Consumer Income, Spending, Inflation -Personal Income: Month-May 0.3% -Personal Income: Year-May 4.2% -Consumer Spending: Month-May 0.0% -Consumer Spending: Year-May 4.7% -Personal Savings Rate: Month-May 5.0% -All PCE price index: Month-May 0.2% -Core PCE price index: Month-May 0.3% -All PCE price index: Year-May 2.5% -Core PCE price index: Year-May 1.2% -PCE (Personal Consumption Expenditures) is inflation
June 2011
Some folks think that because the Federal Reserve will soon stop its daily purchases of Treasuries per Q2, Treasury prices will go down and yields and mortgage rates go up. I think this view is completely inaccurate. As QE2 ends, let’s to try to figure out what it did. Quantitative Easing-Round 2 was a $600
Last Saturday’s WeeklyBasis said rates should be even but could rise slightly on Greece debt crisis progress and Bernanke confirming a June 30 end to QE rate stimulus. Rates actually dropped slightly as Greece worries persist, Bernanke threw up his hands on the jobless conundrum, and weak economic data prevailed: 1.9% GDP for 1Q2011, weekly
As Bloomberg notes, loan modifications are still stumbling along (click pic). Besides mortgage industry colleagues I know who have chosen to specialize exclusively in loan modifications, no other sources I’m aware of are working for borrowers seeking loan modifications. And forget attorneys who’ve seen this problem as a money-maker. They don’t know the industry, and
CONFORMING RATES ($200,000 to $417,000) 0 POINT 30 Year: 4.5% (4.62% APR) FHA 30 Year: 4.25% (4.37% APR) 5/1 ARM: 3.0% (3.12% APR) SUPER-CONFORMING RATES ($417,001 to $729,750 cap by county) 0 POINT 30 Year: 4.625% (4.745% APR) FHA 30 Year: 4.375% (4.495% APR) 5/1 ARM: 3.375% (3.495% APR) JUMBO RATES ($729,751 to $2,00,000) 1
Snapshot below, click for details. Data highlights: U.S. consumer inflation, home prices, home sales pipeline, manufacturing. Additional rate market factors: Greece debt crisis and U.S. Treasury auctions ($35b 5yr and $29b 7yr).
GDP: – Final 1Q2011 1.9% vs. 3.1% for 4Q2010 – Imports up sharply, exports slowed – Consumer spending slowed, partly from slowdown in autos/parts – Government spending fell much more than in 4Q – Decline in federal spending (mainly defense) largest since 1Q2000 – Decline in state and local spending largest since 2Q1981 – Business
For the past 2.5 years, the Fed has run two rounds of rate stimulus known as quantitative easing (QE), which is bond buying to drive prices up and rates down. QE2 ends June 30, so here’s a chart recapping 30yr fixed rates from crisis peak to now. It’s labeled to show how QE1, QE2, and
Priceless video on pricey food culture. Legit music too. (hat tip JW)
Initial Jobless Claims – 429,000 for week ended June 18, up 9,000 from previous week – 4-week moving average 426,250, unchanged from previous week – Claims have been above 400,000 for the past 11 weeks – Job market remains extremely weak. Home Sales – May New Home Sales: 319,000 (annualized) – Down 2.1% since April,
[Editors Note: Rob Chrisman is on a cycling vacation this week so he’s asked some guest writers to step in on DailyBasis. Today are online lending pioneers Owen Raun & Michael Hillman.] Internet Lending Begins Just a little over fifteen years ago, with the publication of Statement of Policy 1996-1 in The Federal Register, Nick
– Profiles in Fed Cowardice (Krugman) – Near Term Market Movers (Patti Domm, CNBC) – QE2: Who Ended Up Benefitting? (SmartMoney) – Winklevoss Twins Give Up on Facebook Case (Mashable) – 10 Fees That Can Wreck retirement Savings (Marketwatch) – Economists Debate Mortgage Interest Deductibility (MortgageNewsDaily) – If Slowdown Is Temporary, When Will Data Flow
Jim Grant Says Everything Bernanke Avoided & Much More
Rates down slightly today after the Federal Open Market Committee (FOMC) kept overnight bank-to-bank Fed Funds Rates and Fed-to-bank Discount Rates unchanged at .25% and .75% respectively. They’ll keep rates low for an extended period, and QE2 will end as scheduled June 30. Below are key remarks on rates, jobs, mortgages, and home prices he
April FHFA Single Family Home Price Index: -Month/Month: 0.8%, first gain since May 2010 -Year/Year: -5.7% -Prices 19.3% below April 2007 peak -Prices roughly same as January 2004 –Full report tracks prices of homes with Fannie/Freddie loans Mortgage Applications: -Purchases Week/Week: -2.8% -Refinances Week/Week: -7.2% -Composite Index Week/Week: -5.9% FOMC: The FOMC rate policy decision
[Editors Note: Rob Chrisman is on a cycling vacation this week so he’s asked some guest writers to step in on DailyBasis. Today, we start with mortgage banking vet Steve Emory.] The press still talks about how loans with stated income or 100% financing were the root of our problems. But subprime has been gone
Load More