It was an impressive blip up from October to December. I can't explain it except by weather and the media campaign that housing bottomed.
Now, we are pretty much down to January-June levels.
Fundamentals point down. Major credit tightening is underway for all sub-650_score borrowers. I can't say how many of them there are, but enough to move home sales down to summer lows.
I'm not sure how this application index is counted. Can a person apply twice? What happens if application is denied?
I suppose application is counted when person paid the fee. But sometimes the fee is so small that it does not prevent to go somewhere else.
A number of media outlets jumped on the increase in mortgage applications in Nov/Dec as a sign of a housing bottom. Lot's of editorials in financial rags especially citing this. Let's see if jump on the new data too, or just quitely ignore them. I'm guessing for the most part it will be the latter.
Feb. 21 (Bloomberg) -- Denise Hamilton was earning the biggest salary of her life painting and packing refrigerator parts until Collis Inc. decided to shut its Evansville, Indiana, factory and she was fired.
Hamilton, 36, lost her $11.20-per-hour job last month because Collis's main customer, Whirlpool Corp., the world's largest appliance maker, cut production after a drop in home sales reduced demand for new refrigerators, washing machines and dishwashers. Whirlpool fired 500 workers at its Evansville plant and Collis fired 160, including Hamilton.
Working for Collis was the best job of my life,'' said Hamilton, a mother of two who lives on the outskirts of Evansville.Money is going to be tight.''
New and existing home sales dropped almost 10 percent last year, depressing demand for products from copper pipes to kitchen sinks and resulting in the loss of about 100,000 jobs in the U.S. Housing-related unemployment probably will increase in 2007, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts.
A slowdown in housing affects the purchases of everything, from furniture to kitchen sinks,'' said Feinseth, who last week downgraded his investment rating on Stanley Furniture tosell'' from ``buy.'' The stock has slumped 14 percent since August
For the first time in many moons, the fourth quarter was a time for slowing sales in the United States and booming sales everywhere else in the world,'' Caterpillar Chief Executive Officer James Owens said in a Feb. 15 interview.I think we will see that essentially be the pattern for 2007.''
While workers in appliance, furnace and furniture factories worry about their jobs, the rest of the labor market is showing strength, said Michael Darda, chief economist of MKM Partners LP in Greenwich, Connecticut. The U.S. unemployment rate was 4.6 percent in January, close to a five-year low of 4.4 percent in October, according to the Labor Department.
``There are certainly industries shedding jobs, but with the labor market as tight as it is, those workers will get reabsorbed into other parts of the economy,'' Darda said.
That's not much comfort for executives such as Caterpillar's Owens, whose U.S. sales are falling.
``My guess is it's going to get a little bit worse,'' Owens said.
The question is will the other employment hold up as wages drop or disappear.
you never know how much the weather plays a role in weekly, high-frequency reports like this. But the fact of the matter is, purchase demand has fallen in five out of the past seven weeks. Moreover, the index is now sitting at 381.4, its lowest level since the week of October 27. We set a cycle low that week of 375.6. And, as I posted and charted at my blog yesterday ...
... I'm seeing the "March of the Re-listers" in the existing home market. That would be the people who couldn't sell last year, pulled their homes from the market over the holidays, then started re-listing for the "blockbuster" spring selling season. Combine all these forces and I think we're looking at a subdued/weak housing and mortgage market this year.
First it was "Housing is down, but it won't impact the rest of the economy."
Then it was "Housing and autos are down, but it will not drag down the rest of the economy."
Now it's "Housing, autos, construction equipment, furniture, durable goods, and appliances are down, but it shouldn't spread into the rest of the economy."
Seems to me that the "rest of the economy" will soon be confined to the one BMW dealership in Beverly Hills that is still making sales.
Good one Godz.
It is like that with the basket of goods that comprise the CPI index too. That Picasso you bought last weekend is not in there.
There is no effort to follow the disparity of wealth as it affects the weightings in that basket of goods. Most glaringly, the OER is accepted as a proxy for housing costs even though it would be easy to adjust the "volatility" by post hoc means as is done with employment benchmark stats.
Because there is no effort to adjust, one can only presume that this is an ideological bias: your black velvet painting is a knockout but not compared to that growing pile of "investments" that are not counted.
The good folks in Wall street will be keeping demand up on 5th Avenue. I've seen an article or two about booming MY City real estate. No doubt employment in DC will be good also.
The News & Observer. Eagerness among mortgage lenders to increase their fee income pushes them to sell as many loans as possible, even ones they know borrowers cant afford, outgoing Federal Reserve Governor Susan Bies said. That is driving more people to fall behind on payments and default, she said.
Theres a real transaction-based mentality in the industry today that you didnt have 20 years ago, Bies said. To make a decision faster, and try to get the customer to say yes to you before they go and shop anywhere else, theyll waive terms.
From Inman News. Chris Flanagan, managing director and head of global research for JP Morgan Securities, said approximately 35 percent of all subprime mortgage borrowers could have a difficult time meeting their loan obligations when their adjustable-rate mortgages hit their first adjustment period.
