Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1625.8 | -2.9 | -0.18% |
| Eurostoxx Index | 2768.2 | -16.5 | -0.59% |
| Oil (WTI) | 95.83 | -0.8 | -0.82% |
| LIBOR | 0.275 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 82 | 0.103 | 0.13% |
| 10 Year Govt Bond Yield | 1.79% | 0.02% | |
| Current Coupon Ginnie Mae TBA | 105.9 | 0.2 | |
| Current Coupon Fannie Mae TBA | 104.1 | 0.1 | |
| RPX Composite Real Estate Index | 195 | 0.3 | |
| BankRate 30 Year Fixed Rate Mortgage | 3.54 |
Markets are slightly weaker this morning. Initial Jobless Claims came in at 323,000, better than expected. Bonds and MBS are up small.
I was surprised by the magnitude of last Friday’s reaction to the jobs report and the persistence. The jobs report was good, but not great. I do not see anything in the report to prompt the Fed to end QE early. Perhaps the strength in the equity market is causing people to rotate out of stocks and into bonds. If you believe in technicals, you might be looking for the 10 year yield to do a 50% retracement, hit 1.85% and then bounce back.
Tonight is the Fannie / Fred MBS roll as we go from May to June. MBS prices will look like they just fell tomorrow morning, but it is just the roll.
Freddie Mac reported $4.6 billion in earnings in the first quarter, its second-largest in history. They required no Treasury draw and paid $5.8 billion to the government in Q1. So far, they have paid $29.6 billion. This is after Fannie Mae reported $7.6 billion in Q4. One almost certainty is that G-fees are going up. The government wants to “crowd in” private capital and price credit risk more in line with private mortgage insurers. The game for originators going forward may well be to stick with qualified mortgage (QM) loans and compete with the government on the guarantee fee. The other sense I got from the conference is that QM is not enough of a safe harbor to really encourage lending outside of the QM box. Which means that anyone with dinged credit is more or less stuck in the FHA box.
The sense I got from the MBA Secondary Conference is that despite the Obama Administration’s white paper that claims they would like to replace Fannie and Fred with some private entity, they are slow-walking reform. Certainly Mel Watt was not nominated to preside over the orderly dissolution of the GSEs. After the Administration changed the terms of the deal, the GSEs now just distribute all of their profits to the government, which has created a slush fund for general government purposes. And $13 billion a quarter isn’t chump change. I think at the end of the day, Fan and Fred are going nowhere and will stay on as quasi-nationalized entities until they are fully re-capitalized and then they will be sold.
The big questions regarding Mel Watt as the new FHFA Chairman concern principal mods and an extension of the HARP window (HARP 3.0). As of now, HARP eligibility does not extend to anything originated or refinanced after May 31, 2009. There is talk that the window might be extended to allow people who took out conforming loans in 2009 and 2010 to be HARP eligible. Also, there is talk of allowing people to “re-HARP.” Anyway we could see another refi boom if Watt is confirmed. Regarding the principal mods, CBO gave FHFA the ammunition to permit mods. If Watt is rejected, expect Mark Zandi to be the next guy nominated and he fully supports principal mods.
60-day delinquencies dropped to 4.56% according to Transunion, which is the fastest drop since they started keeping records in 1992. This decrease was higher than expected.
Filed under: Uncategorized |
All Things in Moderation 
Frank Bruni actually cracks a good joke:
@FrankBruni: Ted Cruz has reached that point where there’s a budding genre of journalism not just about him but about the fixation on him.
Why does he bother the left so much? I predict the Palinazation of him by years end.
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There’s money for police departments to go after drugs, but not for rescuing imprisoned and beaten women.
http://www.alternet.org/drugs/why-cops-bust-down-doors-medical-pot-growers-ignore-men-who-keep-naked-girls-leashes?paging=off
“The statistical demands of the drug war and the grants that come from the federal government — all they do is incentivize our local police to chase drugs and chase seizures so they can supplement their budgets,” Downing said. “We call that ‘policing for profit.’”
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That’s because crime is supposedly a local and state police function to control under our Constitution.
But the WAR ON DRUGS – the most wasteful lost cause of our time in America – is a grave national concern that REQUIRES local assistance and thus REQUIRES your Congresscritter to get drug enforcement bennies to her minions.
If it were not for the fact that outside CT most guns have been shipped in interstate or world commerce I would say the limited gun regulation I favor should be at the state level.
Once I was court appointed in Federal Court to defend a scuzbag indicted for being a convicted felon in possession of a firearm that had been shipped in interstate commerce – a federal crime. I tried it to a jury because I could not get a plea deal. He was a scuzbag and the USA wanted max sentencing b/c this was the only charge he could make stick. The gun appeared to be a Peacemaker.
The indictment read that the gun was manufactured in CT and found on the scuzbag in TX, necessarily implying interstate commerce.
The Peacemaker was the most copied gun in the world. Many knock-offs had been made in TX. I pinned my whole defense on that and the ATF witness for the gummint could not swear the gun was not made in TX after agreeing that my book reference on the weapon was recognized as authority by ATF.
Somehow, sensing impending defeat, the USA flew down an expert witness from Colt, just in time for them. As he was a surprise witness who had not been disclosed, the AUSA danced mighty hard to get the judge to put him on.
Outside the presence of the jury, the Judge allowed me to make a record. I got him to admit that the gun had NOT been made by Colt and was a knock-off. He even knew how many knock-offs were estimated to have been made in TX!
But unfortunately for the scuzbag, the expert was able to testify with certainty that the gun was made in MX.
The Judge called a conference and told the AUSA to cut me some slack if the scuz would plead guilty, b/c if the AUSA demanded the max he would not let the expert testify to the jury. And he told me to take the plea I had offered in negotiation or he WOULD allow the expert to testify.
We plead it out and released the jury.
This was before we had the sentencing guidelines, of course.
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Unintended consequences. Just needs more regulations is all.
http://www.thedailybeast.com/articles/2013/05/09/how-the-irs-wrecked-your-pension.html
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Sorry for the crudity, but there is no other way to say it…Elizabeth Warren is either a fucking idiot or an unconscionable charlatan.
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We need, nay, our very survival depends on future $100,000 art history BA’s! Grab a clue bat wingnut!
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Scott, it’s the latter I suspect. Between that and her support of Mel Watts, I have to confess on being duped when I was supporting her.
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jnc:
Scott, it’s the latter I suspect.
Probably. This kind of demagoguery, taking advantage of the average Joe’s ignorance of the technical workings of Fed operations, is just appalling. Reminds me of when Sheila Bair did the same thing last year. Shameful.
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Great story Mark.
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