May 2009
This week was the 22nd week of a mortgage bond purchase program by the Federal Reserve—here’s week 21. Beginning on May 28 and ending on June 3, the Fed bought $25.83b net of mortgage bonds—below is a table breaking down the amounts for each coupon and maturity across the three agencies that issue mortgages: Fannie
Preliminary 1Q2009 GDP came in today at -5.7%, and combine with 4Q2008 GDP of -6.3%, these two quarters represent the largest economic contraction since 1947—since then, the economy has never contracted by more than 4% for two consecutive quarters. There is one more reading due for 1Q2009: the ‘Final’ reading that follows today’s report comes
Rates Significantly Higher Past 2 Weeks A college girlfriend once told me, “The more I think of you, the less I think of you.” At first I thought that was pretty clever, but then it dawned on me what she was saying… The same goes for rates. These rates, relative to where they were two
Last night I heard my daughter saying her prayers. “Dear God, please send clothes for all those poor ladies in Daddy’s computer. Amen.” Analysis of Mortgage Bond Selloff and Rate Projections One trader said, “Mortgages are getting banged like a screen door in a hurricane.” I assume that he was talking about mortgages and bond
According to Bloomberg: Confidence among U.S. consumers jumped in May by the most in six years, fueling speculation the economy will recover later this year. The Conference Board’s sentiment index surged to 54.9, higher than forecast, according to figures from the New York- based research group today. Stocks climbed for the first time in five
Below is from Teodoro Wealth Report, a weekly produced by Marin County-based financial advisor Alex Teodoro: One key to an economic recovery is a thawing of the credit freeze. Let’s look at three indicators that suggest we’re making some progress in this area. First, the LIBOR is coming down. LIBOR stands for London InterBank Offered
The S&P Case Shiller March 2009 report of existing home sales showed year-over-year -18.7% price declines averaged across 20 major metropolitan areas (see table below), but for the past two months, declines didn’t set new YOY records. However, there was a 19.1% decline from 1Q2008 to 1Q2009, which is the largest decline in the history
Rates Rising On Economic Optimism, Jumbo-Conforming Spreads, Enough Writedowns-Now for Some Writeups
I was driving along the other day with my son and daughter, listening to the radio about yet another company that was laying-off employees. My son said, “The economy is so bad that McDonalds is now selling the ¼ ouncer, and parents in Beverly Hills fired their nannies and learned their children’s names.” Not to
Over the weekend my daughter and a friend had a lemonade stand on the street. They weren’t selling much lemonade for 50 cents a cup, so they decided to increase the price to 75 cents a cup. I told them that is not how economics works. My daughter replied, “The price of a postage stamp
This week was the 21st week of a mortgage bond purchase program by the Federal Reserve—here’s week 20. Beginning on May 21 and ending on May 27, the Fed bought $24.54b net of mortgage bonds—below is a table breaking down the amounts for each coupon and maturity across the three agencies that issue mortgages: Fannie
Fed Mortgage Rate Help Waning? Let it happen or make it happen, it’s up to you! Or, with mortgage rates, it is up to the Fed. The Fed’s buying mortgage-backed securities has kept mortgage rates low, right? And one way to attract private investors to buy mortgage securities is to make the yield attractive, right?
I noticed in the newspaper that this week marks the 54th anniversary of the invention of the credit card. I told my kids that before that, people practiced something called “living within their means” – a foolish, outmoded way of life. We’ve come a long way since then! The problem with an investment bank balance
My son was flipping through the channels last night and asked me, “Did you hear about the new giveaway on Oprah this week? Oprah gave everyone in her audience a free Chrysler dealership.” I told him to keep his day job. Quote on Bernanke’s Desk During the Civil War President Lincoln was being heavily criticized
This week was the twentieth week of a mortgage bond purchase program by the Federal Reserve—here’s week 19. Beginning on May 14 and ending on May 20, the Fed bought $24.68b net of mortgage bonds—below is a table breaking down the amounts for each coupon and maturity across the three agencies that issue mortgages: Fannie
What Can The Yield Curve Tell Us About The Economy? What is the yield curve, and why should anyone care about it? Yes, the stock market is rallying, in part because some corporate earnings are not as bad as expected, but also because many feel that the stock market “looks ahead” into future business patterns.
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