Upcoming Events

Event Calendar: Tuesday, May 29, 2012 Consumer Confidence @ 10:00 am ET Thursday, May 31, 2012 ADP Employment @ 8:30 am ET Thursday, May 31, 2012 Weekly Jobless Claims @ 8:30 am ET Thursday, May 31, 2012 Q1 GDP Second Estimate @ 8:30 am ET Friday, Jun 1, 2012 Employment @ 8:30 am ET Friday, Jun 1, 2012 Personal Income and Outlays @ 8:30 am ET Friday, Jun 1, 2012 PCE Core Inflation @ 8:30 am ET Friday, Jun 1, 2012 ISM Index @ 10:00 am ET Friday, Jun 1, 2012 Construction Spending @ 10:00 am ET

All Gains yesterday Lost today...

Mortgage bond prices remain higher this morning erasing the losses from yesterday afternoon and helping rates improve. MBS prices struggled late yesterday as stocks surged higher. The DOW closed up 126 points. This morning that looks to all reverse as euro zone debt fears had stock futures considerably lower. The DOW was down 139 points at PRICING this morning. Italy and Spain saw bond yields rise as the euro debt concerns continue. The European Commission's economic sentiment index slipped by 2.3 points, weaker than expected. Almost every country in the euro zone saw a decline which is a big concern considering Germany usually is the bright spot in the region. Flight to quality buying of US debt instruments resulted from the release. This is good news for US mortgage interest rates in the short term. However, expect more volatility as things play out. There is no data today but we have ADP employment, weekly jobless claims, and the employment report the latter portion of the week.

Traders work on the floor of the New York Stock Exchange Stock Futures Signal Higher Wall Street Open

Tuesday brings consumer confidence data before lenders set pricing. The bond market closed at 2:00 pm ET Friday and will be closed Monday in observance of the Memorial Day holiday. In addition bonds will not trade in the UK, Germany, France or Japan on Monday. Tell your floating borrowers that Tuesday is likely to be volatile (direction unknown) as trading resumes to normal and market players digest the news from Europe.

Memorial Day

Before we celebrate the unofficial start of summer, the summer beer drinking season, the first days at the beach, cookouts, family and friends, we need to pause and reflect on the reason for this long holiday weekend and remember those who served their country giving up their lives or part of their lives so the rest of us might have a weekend like the one that begins today. No words better embody the feeling for Memorial Day more than those of the Gettysburg Address. I send it to you all as I remember Memorial Day and the service of my Dad, John W Krawczyk, who served with the Calvary Division in the Vietnam War and all those others who gave so much to defend our country. Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. But, in a larger sense, we can not dedicate -- we can not consecrate -- we can not hallow -- this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain -- that this nation, under God, shall have a new birth of freedom -- and that government of the people, by the people, for the people, shall not perish from the earth.

Market update

Mortgage bond prices opened higher Friday morning erasing the small losses seen Thursday afternoon.

The only economic event on tap today is the University of Michigan consumer sentiment report set for release at 10:00 am ET.

Traders are now waiting for stocks to begin trade at 9:30 am ET. Dow futures are pointing to a flat opening for equities.

The bond market will close today at 2:00 pm ET today and be closed Monday in observance of the Memorial Day holiday. In addition bonds will not trade in the UK or Japan Monday. Tell your floating borrowers that Tuesday is likely to be volatile (direction unknown) as trading resumes to normal and market players digest the news from Europe.

A lesson in Economics 101

A decline in economic activity (GDP) increases unemployment and reduces tax receipts. This can easily become a vicious cycle. In times of economic weakness governments typically step up spending to help account for the decline in consumer consumption. This is what we are doing in the US and thus the mounting deficits. The euro zone countries do not have the privilege of printing money to prop up their economies. The trick for a government is to borrow as little money as possible to get GDP moving higher. Higher output from the economy leads to more tax receipts that ARE SUPPOSED to be used to pay back the loans taken out to jump-start the economy.

No News is good News

Mortgage bond prices opened lower Thursday morning adding to the losses seen Wednesday afternoon. Rates are under pressure from positive stock futures and no supporting headline news from Europe.

In news released at the open, weekly jobless claims printed at 370K and continuing claims, a summation of all receiving benefits, at 3,260K. Expectations were for initial claims to fall 5K to 365K and continuing claims to fall 15K to 3,250K.

Orders for durable goods rose 0.2% vs. the 0.3% increase analysts had expected.

The data released this morning was near expectations.

Traders are now waiting for stocks to begin trade at 9:30 am ET to help gauge interest rate direction. The Treasury will complete this week’s auctions with the sale of $29B of 7-year notes this afternoon.

Not too much changed in Europe overnight. Governments and banks are now openly talking of the mechanics of a Greek exit should that occur. If the objections from other member states to issuing Euro Bonds could be overcome, how exactly would the issuance take place, which country would be responsible in case of default etc? Europe is looking for plan B.

Give Feed Back, Make a difference

  

By now, I am sure you have already heard the news regarding the CFPB's latest proposals, especially regarding flat fee compensation instead of origination fees tied to a loan amont. (Read the NY Times article here).

What you probably have not read is the actual Small Business Review Panel Outline of Proposals and Alternatives. This is where NAMB needs your help. Please read the proposals and discussion questions and send us your feedback. If you care about your industry and livelihood, then you will help us formulate responses to work with the CFPB to promote consumer choice and protection withour destroying small business and competitive fair markets.

