As measured by GDP, the economy grew at 1.9% for the second quarter of this year, which was lower than the expectations for 2.3% growth. First quarter 2008 GDP was revised down from 1% to 0.9%, and Fourth quarter 2007 GDP was revised down from a gain of 0.6% to a loss of 0.2%. This
July 2008
“People need good lies. There are too many bad ones.” So chimed in Kurt Vonnegut. Many foreign investors feel cheated by the rating agencies, who gave their triple-A stamp to various mortgage securities that turned out to be anything but triple-A. COVERED BONDS OVERVIEW Are “covered bonds” the answer? Touted as a new way for
Yesterday, ADP, a provider of payroll services to more than 24 million Americans employed in the private sector, released their monthly jobs data which showed that the economy added 9000 jobs in July. The expectations were for a loss of 60,000 jobs. As we’ve discussed in previous months, they have missed the mark relative to
Indymac Bank made the biggest headlines recently, but so far in 2008, seven banks have failed and have been taken over by the FDIC. When this happens, the FDIC will guarantee $100,000 per account. But what if they run out of money? They insure $4.4 trillion in deposits and currently hold about $44 billion in
“Keep skunks and bankers at a distance.” So the saying goes. Hopefully that pertains to bankers and not mortgage bankers, not that bankers are bad! Speaking of mortgage bankers, the attached letter from the MBAA detailing the key points of the new Housing Bill will hopefully answer many questions that originators have. SECONDARY MARKETING QUIZ
The S&P Case Shiller May 2008 report of existing home sales showed record year-over-year 15.8% price declines averaged across 20 major cities (see table below). For the second straight month, all 20 MSAs posted annual declines, nine of which are posting record lows and 10 of which are in double-digits. Since August 2006, there has
A man was telling his neighbor in Sun City Center, “I just bought a new hearing aid. It cost me four thousand dollars, but its state of the art. It’s perfect.” “Really,” answered the neighbor. “What kind is it?” “Twelve thirty.” WAREHOUSE LINES FOR MORTGAGE BANKS Communication is important, and is downright critical for any
HR 3221, The Foreclosure Prevention Act of 2008, passed the House of Representatives Thursday, July 24 and passed the Senate Saturday, July 26 by majority votes—the president is expected to sign it into law this week. Below are highlights of the 694-page bill that are most relevant for consumers. No More $729,750 Conforming Loans As
Fixed and ARM rates are Rates are higher by .375% since this time last month as inflation has won the battle recently over economic weakness. June’s year-over-year Producer Price Index (including food and gas) increased 9.2%, the biggest YOY increase since June 1981. And June’s YOY Consumer Price Index (including food and gas), it was
Islamic finance firms help Muslim customers buy homes without compromising their religious principles. Islam forbids charging interest in the belief that it exploits people, but it allows making money off actual goods. Usually the home buyer purchases their home jointly with the “finance company”, and then pays rent and eventually buys the company out of
“Do not corner something that you know is meaner than you.” And is there anything meaner than me when I feel I was on the bad side of a trade? Last week I bought some Krispy Kreme stock for my daughter. This week it was lower! So I called Charles Schwab to complain, and ask
There’s a reason Larry Kudlow is a star on CNBC: he sparks debate by taking hard lines on market issues, or really any issues. Like last year during an entertainment industry riff when he declared that all rap music is misogyny and violence “up and down the line.” This example helps explain the problem with
What time of day am I most likely to have a heart attack? Answer, per a Harvard study, is that the most dangerous times for heart attack, and for all kinds of cardiovascular emergency, are the morning and during the last phase of sleep. The risk averaged 40% higher of having a heart attack between
The House approved a sweeping housing rescue bill today which the Senate will now review and then get to the president as soon as Friday. Below are some provisions of both versions that may or not make it through the final stages: Fannie and Freddie will have their loan limits permanently raised (expect somewhere between
Charles Plosser, Philadelphia Fed president and voting member of the Federal Open Market Committee that sets benchmark rates, has spoken publicly twice since CPI and PPI came out last week. He’s a well-known inflation hawk, having dissented on the April 30 quarter-point cut and the March 18 three-quarter point cut, and he voted on June
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