Stocks are flat today (S&P -.17, Dow +1.51) as are bonds (10yr Note +6 bps, FNMA 30yr 4% coupon +9bps) as markets prepare for the Bureau of Labor Statistics (BLS) jobs report tomorrow. Consensus estimates call for +188k non-farm jobs to be added to the economy in April, but that number could be meaningfully higher.
March 2011
Yesterday I summarized new Finreg rules requiring banks to retain at least 5% of loans they sell into secondary markets, and outlined which Qualified Residential Mortgage (QRM) loans will be exempt from this rule. The exemption debate rages, and here’s the Mortgage Bankers Association’s “profound concerns” on the matter. The QRM proposals are now open
Mortgage bonds are trading higher today (FNMA 30yr 4% coupon +28 basis points) which helps make up for yesterday’s 43 basis point loss. The two day net loss on bond prices means a slightly upward rate trend because rates rise when bond prices decrease. Yesterday the Conference Board’s March consumer confidence showed a decline, confirming
Yesterday’s S&P Case Shiller January 2011 report of existing home prices showed average U.S. home prices declined 3.1% from January 2010. Also January was the sixth straight month with a lower reading from the prior month, which reflects sustained foreclosure volumes and high unemployment. U.S. home prices are now at similar levels to what they
Like driving a faulty-brake Toyota, working in the mortgage industry can make you wonder if large-scale regulatory change will ever stop. Just as companies finalize their loan agent compensation plans to comply with Friday’s Finreg deadline, now the they must turn attention to what loans do and don’t fall under risk retention guidelines. Also under
Do rates tend to rise on inflation and fears of inflation? Remember that the real interest rate includes both inflation and the nominal rate of interest. In the case of a loan, it is this real interest that the lender receives as income. If the lender is receiving 3.5% percent from a loan and inflation
Do rates tend to rise on inflation and fears of inflation? Remember that the real interest rate includes both inflation and the nominal rate of interest. In the case of a loan, it is this real interest that the lender receives as income. If the lender is receiving 3.5% percent from a loan and inflation
This Michael Bay Angry Birds movie looks ok, but there are not even close to enough explosions. Impostor!
Stocks are up slightly and bonds are even today after slightly higher consumer inflation and better than expected pending home sales reports are washing each other out. This even-rate, higher-stock mood kicks off a big week of inflation, home price, and employment data that could push rates up. The Fed’s preferred measure of inflation, the
Twenty-six banks have failed in 2011. Friday the FDIC closed Advantage National Bank Group (IL) assuming all the deposits (liabilities) of the Bank of Commerce (IL). Which brings up the question, “Do regulators see trends in problem banks?” Generally speaking, regulators see some key characteristics they frequently find in these institutions, none of which be
This Friday, April 1 is Finreg implementation day for the mortgage industry. What bank lobbyists sold to Dodd and Frank as consumer protection is a clever way to increase profits: the new rules change almost nothing about banks’ secondary market and trading operations, and mandate a new loan agent compensation model that gives banks the
Dallas Fed president was out in force last week with anti-inflation warnings, first during an interview with Reuters, then during a speech in Brussels. Yet throughout the crisis recovery period, he’s used his position on the FOMC to vote for near-zero overnight rates and to press forward with two rounds (and more than $2 trillion
Rates ended last week up .125% after being even for three weeks. Poor new and existing home sales, rattled consumers, and the Portugal flare-up in Europe’s debt crisis last week would normally cause rates to drop as mortgage bonds rally. But bonds lost ground as investors moved to stocks, pushing the S&P 500 up 2.7%
Here’s a snapshot of next week. See our WeeklyBasis report on what it all means.
Even with today’s rebel victory, political chatter is red hot since the UN authorized a coalition of nations last week to bomb Libya in order to protect citizens there from their own leader. Should Western nations even be involved? Can you enforce the UN resolution without occupying the country long-term? Which coalition country should be
Get in touch with your inner Dude with a round of Big Lebowski Monopoly. Click image for full size board. Thanks to Achiever JMH for sending.
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