Your NAMB volunteers continue to fight the good fight, stay the course, and keep the faith. However, we cannot do this alone. We need more than a few thousand of the hundred thousand MLO's to participate.

Here are the proposals:

Latest CFPB Proposals for Small Business Panel

Questions for Small Business Panel

Now, give us your feedback. Please email us at governmentaffairs@namb.org.

We need your participation and support...get involved today. NAMB is a non-profit trade association made up of volunteers that are passionate about the preservation and promotion of consumer choice, small business, and the well-being of ALL mortgage industry professionals. We have been fighting for the mortgage industry since 1973....Join us in our efforts. Support YOUR Industry, Fight Back, Join NAMB Here   

Trouble in Greece...Again?

Mortgage bond prices remain higher mid-morning Wednesday adding to the gains seen Tuesday afternoon. Rates are finding support from weak stocks.

In news released this morning, new home sales stood at 343K vs. the expected 339K. That data was near expectations and had little effect on trade.

Traders will spend the day watching headline news and stocks as they wait for the results of the Treasury auction this afternoon. The Treasury will auction $35B of 5-year notes with results by 1:15 pm ET. Lets hope the 5’s go as well as the 2’s did yesterday. At the 10:00 am ET price point the Dow was down 66-points.

Europe: Global equity markets took a tumble after former Greek premier Lucas Papademos said it was possible that preparations were being made for Greece's exit from the euro. He spoke of the catastrophic consequences to both Greece and Europe should Greece either decide to leave the euro zone or be kicked out. His comments only confirm what others in the business world have been saying for months. Following the previous election in May, Greece was unable to form a collation government and will hold another election on June 17th. Here is the rub, if the anti-austerity groups win more seats in June, which currently appears likely, this would only further inflame the issue.

Mortgage bond prices opened lower Tuesday

Mortgage bond prices opened lower Tuesday morning adding to the small losses seen Monday afternoon. Rates are under pressure following a move by Fitch to downgrade Japan’s debt. The rating company cited “high and rising public debt ratios as the reason for the cut.

Traders are now waiting for stocks to begin trade at 9:30 am ET and for the release of existing home sales data set for 10:00 am ET. This afternoon the Treasury will auction $35B of 2-year notes. With the recent downdraft in rates, the yield paid to investors will be near all time lows. Traders will be watching this offering closely for overall and foreign interest. Auction results will be published by 1:15 pm ET.

In Europe The Organization for Economic Cooperation and Development (OECD) cut its forecast for growth in the euro zone for this year and next. They warned that unless political leaders take decisive actions the debt crisis could pull Europe into a vicious downward spiral. The organization sees the deep recessions in Spain and Italy removing 1.5% of output. Throw in Portugal with an expected decline of 3.2% and Greece at 5.3% and that all adds up to a lot of unemployed people.

Event Calendar:
Tuesday, May 22, 2012
Existing Home Sales @ 10 am ET

Tuesday, May 22, 2012
2-year Treasury Note Auction @ 1:15 pm ET

Petition to Amend the Dodd Frank Act

OK - it IS creating some reaction - go to http://www.change.org/petitions/petition-to-amend-the-dodd-frank-act AND SIGN THE PETITION TO AMEND DODD FRANK. As of this morning at 6AM there are 3,770 signatures - that is appraoching a number as large as the national trade association's membership. Then if you have questions about the petition or the amendments go to www.immaag.com and read. It only takes a few minutes. These signatures were obtained in 17 days - they grow hourly. Meeting are being scheduled in June with apporpriate congressional members and we now have signatures from every state and Puerto Rico. Failure to amend teh DFA is the assurance that the Bureau is forced to implement bad law. NAMB has been asked to join in the support. Not sure where they are on this. THIS IS NOT A MORTGAGE ISSUE. THERE ARE 193,000,000 MILLION PEOPLE >20 YRS OLD. THIS IS ABOUT ANYONE WHO WANTS TO OWN, BUY, SELL, RENT, INVEST IN OR REFINANCE REAL ESTATE. ITS ABOUT YOUR NEIGHBORS - GET 10 OF THEM TO JOIN YOU IN SIGNING, GET TEHM TO GET 10 AND HAVE THEM DO DO THAT. WE'LL HAVE 3.7MM. Don't be curious - help me create this tsunami! The swell has already begun. John Hudson - where is the promised response?

Change.org|How to Start a Petition

Mortgage bond prices remain near unchanged mid-morning Monday failing to erase the small losses seen Friday afternoon. Trade is quiet.

With no economic news set for release today traders will spend the day watching stocks and headline news to help gauge interest rate direction. At the 10:00 am ET price point the Dow was up 20-points. Of interest, Facebook is trading below the offering price of $38. Facebook trades on the NASDAQ.

Not too much news from the G8 over the weekend. The usual jabber jawing about Greece remaining in the Euro and the banking system is safe. However, the tone of the dialogue has changed somewhat from strict austerity and more pro-growth spending. German Chancellor Angela Merkel was under tremendous pressure to allow more spending in countries that are facing deep recessions. She was also pressured on the issue of Europe selling common bonds backed by stronger European countries.

Mortgage bond prices remain lower on the day erasing some of the gains from yesterday afternoon.

There was no data this morning but we are seeing a selloff from the recent highs this week which is not uncommon considering the positive streak.

Not only does Greece continue to make headlines but the fears are spread across the euro zone. Banks in Spain are seeing valuations plummet following the bank runs in Greece earlier in the week. Spain currently faces about a 25% unemployment rate, real estate woes, and debt problems.

There is no data Monday.