Economic Preview For The Week
In Joseph Heller’s “Catch-22”, Milo Minderbender sets up a syndicate for selling seven-cent Maltese eggs to the mess halls at a price of only five cents an egg while still making a profit. How? Seven-cent Maltese eggs cost the sellers in Malta four and one-quarter cents each to procure. Milo is actually buying the eggs from himself in Malta, which means that as a seller there he is making two and three-quarter cents each egg. After he resells the seven-cent eggs to the mess halls for five cents each, he is still making a three-quarter cent profit per egg. However, it turns out that Milo’s Maltese eggs are actually one-cent Sicilian eggs which he has secretly shipped to Malta to drive up their value, yielding him another three and one-quarter cents profit per egg. In short: in all these dealings, where Milo is the producer, consumer, and middleman (twice), he can afford a two cent per-egg loss, because overall the syndicate is making six cents revenue per egg. And everyone has a share. Bring back memories of High School Lit?
Economic Preview For Week
Overall, it is relatively quiet out there. Most of the attention is on the stock market, banking stocks in particular, as they continue to slide, although this morning rates are higher with the 10-yr back to 2.84% and mortgages worse by about .125. Anyone investing in banks now may either be accused of trying to catch a falling knife or looking like a genius. Fed Chairman Ben Bernanke’s semiannual testimony before Congress is on Tuesday and Wednesday, along with a $40 billion 2-yr auction, $32 billion 5-yr auction, and a $22 billion 7-yr auction. For economic news tomorrow we have February’s Consumer Confidence Index, brought to us by the folks at the Conference Board. Are you more willing to spend money now than you were a month ago? I didn’t think so, and it is expected to show a decline in confidence from 37.7 in January to 36.0 this month. Also tomorrow we have the S&P/Case Shiller Home Price Index, which never seems to have a “+” in front of it…
On Wednesday we have January’s Existing Home Sales, and on Thursday it’s sister New Home Sales. Also on Thursday we have Jobless Claims and January’s Durable Goods number, expected -2.3%. (We just had our dryer repaired rather than replaced, so I don’t expect any surprises.) Finishing the week we have the first of two revisions to the 4th Quarter GDP, expected -5.4%, the Chicago Purchasing Manager’s survey, and the University of Michigan’s revision to their Index of Consumer Sentiment for February, expected up slightly.
ING Wholesale Requires Buybacks
ING, who many brokers view as one of the last solid wholesalers, is rumored to be turning up the heat. I received this from one veteran broker: “I am in the process of going to court with ING for a loan which we originated two years ago, and the client defaulted. Based on ING broker agreement, under Paragraph 11 – Indemnification and Release: as a broker we are responsible for the loan if the client does not fulfill its obligation, no matter how long the timeframe…For any stated income loan completed by ING and then goes into foreclosure, ING is expecting the brokers to repurchase.” But on the other hand, I also received this: “If you don’t sell to ING you might look into them, since they have jumbo loans to $3M with rates in the low 5%’s – just nothing in TPO correspondent.”
Net Worth Requirements For Chase Mortgage Banks
As a correspondent, would you like a warehouse line from Chase? Please be sure to have a minimum net worth in your company of $5 million.
Daily Humor
Thank you Tina J –
A reporter was on the fluff assignment of covering the oldest person in the country’s birthday. He asked the guy, “To what do you attribute your longevity?”
The old man responded, “I have lived so long because I never argue.”
The reporter then, searching further, prodded, “But are you sure it’s not because of your diet, exercise, or good genes?”
The old man responded, “You know, you may be right.”