These are consumers who were getting into 100 percent loans when home prices were softening, Flanagan said. The more troubling characteristic were the lenders willing to reach to make those mortgages available.
Flanagans research revealed that 10 percent to 15 percent of all new loans originated in the fourth quarter of 2005 and all of 2006 were subprime loans. The amount of money at stake could be $200 billion, with as many as 500,000 to 1 million consumers in potential jeopardy.
The Ann Arbor News reports from Michigan. A federal agency announced Monday it has assumed control of operations at Ann Arbor-based Huron River Area Credit Union. Regulators from the National Credit Union Administration, the independent federal agency that charters and supervises federal credit unions has taken over the credit unions management, placing it in conservatorship.
We found its been operating in an unsafe and unsound manner and is in imminent danger of insolvency, said Kathy Fagan, spokesperson for the Michigan Office of Financial and Insurance Services. This was something that came up suddenly.
A credit union is typically placed into conservatorship when its loan or investment portfolios are judged by regulators as too risky, putting the institutions viability in danger, said David Adams, chief executive officer of a trade association that represents credit unions, including Huron River.
Most often regulators are identifying problems well in advance of it being a crisis and I suspect thats whats happened here, said Adams.
Sreedhar Bharath, a professor of finance at University of Michigans Ross School of Business, speculated the move may be due to the actual or a
"=DJ Risky Slice Of ABX Index Widens Sharply On Novastar
2007-02-21 15:27 (New York)
By Aparajita Saha-Bubna
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--A benchmark index of derivatives of subprime mortgages
widened sharply to record weak levels Wednesday, fueled by a continuing spate
of bad news around loans to home buyers with shaky or inadequate credit
histories.
The riskiest BBB- portion of the current version of the ABX index, the
benchmark derivative index of subprime mortgages, widened to a 1100 basis
points as the cost of index protection soared. The index closed at 940 basis
points Tuesday.
The widening risk premiums is due to jitters around the fourth-quarter loss
posted Tuesday by mortgage lender NovaStar Financial Inc. (NFI), said Derrick
Wulf, a portfolio manager at Burlington, Vermont-based Dwight Asset Management
with $60 billion in assets under management."
It was an impressive blip up from October to December. I can't explain it except by weather and the media campaign that housing bottomed.
Now, we are pretty much down to January-June levels.
Fundamentals point down. Major credit tightening is underway for all sub-650_score borrowers. I can't say how many of them there are, but enough to move home sales down to summer lows.
I'm not sure how this application index is counted. Can a person apply twice? What happens if application is denied?
I suppose application is counted when person paid the fee. But sometimes the fee is so small that it does not prevent to go somewhere else.
Another weather report disguised as economic data?
I think we might have to wait until late March or so to start getting reliable information from the MBA index.
ac, we can get something before late March. March 6th is "pending home sales" date. It's a very good indicator for our purpose.
therox,
A number of media outlets jumped on the increase in mortgage applications in Nov/Dec as a sign of a housing bottom. Lot's of editorials in financial rags especially citing this. Let's see if jump on the new data too, or just quitely ignore them. I'm guessing for the most part it will be the latter.
Housing `Hangover' Kills Jobs as Spending Wanes; More Cuts Loom
Feb. 21 (Bloomberg) -- Denise Hamilton was earning the biggest salary of her life painting and packing refrigerator parts until Collis Inc. decided to shut its Evansville, Indiana, factory and she was fired.
Hamilton, 36, lost her $11.20-per-hour job last month because Collis's main customer, Whirlpool Corp., the world's largest appliance maker, cut production after a drop in home sales reduced demand for new refrigerators, washing machines and dishwashers. Whirlpool fired 500 workers at its Evansville plant and Collis fired 160, including Hamilton.
Working for Collis was the best job of my life,'' said Hamilton, a mother of two who lives on the outskirts of Evansville.Money is going to be tight.''
New and existing home sales dropped almost 10 percent last year, depressing demand for products from copper pipes to kitchen sinks and resulting in the loss of about 100,000 jobs in the U.S. Housing-related unemployment probably will increase in 2007, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts.
A slowdown in housing affects the purchases of everything, from furniture to kitchen sinks,'' said Feinseth, who last week downgraded his investment rating on Stanley Furniture tosell'' from ``buy.'' The stock has slumped 14 percent since August
For the first time in many moons, the fourth quarter was a time for slowing sales in the United States and booming sales everywhere else in the world,'' Caterpillar Chief Executive Officer James Owens said in a Feb. 15 interview.I think we will see that essentially be the pattern for 2007.''
While workers in appliance, furnace and furniture factories worry about their jobs, the rest of the labor market is showing strength, said Michael Darda, chief economist of MKM Partners LP in Greenwich, Connecticut. The U.S. unemployment rate was 4.6 percent in January, close to a five-year low of 4.4 percent in October, according to the Labor Department.
