Investors can’t afford not to keep a watchful eye on lending levels which have a direct impact on inflation with how much in reserves has been added to the banking system. Luckily for us, and the economy, consumers still aren’t willing to take on negative-carry debt to fund consumption spending. Can we get a big hell yeah? Read more…
In a phenomenon that couldn’t be more ill-timed, tens of billions in Alternative mortgages are due to be reset in 2010-2011. Though not sub-prime, many of these loans are interest-only, those in which the borrower makes no payments on principle. Once reset, borrowers could have monthly payments 15-20% higher than today. Read more…
Making the case that China is now in bubble mode doesn’t seem as ridiculous as it might prior to the global recession. In fact, I have been long Chinese stocks for years, mostly due to the huge export driven inflows of cash. However, as China’s economy becomes more consumptuous, particularly in real estate, it appears the country may be entering what may be difficult to exit—a huge real estate bubble. Read more…
It looks like a second stimulus package could be in the works. This time, the stimulus will come in at $100-150 billion, roughly 1/5 the cost of the first stimulus effort. Read more…
Dubai World, an investment arm of the United Arab Emirates, indicated on Friday that it would need as much as 6 months as an extension on its debt obligations. Though the market may have dipped on Friday, Dubai’s debt is little concern going forward. Read more…
Congress has extended the popular $8000 tax credit and opted to begin a new $6500 tax credit for home buyers who already own a new home. Here are all the details regarding who qualifies and who doesn’t. Read more…
Prior to this week the FDIC had closed just over100 banks. However after “FDIC Friday” nine banks shut their doors, mostly due to plunging real estate values in the western US that eroded the value of the collateral backing the loans. Read more…
As traders prepare for another bout of earnings, analysts are most focused on the banking sector. Strong stock returns since March 9 may help banks clear earnings season with a positive number, even as loan losses continue to grow. Read more…
You might think that a falling unemployment rate is a bad thing, but in actuality as unemployment dips and job losses continue, falling unemployment is TERRIBLE for the economy. Of course, like most indicators, much of the disparity comes from how we calculate the numbers. Read more…
This is something I am very familiar with. I’m looking to rent a home in my area, and I’ve been shopping around for a couple hours each day to find the home I want. Here’s a few tips for scoring that property at the price you want. Read more…
In today’s real estate market, sellers can’t afford to be choosers. If you’re a prospective first time home buyer or looking to grab some investment properties at bargain basement prices, there are a few tips to knock thousands off the price you pay. Read more…
Homeowners who are unable to sell their homes, or unwilling to lock in huge paper losses, have begun to trade homes with others. The trend, which is creating huge interest among cash strapped homeowners, involves finding another couple willing to make the housing switch. What was once a buying spree has now turned into a trading spree as some look to trade up while others trade down. Read more…
The American Recovery and Reinvestment Act of 2009 better known as the stimulus bill has a very interesting tax cut that is sure to fire up the real estate market. In the bill as drawn up American’s would receive up to a $15,000 tax credit for buying a home in 2009. I’ve dissected the bill and made it easier to follow than the full amendment. Read more…
We know what happened last time mortgages got too cheap, this time they’re even cheaper! After falling off the peak in October, interest rates have dropped for 9 straight weeks to fall to levels not seen since Freddie Mac started surveying lenders to find an aggregate rate for the 30 year fixed mortgage.
The 5.1% 30 year rate is pretty cheap but not as cheap as it could be considering the FED’s lax monetary policy this year. But one thing is certain, lower interest rates are indicative of more money in the banking system and banks wanting to lend. Banks have no option but to begin lending out the money TARP and the Treasury gave them, they’re so far behind on other loans its a deadly scheme to race back to par. Read more…
The Atom processor for Intel is flat out hot. After the MacBook Air set the precedent for smaller computing devices, the industry has been pumping out both small and light computers to meet the demands of consumers. The new laptops are nothing more than for surfing the web or word processing on the go but their low price points and seemingly high powered XP devices are catching on quickly. Read more…
Above is the RSI for the Monthly Dow chart with the RSI setting on 14. There is something very interesting in what we see here, the RSI reading for the monthly chart has never been this low other than three important dates, 1934, 1974, and now 2008. Read more…
There is still so much that must be answered on Bush’s latest call for a $700 Billion bailout package that will be used to clear the balance sheets of banking institutions and be eventually paid back. The problem is that it is doubtful the government will ever see even half of its total $700 Billion investment into the mortgage industry. Read more…
Pending home sales are off 6.8% since last July and it isn’t very hard to believe that they’ll continue to drop. The economic stimulus check may have put a boost in June numbers when people were more apt to be able to make down payments or have the financial ability to move. But as July came to a close, the number of pending homes dropped by 3.2% signaling weakness in a market that has certainly paid its dues over the past two years. Read more…
With stagflation just a definition away, the Fed is signaling that this next meeting will bring rate hikes to combat higher inflation. The Federal Reserve is now warming up its talking points to investors who are weary of inflation especially with the Federal Funds rate at 2%. Some input from the Federal Reserve Board might have merit, that even with a lower rate, the inability to get credit for most consumers is keeping inflation lower than what is expected. -
Freddie and Fannie Mae are huge. Together they hold $5 Trillion of US mortgages which equals roughly 50% of the US mortgage market. If these bankers prove to be insolvent, the United States will have a crisis on its hands in the form of 1970-80s style stagflation. To bail out these two banks, the national debt would have to adjust from $10 Trillion to $15 Trillion. Read more…
The worst part about this is that the 15.3% loss represents a hefty piece of American consumerism. Its now safe to suggest that people who purchased homes in the last few years have $0 in equity, and are even upside down on their homes. While this may seem to be a microeconomic situation, the macroeconomics are beginning to show through. People don’t have spending money nor do they have the HELOC to fall back on. Read more…
Washington Mutual announced today that Kerry Killinger will no longer serve dual role as chairman of the board and also as CEO. He will instead become a regular board member and retain his title as Chief Executive. The problem isn’t in the executive lineup or in the restructuring of “corporate governance” these loan companies are just trying to avoid pressure from average Joe investor and his opinion on subprime investments. Read more…
Poor timing, too low price points? No, it appears that Yahoo might be avoiding a Microsoft buyout solely for sentimental reasons. Now that Jerry Yang is the CEO, it appears he’s wanting to hold onto the company he worked so hard to start back in his own college years at Stanford.
Yang owns about 4% of the company that is currently worth $1.5 Billion, his stakes are huge and he’s still drawing the infamous $1 salary that is common with many tech giants. His wealth has been derived in its entirety from the growth and capital gains he’s received as a huge shareholder in Yahoo. As CEO and a founder, it seems that his own unwillingness to sell might lay in a dislike for Microsoft and sentimental views of Microsoft rather than what shareholders want. Read more…
Bonds, ETF, Forex, Futures and Commodities, Investing, Real Estate, Round Up, Stocks
Investment firms borrowed over $270 Billion dollars from the Federal Reserve last week for an average of just under $33 Billion per day. The Federal Reserve has practically opened its doors to banks who need the cash to calm liquidity concerns. The first week of the new program prompted about $100 Billion in loans, an amount that has nearly tripled over the course of one week. Banks raised their borrowing by nearly 7-fold as they trade worthless assets for more cash. The Federal Reserve now allows banks to use mortgage backed securities and other assets as collateral for new loans, even if the value of the collateral is much lower than its stated value. Read more…
That’s the new buzzword on the street. Bank of America which is hurting greatly from the subprime credit crunch, has proposed an offer to Congress, asking for the creation of the Federal Homeowner Preservation Corporation. Read more…
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