Morning Report – mortgage business running at 2.5 million existing home sales level 8/19/13

Posted on August 19, 2013 by Brent Nyitray

Vital Statistics:

 

 

Last

Change

Percent

S&P Futures 

1653.4

2.7

0.12%

Eurostoxx Index

2837.6

1.8

0.06%

Oil (WTI)

107.1

0.2

0.21%

LIBOR

0.264

0.001

0.34%

US Dollar Index (DXY)

81.26

0.076

0.09%

10 Year Govt Bond Yield

2.86%

0.03%

 

Current Coupon Ginnie Mae TBA

103.03

-0.6

  

Current Coupon Fannie Mae TBA

102.9

-0.3

  

RPX Composite Real Estate Index

200.7

-0.2

  

BankRate 30 Year Fixed Rate Mortgage

4.52

    

 

Markets are stronger after yesterday’s bloodbath, although bonds are still having a tough go of it. There is no economic data this morning

 

This week looks to be pretty dull with respect to market-moving economic data, with the exception of the FOMC report this Wednesday. Market participants will be parsing the minutes closely to answer the “September or December” question. (Will the Fed start reducing QE purchases at the September FOMC meeting or the December FOMC meeting?) 

 

Interesting factoid: according to a Goldman Sachs survey, more than half of the homes sold in the United States last year, and so far this year, are all-cash transactions. When you consider the fact that existing home sales are running at around a 5 million / year rate and over half these sales are all cash, it shows that the mortgage business still has a lot of room to rebound. Pre-bubble, existing home sales were about 5 – 6 million units / year and peaked over 7 million at the height of the bubble. This says that the mortgage business is still in highly depressed territory. 

 

The Inspector General of FHFA is saying that the super-profitable Fannie Mae and Freddie Mac are ignoring billions in potential losses on overdue loans and they adopt a new accounting system. Of course, the GSEs are effectively nationalized and we all know government accounting does not comport with GAAP accounting. They are supposed to start writing down loans when they go 180 days delinquent. They aren’t.

 

President Obama is scheduled to meet with Ben Bernanke and other financial regulators to discuss the progress in implementing Dodd-Frank. So far, pretty much the CFPB is up and running and that is about it. Major issues remain unresolved as Dodd-Frank was drafted without any input from the financial industry. 

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This day in history – August 19

Posted on August 19, 2013 by ScottC

It’s going to be a brief one today….sorry.

1953 – The Iranian military, with the assistance of the CIA, overthrows Premier Mosaddeq and reinstates the Shah of Iran. The Shah, an ally of the US throughout the Cold War, will remain in power until the 1979 Iranian revolution. The 1953 coup and the US relationship with the Shah will be a primary motivating factor in the 1979 hostage crisis, when Iranian “students” storm the US embassy in Tehran and hold 52 Americans hostage for 444 days.

1951 – Eddie Gaedel, at 3 foot 7 inches the smallest person ever to “play” in a MLB game, makes his first and only career plate appearance for the St Louis Browns, taking a walk on 4 straight pitches and promptly being taken out for a pinch runner. Gaedel’s appearance was orchestrated by showman and owner Bill Veeck, who was famous for his unique efforts at trying to increase fan attendance.
gaedel

1942 – Amidst mounting pressure from Stalin to open a second front in the war, the Allies stage a raid on the French town of Dieppe, the first Allied attempt to attack German positions in mainland Europe. The raid, beset by all kinds of logistical and tactical problems, is a complete debacle, being turned back a mere 5 hours after it had begun, with over 60% of the troops being casualties or captured. Nevertheless, the lessons learned are held out by Churchill as being crucial to the later success of the invasion of Normandy on D-Day.

1812 – A naval battle between the USS Constitution and the Guerrière, a British frigate, breaks out off the coast of Nova Scotia. Surprisingly the Constitution gets the best of the 20-minute battle, inflicting serious damage while suffering very little itself. Witnesses to the battle later claim that the British cannon shots simply bounced off the sides of the Constitution, resulting in the eventually legendary ship being nicknamed “Old Ironsides”.

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