``There are certainly industries shedding jobs, but with the labor market as tight as it is, those workers will get reabsorbed into other parts of the economy,'' Darda said.
That's not much comfort for executives such as Caterpillar's Owens, whose U.S. sales are falling.
``My guess is it's going to get a little bit worse,'' Owens said.
The question is will the other employment hold up as wages drop or disappear.
you never know how much the weather plays a role in weekly, high-frequency reports like this. But the fact of the matter is, purchase demand has fallen in five out of the past seven weeks. Moreover, the index is now sitting at 381.4, its lowest level since the week of October 27. We set a cycle low that week of 375.6. And, as I posted and charted at my blog yesterday ...
Interest Rate Roundup
... I'm seeing the "March of the Re-listers" in the existing home market. That would be the people who couldn't sell last year, pulled their homes from the market over the holidays, then started re-listing for the "blockbuster" spring selling season. Combine all these forces and I think we're looking at a subdued/weak housing and mortgage market this year.
Vader,
First it was "Housing is down, but it won't impact the rest of the economy."
Then it was "Housing and autos are down, but it will not drag down the rest of the economy."
Now it's "Housing, autos, construction equipment, furniture, durable goods, and appliances are down, but it shouldn't spread into the rest of the economy."
Seems to me that the "rest of the economy" will soon be confined to the one BMW dealership in Beverly Hills that is still making sales.
Good one Godz.
It is like that with the basket of goods that comprise the CPI index too. That Picasso you bought last weekend is not in there.
There is no effort to follow the disparity of wealth as it affects the weightings in that basket of goods. Most glaringly, the OER is accepted as a proxy for housing costs even though it would be easy to adjust the "volatility" by post hoc means as is done with employment benchmark stats.
Because there is no effort to adjust, one can only presume that this is an ideological bias: your black velvet painting is a knockout but not compared to that growing pile of "investments" that are not counted.
Godzilla
The good folks in Wall street will be keeping demand up on 5th Avenue. I've seen an article or two about booming MY City real estate. No doubt employment in DC will be good also.
Summary from the Housing Bubble Blog
Some repeat, some new.
The News & Observer. Eagerness among mortgage lenders to increase their fee income pushes them to sell as many loans as possible, even ones they know borrowers cant afford, outgoing Federal Reserve Governor Susan Bies said. That is driving more people to fall behind on payments and default, she said.
Theres a real transaction-based mentality in the industry today that you didnt have 20 years ago, Bies said. To make a decision faster, and try to get the customer to say yes to you before they go and shop anywhere else, theyll waive terms.
From Inman News. Chris Flanagan, managing director and head of global research for JP Morgan Securities, said approximately 35 percent of all subprime mortgage borrowers could have a difficult time meeting their loan obligations when their adjustable-rate mortgages hit their first adjustment period.
These are consumers who were getting into 100 percent loans when home prices were softening, Flanagan said. The more troubling characteristic were the lenders willing to reach to make those mortgages available.
Flanagans research revealed that 10 percent to 15 percent of all new loans originated in the fourth quarter of 2005 and all of 2006 were subprime loans. The amount of money at stake could be $200 billion, with as many as 500,000 to 1 million consumers in potential jeopardy.
The Ann Arbor News reports from Michigan. A federal agency announced Monday it has assumed control of operations at Ann Arbor-based Huron River Area Credit Union. Regulators from the National Credit Union Administration, the independent federal agency that charters and supervises federal credit unions has taken over the credit unions management, placing it in conservatorship.
We found its been operating in an unsafe and unsound manner and is in imminent danger of insolvency, said Kathy Fagan, spokesperson for the Michigan Office of Financial and Insurance Services. This was something that came up suddenly.
A credit union is typically placed into conservatorship when its loan or investment portfolios are judged by regulators as too risky, putting the institutions viability in danger, said David Adams, chief executive officer of a trade association that represents credit unions, including Huron River.
Most often regulators are identifying problems well in advance of it being a crisis and I suspect thats whats happened here, said Adams.
Sreedhar Bharath, a professor of finance at University of Michigans Ross School of Business, speculated the move may be due to the actual or a
ABX blows out to a new high:
"=DJ Risky Slice Of ABX Index Widens Sharply On Novastar
2007-02-21 15:27 (New York)
By Aparajita Saha-Bubna
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--A benchmark index of derivatives of subprime mortgages
widened sharply to record weak levels Wednesday, fueled by a continuing spate
of bad news around loans to home buyers with shaky or inadequate credit
histories.
The riskiest BBB- portion of the current version of the ABX index, the
benchmark derivative index of subprime mortgages, widened to a 1100 basis
points as the cost of index protection soared. The index closed at 940 basis
points Tuesday.
The widening risk premiums is due to jitters around the fourth-quarter loss
posted Tuesday by mortgage lender NovaStar Financial Inc. (NFI), said Derrick
Wulf, a portfolio manager at Burlington, Vermont-based Dwight Asset Management
with $60 billion in assets under management."
Sorry, no public link