Morning Report – FHFA weighs in on eminent domain 8/12/13

Posted on August 12, 2013 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1678.5 -7.7 -0.46%
Eurostoxx Index 2818.5 -7.1 -0.25%
Oil (WTI) 105.7 -0.3 -0.25%
LIBOR 0.265 0.000 0.00%
US Dollar Index (DXY) 81.5 0.370 0.46%
10 Year Govt Bond Yield 2.58% 0.00%  
Current Coupon Ginnie Mae TBA 105 0.1  
Current Coupon Fannie Mae TBA 104 0.1  
RPX Composite Real Estate Index 200.7 -0.2  
BankRate 30 Year Fixed Rate Mortgage 4.31    

 

Markets are weaker this morning after Japanese GDP came in lower than expected. There is no economic data this morning, but we will have a lot of it later this week. Bonds and MBS are up small on the risk-off trade.
 
This week will be relatively data-heavy, with inflation numbers (which matter again) and industrial data. We also get housing starts this week.
 
The Office of the Inspector General has releases a mid-point assessment of the HARP program. So far, 2.4 million borrowers have refinanced under HARP, while it has been estimated that 4 to 5 million were eligible. Overly-tight restrictions in the beginning account for the slow start. Also, the report cites a lack of awareness. FHFA intends to launch a nationwide public education campaign. 
 
Separately, FHFA weighed in on eminent domain. They threaten to direct the agencies to restrict or cease business activities within the jurisdictions of any state or local authority that uses eminent domain to restructure mortgage loan contracts. SIFMA has already said that loans coming from such jurisdictions would be ineligible for TBA trading. Now FHFA is saying they are uninsurable. That should end the discussion on the use of eminent domain. Of course FHFA nominee Mel Watt has refused to take a stand on the use of eminent domain, which is another reason why he is a long shot to take over FHFA.
 
MBA reported that applications for new home purchases increased 14% compared to the previous month. This is not a seasonally adjusted number. MBA estimates that sales of new single family homes were running at a seasonally adjusted annual rate of 481,000 in July.

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This day in history – August 12

Posted on August 12, 2013 by ScottC

1988 – Martin Scorcese’s film The Last Temptation of Christ is released. Based on a 1953 book of the same name, the film is hugely controversial for its departure from the Biblical account of Jesus’ life as told by the four gospels, and in particular a scene in which Jesus consummates his imagined marriage to Mary Magdelene. Sparking many protests, including some violence (most notably in France) several theater chains refuse to screen the film, and even after it is released on video, many video stores, including Blockbuster Video, will not carry it. Despite the controversy (or perhaps because of it) Scorsese receives an Academy Award nomination for Best Director.

1981 – IBM issues a press release announcing the introduction of its first ever personal computer. The IBM 5150 comes with 4.7 MHz CPU, 64k RAM, 0 MB fixed disk, and a floppy disk drive (remember floppy disks?!?!), and sells for about $3,000. By 2009, for the equivalent inflation adjusted price (roughly $7,000), you can get a 15,400 MHz CPU, 12,000,000 KB RAM, 5.5 million MP fixed disk, and a blue-ray DVD burner as a removable drive.

1978 – In a meaningless pre-season game between the New England Patriots and the Oakland Raiders, wide receiver Daryl Stingley is paralyzed from the neck down after getting hit by Jack Tatum when stretching for a pass on a cross pattern. The hit, which leaves Stingley unconscious on the field, broke his neck between the 4th and 5th cervical vertebrae, leaving him a quadriplegic for the rest of his life. Stingley died in 2007.
http://www.youtube.com/watch?v=a0vKO-sHZTY

1961 – On the night of August 12 and continuing into the morning hours of the next day, in an attempt to stop the flow of citizens to the west, East Germany begins stringing barbed wire and posting sentries at all points of entry into West Berlin from East Germany, completely isolating West Berlin. This marks the beginning of the building of what will come to be a classic symbol of the Cold War, the Berlin Wall. The Wall becomes the site of many iconic Cold War moments, including JFK’s “Ich bin ein Berliner” speech, Ronald Reagan’s “Tear down this wall” speech, and this classic photo of an East German border guard effecting his own escape:
east berlin escape

1944 – Joseph P. Kennedy, Jr., a Naval Aviator and son of former US ambassador to the United Kingdom Joseph Kennedy Sr., is killed over England when the bomb his plane is carrying detonates prematurely. Kennedy was being groomed by his father for a political career, with the White House being the ultimate goal. His death sets the stage for his younger brother, John, to become the standard bearer of Kennedy Sr.’s political ambitions.

1908 – The first production model of Henry Ford’s Model T automobile is produced. The Model T is the first automobile mass produced on an assembly line with interchangeable parts and marketed to the middle class. The first Model T sold for $850, the equivalent of approximately $20,000 today, and revolutionized transportation, making car travel accessible to the ordinary person for the first time.

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