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Posted To: MBS CommentaryWhen you see the word " consolidation " in market analysis--especially with respect to movement in securities prices/yields--it might as well read "correction." Simply put, a consolidation is the diffusion of the volatility. Rates spike higher or lower. Market participation picks up significantly. Then the crowd disperses. That almost always involves an initial, instinctive move back in the direction from whence the original move came, and as we discussed this morning , past examples show the process can last 5 days before markets are free to go about their business. Bottom line, today was flat and tomorrow shouldn't be. MBS Pricing Snapshot Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. MBS FNMA...(read more)
Posted To: Mortgage Rate WatchMortgage rates had their single flattest day since October 2nd today. This is the polar opposite of last week's exceptional volatility. The most interesting thing about it is that this is the way rates typically respond to that kind of rapid movement. It goes something like this: one day, in particular, sticks out as utterly insane and the ensuing days get less and less insane until the insanity completely dries up. Last Wednesday was ground zero for insanity , and today there's none to be found. The second most interesting thing about that is that it usually results in the resumption of movement after days like today. History suggests that movement can be in either direction. That's good news for risk-takers inclined to float as it would minimize the losses incurred if markets move against...(read more)
Posted To: MND NewsWireFrank E. Nothaft and Leonard Kiefer, Freddie Mac's chief and deputy chief economists have come up with a formula for lifting the economy from its continuing low-growth status to a trajectory of robust sustainable growth. And that's what they are calling it, L.I.F.T. The acronym stands for Labor, Income, Fixed Investment, and Trust and in the current edition of the company's U.S. Economic and Housing Market Outlook they lay out the parameters for each. Labor The labor market must fully recover, providing solid employment gains, less long term unemployment, and broad-based income growth. Unless the labor market recovery accelerates, any improvement in the housing market will also lag. Last month the unemployment rate finally fell below 6 percent for the first time since the recovery began but...(read more)
Posted To: MBS CommentaryHere's a two-part chart that does a nice job of framing today's activity in both a longer and shorter term perspective. As you can see, we definitely had some bond-market-specific weakness this morning. Unfortunately for the sake of accurate analysis, the weakness occurred in close proximity to the Consumer Price Index (CPI) data. This logically resulted in media outlets pinning the weakness on CPI, but the two were completely unrelated . The factual culprit for this morning's weakness was a big corporate bond offering from Verizon. They did the same thing last fall and bond markets took a big, mysterious hit then too (though the past example was a much bigger deal than today's). Here's the coverage from last year's . The nice thing about weakness induced by corporate...(read more)
Posted To: Pipeline PressIf I was going to build a house, I'd want to make sure it was on the right lot. For some folks that doesn't work out so well - thanks to Ali F. for sending this in. As the MBA's conference wraps up today in Las Vegas without me finding the Segway rental desk, I am reminded that indeed the vast majority of people in the mortgage industry are truly interested in helping borrowers, or helping companies help borrowers, regardless of the city in which the convention is held. Speaking of cities, if you're in Fort Worth Friday, come say hello! I will be in Fort Worth Texas at Cendera Center (3600 Benbrook Hwy.) to talk about the conference and current trends with lenders out there - there are definitely some common themes. Join us for commentary at 1PM followed by a networking reception. Generally...(read more)