ADP: 157k Jobs Lost In October, Official Jobs Report Friday, LIBOR Continues Down
There are definitely some clever folks out there. Check out these videos:
Original Budweiser “Wassup!” commercial (8 years ago)
Wassup commercial people 8 years later
And then there is this one
Treasury Bailout Update
I decided that my kids should start a “financial company”. This way, they may be able to take advantage of the Treasury Department’s consideration of using a portion of its $700 billion rescue fund to buy stakes in a broad range of financial companies, not just banks and insurers. The story I saw said, “People familiar with the matter say Treasury may scrap part of that early plan — purchasing assets through an auction process — and instead purchase some of these distressed assets directly.”
Mortgage Backed Securities Going Forward
The Securities Industry and Financial Markets Association (SIFMA) guidelines provide that 10- and 20-year MBS securities are considered “good delivery” against 15- and 30-year TBA-eligible trades, respectively. Accordingly, 10- and 20-year fully amortizing fixed-rate mortgage loans with a high-balance feature will have the same MBS and whole loan commitment eligibility as defined for 15- and 30-year FRMs. Beginning with January pools, these may have up to 10% of high-balance FRMs with mortgage note dates on or after October 1. Further information about clarifying the plan should be forthcoming in upcoming weeks.
ADP Shows 157k Jobs Lost
We had three pieces of information, in addition to the election results. The ADP employment report confirmed a very weak labor market, showing a loss of 157,000 jobs. (The survey doesn’t include government jobs, and is often a poor predictor of the actual unemployment numbers.)
Mortgage Applications Down 20%
Mortgage applications for last week showed a 20.3% decline, mostly blamed on higher rates. Refinances were down almost 30%.
Treasury Refinancing Activities
Lastly, the November refunding announcement came out at $55 billion: $25 billion of 3-yr, $20 billion of 10-yr, and $20 30-yr Treasury securities. This was pretty much as expected, but generally speaking increasing supply tends to push prices down and rates higher. The ISM Non-Manufacturing Composite for October comes out today and is expected to dip below 50 today. Did yesterday’s rally continue this morning, or was it a case of “buy the rumor, sell the news”? The 10-yr is around 3.73%, and 30-yr mortgage prices are a shade better than yesterday afternoon, but perhaps not more than the price changes that many investors put in yesterday. Worldwide, LIBOR rates continue down, helping credit markets, although the direct impact on 30-yr mortgage rates will be delayed. Still, it is a very good thing!
People Stop Contributing To Retirement Plans
Are you still contributing to your retirement plan? Congratulations! A new survey conducted by Opinion Research Corporation on behalf of TD AMERITRADE Holding Corporation found that financial strain due to the economic downturn was cited by half of those who say they have reduced or stopped contributing to their retirement plan. Unemployment (32%) and health care costs (25%) were also key factors cited as affecting respondents’ ability to contribute to their retirement plans, according to a press release. Of the 35% that said they have reduced their retirement plan contributions, 14% have cut their contributions back by 5% to 20%, and 6% have reduced their contributions by 21% or more. Only about half (54%) of Americans polled say they are currently invested in a retirement plan. Thirty-four percent of respondents say they currently have less than $50,000 in investable assets. Only 21% of those polled indicated they have $50,000 or more in investable assets.
Mortgage Insurance Guidelines
Radian announced rate and guideline changes that take effect on November 17th. They also published information on declining and stable markets. For example, “all MI loans will be required to meet Radian’s full underwriting guidelines regardless of the AUS response. There is a maximum DTI of 41% (with the following exceptions: Jumbo Conforming loans maximum DTI 45%, Loans with Temporary Buydowns maximum DTI 41%, Full Documentation Non-Prime loans maximum DTI 45%, etc.) Radian will no longer insure non-conforming loan amounts. Loan Amounts Exceeding $417,000 now require a DU Approve/Eligible or LP Accept/Eligible response (Jumbo Conforming only). They also narrowed guidelines for non-owner occupied homes, along with FICO scores for declining markets.
Daily Humor
A blonde is watching the news with her husband when the newscaster says “Two Brazilian men die in a skydiving accident.”
The blonde starts crying to her husband, sobbing, “That’s horrible!!! So many men dying that way!”
Confused, he says, “Yes dear, it is sad, but they were skydiving, and there is always that risk involved.”
After a few minutes, the blonde, still sobbing, says, “How many is a Brazilian?”