Today in History–September 5

1972 – Just before midnight, amidst the backdrop of the twentieth Olympic games, 9 Israeli Olympic athletes are massacred on the tarmac at the Munich airport after a botched rescue attempt turns into a firefight between their Palestinian captors and German security forces. The athletes, most of them members of the Israeli wrestling team, had been taken hostage (2 others were killed) by members of the terrorist organization Black September after the terrorists had sneaked into the Olympic Village and stormed the Israeli apartment complex in the early morning hours. After an initial demand for the release of some 230 prisoners held in Israeli prisons, a day of negotiations is played out in front of a worldwide television audience of millions. Eventually the attackers request a plane to take them to Cairo, a request ostensibly granted by German authorities, who prepare to ambush the attackers after transporting them to an air base in helicopters. The plan, to the extent there really was one, goes drastically awry when security forces posing as airplane attendants take it upon themselves to abort the mission, thus tipping off the terrorists to the trap. In the ensuing firefight, the terrorists turn their fire on the bound hostages in the helicopter, and then toss a grenade into it, incinerating anyone who was still alive.

1836 – Sam Houston is elected as the first president of the Republic of Texas. A year earlier Houston had been appointed to be a military commander of the Texas army during the nascent movement to establish Texas independence from Mexico. Under Houston’s leadership the Texas army had recovered from a disastrous defeat at the Alamo in early 1836, and had gone on to defeat the Mexican army, capturing its general Santa Anna in the process. Santa Anna was subsequently forced to sign an armistice granting Texas its independence. Houston actually gets elected as Texas’ president twice, serving from 1836-1838, and then again from 1841-1844. He would go on to serve as a Senator in the US congress after helping Texas gain admission as state in the US in 1845.
houston

1774 – In response to the passage of the Coercive Acts, more locally known as the Intolerable Acts, 56 delegates representing 12 of the 13 colonies (Georgia was unrepresented) gather in Philadelphia for the first ever session of the Continental Congress. It is the first formal act of unified opposition to British rule among the American colonies. The delegates, who will draft a declaration of rights and grievances to be sent to the King, include Patrick Henry, John Adams, and George Washington.
continetnal congress


Title added by Michi

Morning Report – Deeply underwater homes down 14.5% year over year 09/05/13

Vital Statistics:

Last Change Percent
S&P Futures 1655.4 2.0 0.12%
Eurostoxx Index 2764.4 6.1 0.22%
Oil (WTI) 107.8 0.6 0.56%
LIBOR 0.258 -0.001 -0.35%
US Dollar Index (DXY) 82.18 0.012 0.01%
10 Year Govt Bond Yield 2.92% 0.03%
Current Coupon Ginnie Mae TBA 103.1 -0.5
Current Coupon Fannie Mae TBA 102 -0.2
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.56
Markets are higher this morning after the ADP jobs report predicted 176 private sector jobs were created in August and initial jobless claims came in at 323k. Productivity was higher, while unit labor costs fell. Bonds and MBS are down small.
RealtyTrac is reporting that 10.7 million homeowners are deeply underwater (LTV > 125%), which represents 23% of properties with a mortgage. This number is down from 12.5 million (or 28%) a year ago. Another 8.3 million are in the 90 – 110 LTV range, and if real estate prices continue their recent appreciation, this could bring the supply / demand dynamics back into equilibrium as these homes gain equity and become available for sale. Lack of inventory has been a problem in the market and has been distorting some of the repeat-sales indices as professionals and cash buyers compete for the few homes that are available. Needless to say, this is welcome news for originators as it would boost purchase activity as refis dry up.
Washington Post has a quick and dirty on what a Summers Fed would look like. Punch line: not a lot different than a Bernanke Fed, at least as far as policy is concerned. So far, it looks like Summers is Obama’s first choice.
Yesterday’s Fed Beige Book didn’t have much new to say. Eight districts reported moderate growth while 5 reported modest growth. Residential real estate activity increased moderately, while lending activity was mixed. Lending standards were largely unchanged, while credit quality improved. Hiring and wages increased modestly.