Rates were extremely volatile this week. In the previous few weeks rates improved on quantitative easing chatter, and then moved higher earlier this week, then improved slightly after this week’s last Treasury auction: a nice $29 billion 7yr sale yesterday. Following the better-than-expected auction traders saw buying from money managers, hedge funds, insurance companies, some [...]

Bank Earnings Banks have virtually doubled 3Q earnings by injecting $8.1 billion into net income from funds they had set aside to cover loan losses. The 18 commercial banks with at least $50 billion in assets earned an adjusted $17 billion in the third quarter – almost half of which came from reducing their loan-loss [...]

Markets expect the Fed to announce the latest in its rate stimulus plans next Wednesday, November 3. This rate stimulus is quantitative easing, or printing money to buy mortgage and treasury bonds. When bond prices rise on this extra buying support, rates drop. But markets have already bought mortgages and treasuries heavily in recent weeks [...]

MBA Outlook: Mortgage Activity Down 30% In 2011 The Mortgage Banker’s Association thinks loan production volume will drop almost 30% from about $1.4 trillion this year to about $1 trillion in 2011. Their rationale is a sluggish economy, tough credit guidelines, and expectations that rates will creep higher during 2011. Yesterday’s loan application data suggests [...]

It’s one thing for college kids or working stiffs to pass a joint and wax philosophical about buying pot from a dealer versus a store. It’s quite another thing when a billionaire gives $1m to the marijuana legalization effort. George Soros did just that this week to support California’s Proposition 19 vote next week to [...]

The Census Bureau reported this morning that sales of new single-family houses in September 2010 were at a seasonally adjusted annual rate of 307,000, which is 6.6% above August—a month where new home sales were the second lowest ever behind May—but 21.5% below the September 2009 figure of 391,000. The September median new home sale [...]

2011 Mortgage Rate Outlook The Mortgage Bankers Association released their mortgage rate predictions yesterday. They expect rates on the 30-year fixed-rate mortgage will average 4.4% in the fourth quarter of 2010, increasing to a 4.7% average in the first quarter of 2011, and climbing to 5.1% by the end of next year. Most late-2009, early-2010 [...]

The S&P Case Shiller August 2010 report of existing home sales showed year-over-year 1.7% price gains averaged across 20 major metropolitan areas. Home prices dropped from July to August in 15 of 20 metro areas, and dropped year-over-year in 12 of 20 metro areas. This weak data reflects sustained foreclosure volumes, high unemployment, and the [...]

Quantitative Easing 101 (Part 3) The bond markets are consumed with Quantitative Easing, so here’s a third primer on the topic (and here’s part 1 with a full timeline and part 2 with currency impacts). “Quantitative” refers to the fact that a specific quantity of money is being created; “easing” refers to reducing the pressure [...]

The FDIC shut down 7 more banks Friday, bringing the 2010 failed bank total to 139. Below is a snapshot of the Friday failures, click the picture to see acquiring institutions for each. Here’s why bank failures are a bonanza for healthy banks.