deadlines, this is a good site.
European Bank Stress Tests And Other Market Factors
How about that market yesterday? Tuesday night fixed-rate securities had “a decent bid”, in trader talk, Asia was quiet, and stocks were pretty quiet. But then, as Wednesday progressed, things changed. News came out about stress tests on European banks, a poor German factory orders number & mediocre bund auction, etc. Economists were talking about all the cash still “sitting on the sidelines”, which certainly makes a lot of sense seeing the current credit and underwriting environment.
Consumer Credit is declining, although last quarter the net percentage of banks reporting an increased willingness to make consumer installment loans totaled 14%, up from 9.6% in Q1 2009 and up sharply from the cyclical low of -47.2% in Q4 2008 when real consumer outlays fell at over a 3% annualized rate. The current willingness to extend credit is the highest since Q2 2006. It would appear that many households are paying down older, higher interest bearing debt.
Stocks got all the headlines yesterday, what with their “technical bounce” and biggest jump in a month. On the fixed income side, the 10-yr yield eased above 3% and mortgage securities backed by current coupon first liens finished the day .250 in price worse. Traders reported between $4-5 billion in MBS sales – over twice the “normal” day’s sales volume – from originators, hedge funds, money managers, insurance companies, etc. Higher coupon, existing securities did pretty well, with some news on the early pay-off/prepayment front. Basically, fewer borrowers are paying off their mortgages than analysts expected.
Jobless Claims, Treasury Auctions Next Week
In a light news week, any straw will be grasped – in this case today’s Initial Jobless Claims number received a fair amount of attention. Last week’s number showed that initial jobless claims rose by 13,000 for the week ended June 26 to 472,000, remaining stubbornly above levels that would suggest sustainable employment growth. Claims have been trending around in the 450,000-480,000 range for months now, and this morning’s number was still in that range. Many expect the unemployment rate to rise to 10.0 percent by year end – which would help keep rates low but unemployed people don’t make good home loan borrowers.
This morning we learned that Claims came in at 454,000, down 21k from last week’s revised number and better for the economy than expected. This has pushed stock futures higher, but moved the 10-yr yield back above 3%. Later the Treasury will announce details of next week’s auction of 3s, 10s and 30s – estimated at $69 billion – while we have a $12 billion 10-year TIPS auction is scheduled for 1:00PM EST. After the Jobless Claims number, stocks are pointing higher, the 10-yr yield is chopping around 3.02% and mortgages are worse by .125-.250.
Daily Humor
Three handsome male dogs are walking down the street when they see a beautiful, enticing, female Poodle.
The three male dogs fall all over themselves in an effort to be the one to reach her first, but end up arriving in front of her at the same time.
The males are speechless before her beauty, slobbering on themselves and hoping for just a glance from her in return.
Aware of her charms and her obvious effect on the three suitors, she decides to be kind and tells them, “The first one who can use the words ‘liver’ and ‘cheese’ together in an imaginative, intelligent sentence can go out with me.”
The sturdy, muscular black Lab speaks up quickly and says, “I love liver and cheese.”
“Oh, how childish,” said the Poodle. “That shows no imagination or intelligence whatsoever.”
She turns to the tall, shiny Golden Retriever and says “How well can you do?”
“Um. I HATE liver and cheese,” blurts the Golden Retriever.
“My, my,” said the Poodle. “I guess it’s hopeless. That’s just as dumb as the Lab’s sentence.”
She then turns to the last of the three dogs and says, “How about you, little guy?”
The last of the three, tiny in stature but big in fame and finesse, is the Taco Bell Chihuahua.
He gives her a smile, a sly wink, turns to the Golden Retriever and the Lab and says, “Liver alone. Cheese mine!”
