June 2011

Rate Higher Fourth Straight Session

Rates are higher this week as mortgage bonds are in their fourth straight day of losses today, and have broken below a critical layer of support at the 200 day moving average. Rates rise when bond prices drop like this. Bonds are losing and stocks gaining on the following factors: (1) Greece passed budget cuts

Fundamentals 6/30: Weak Jobs, Better Manufacturing

Initial Jobless Claims – 428,000 for week ended June 25, down 1,000 from previous week – 4-week moving average 426,750, up 500 from previous week -Better than last week but worse than consensus. -Despite Keynesian spending and extremely accommodative monetary policy, the jobs market and the economy are still in bad shape. If we are

Linkage: U.S. Debt & Presidents Responsible

-First, Blame The Lenders (TheBigPicture) -Fed Bails Out The Banks Again (CreditSlips) -Bad Mortgages Weigh On Banks (WSJ’s Nick Timiraos) -15 Worst Housing Markets Next 5 Years (BusinessInsider) -TABLE: U.S. Debt & Presidents Responsible For It (TheTrader) -3 Mistakes Every Entrepreneur Can Learn From (VentureBeat) -89% View Homeownership As Part of American Dream (CalculatedRisk)

Implications Of $8.5b BofA Mortgage Settlement

Bank of America is near an $8.5b settlement with a group of non-agency investors on rep-and-warranty-related issues: 226 deals, of which 15 are re-REMICs. The remaining 211 deals have a current balance outstanding of $79 billion and original balance of $178 billion. As such, the $8.5b of settlement translates into 10.8% of the current balance

Fundamentals 6/29: Mixed Messages on Housing?

MBA Mortgage Applications -Purchase Index: Week/Week -3.0% -Refinance Index: Week/Week -2.6% -Composite Index: Week/Week -2.7% – This makes it a bit harder to disguise the error in yesterday’s media fiction that the housing market was looking good. On the other hand… NAR Pending Home Sales for May -Pending Home Sales Index: 88.8 -Pending Home Sales

Linkage: Realtime Greek Austerity Vote Tracker

-BofA’s $8.5b Bad Loan Settlement (Bloomberg) -INFOGRAPHIC: Forex Market Basics (TradingHabits) -China’s Top Auditor Warns of Local Gov’t Defaults (Mish) -REAL TIME GREEK AUSTERITY VOTE TRACKER (ZeroHedge) -QE3 Advocate Krugman Sits Down With HousingWire (HousingWire) -A Word On Unemployment (MarginalRevolution via TheMoneyIllusion)

Why rates are up past 2 days. All Greece Wednesday.

U.S. stocks rallied today (Dow +145.13, S&P +16.57) and bonds lost big (10yr note -91 bps, FNMA 4% -53 bps) as monthly U.S. home prices gained, and markets perceived progress on Greece’s vote to hike taxes and cut public pay as a condition of their next bailout payment. The budget vote is tomorrow and citizens

Fundamentals 6/28: Confidence, Home Prices, Retail Sales

Consumer Confidence Consumer Confidence as measured by the Conference Board fell to 58.5. This is a survey not hard data and all too often is associated with high visibility items such as gasoline prices. With Personal Spending flat (see comments of yesterday) and Final Sales of Domestic Products moved down to +0.6% (annualized) it certainly

Consumer Financial Protection Bureau Follows ZERO Consumers

Is it just me or is it insane that the Consumer Financial Protection Bureau follows zero people on Twitter? Maybe it’s due to lack of resources of an agency under fire since pre-inception, but still … it’s pretty overt disengagement from those you’re trying to represent. CFPB take note: the 5294 people following you so

Linkage: Home Prices Through 2015

-When Does Double Dip Become Just Another Recession (Bespoke) -The Debt Crisis Isn’t A Final Destination (Depew, Minyanville) -Low End Housing Sees Higher Losses (CNBC’s Diana Olick) -House Prices Through 2015 (KCM Blog via MacroMarkets) -10 Things Your Neighbors Won’t Tell You (SmartMoney) -China Property Bust Impact On Other Markets (Ritholtz)