Consumer Squeeze is On Minyanville does a nice analysis, using the Star Wars Death Star garbage masher analogy, of the consumer conundrum--damned for credit, and damned if you save. Consumers are certainly being pinched at both ends as the US government keeps trying to unfreeze credit by driving down interest rates. The result? Lenders are getting more attractive rates by "borrowing" from consumers tax dollars, than bidding for their savings. Therefore, savings rates are down and lending is not … [Read more...]
Consumer Squeeze, Charlie Gasparino, Election Trades, FDIC Loan Modifications, Consumer Capitulation, Deflation/Reflation Whipsaw
October 31, 2008 By Leave a Comment
GDP, Mortgage Bonds, Zero Interest Policy, Renters for Obama, Stop Being Bearish
October 30, 2008 By Leave a Comment
GDP Swings Low, Sweet ... Well it is official, we're contracting. Consumers are hoarding their cash (taking queues from the banking sector). Unlike the recession of 2001 consumers will not be borrowing their way through hard time--try to find a home equity line of credit these days. They're calling it a recession: “This is the first of a run of negative G.D.P. numbers,” said Ian Shepherdson of High Frequency Economics. “The economy is in recession.” He predicted that the economy would shrink … [Read more...]
Fed Lowers Rate 0.5% to 1%, But is There More?
October 29, 2008 By Leave a Comment
Aaron Task presents a great Fed premonition. The Fed might not be done. In fact, it seems pretty clear they are locked into a recessionary outlook and few ideas for a short-term recovery. Recent policy actions, including today’s rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside … [Read more...]
Mortgage Rates, Misery Index, Foreclosures, Case Shiller, OPEC, Credit Default Swaps
October 29, 2008 By Leave a Comment
Mortgage Rates Rise as US Market Soars We get a big, even historic, upward bounce in the US stock market. Meanwhile mortgage rates are taking a negative bounce. The interesting part is that one of the stated US government bailout objectives was to preserve or even increase mortgage affordability. However, these same interventions into markets are causing precisely the opposite (possibly short-term) effect: With so much government debt guarantees in the bond market yield spreads between mortgage bonds … [Read more...]
Yields Spread Mortgage Rates Rise, Homebuilders Housing Fix, Soros on Denmark Mortgage Market, Your $700 Billion at Work
October 28, 2008 By Leave a Comment
Yields Spread and Mortgage Rates Rise Fannie, Freddie, and Ginnie mortgage bonds continue to pull away from US Treasuries. The difference between yields on Washington-based Fannie's current-coupon 30-year fixed-rate bonds and 10-year U.S. Treasuries rose about 21 basis points to 224 basis points as of 4:30 p.m. in New York, data compiled by Bloomberg show. That's up from 162 basis points, or 1.62 percentage point, on Oct. 20. "It is the deleveraging,'' Mohamed El-Erian, the co-chief executive officer … [Read more...]
Asian Markets Down, Where is the Bottom, Rethinking Capitalism, and JP Morgan Will Not Lend
October 27, 2008 By Leave a Comment
Asian Markets Take Another Dip Asian markets continue to tumble on real fears of global recession. Compounded by the already tightly intertwined system of banking and commercial equity positions. Much of these riskier equity positions, unlike US Banks are counted toward their regulatory capital requirements. This latest Asian market plunge is signalling another dangerous day on Wall Street. How many bullets can the market dodge? If we do get a real free fall what do you do? By the way don't overlook … [Read more...]
Weekend Notes
October 25, 2008 By Leave a Comment
Why loan modification plans have an uphill battle? Investors on Loan Modifications Here come the insurance bailouts Peter Lynch on finding/timing the market bottom Lindzon is shorting fluff--I think a lot of investors and CONSUMERS will be, we have been sufficiently shocked China sees opportunity to get superpower respect. In financial currency markets? Banking innovation slowly unwinding--back to brick and mortar? Next consumer credit crisis front--credit cards--the Mark Cuban plan Tracking … [Read more...]
OPEC, Pending Market Crash, Credit Cards, AIG Collapse, Keynesian?, Todd Carpenter for NAR Social Media
October 24, 2008 By Leave a Comment
OPEC Orders Cut in Production Just in case you had any doubt that we need immediate energy independence or have a Middle East that has the least bit of concern for the global economy--OPEC orders a cut in oil production. Is Russia the answer? Futures Off 6.5%, Watch for a Big Ride Today Asian and European markets tumbled overnight, 10 percent and 6 percent respectively and futures are showing 6.5 percent decline. The Big Picture wonders if we will trigger NYSE circuit breakers today. Credit Cards, … [Read more...]
Congress Gathering More Information on Mortgage Crisis
October 23, 2008 By Leave a Comment
Not sure all this testimony is going to make Congress any smarter, but it might keep them busy so they don't mess anything up worse: Former Federal Reserve Chairman Alan Greenspan's prepared statement FDIC Chairman Sheila Bair's prepared statement (Still amazes me that the most innovative, practical solutions are coming out of the FDIC) US Treasury Interim Secretary for Financial Stability Neel Kashkari's prepared statement … [Read more...]
Mortgage Meltdown Solved: Ma and Pa Kettle Math
October 23, 2008 By Leave a Comment
