Posts Tagged ‘mortgage applications’

There’s a Slow Train Coming

There’s a Slow Train Coming

Courtesy of John Mauldin, Thoughts from the Frontline Weekly Newsletter

Transparent clock and moving train (digital)

There’s a Slow Train Coming
A Negative 2% GDP in the Third Quarter?
Small Business Still Has Issues
Italy, Paris, Vancouver, and San Francisco
And a Forbes Cruise to Mexico

Sometimes I feel so low-down and disgusted
Can’t help but wonder what’s happenin’ to my companions,
Are they lost or are they found, have they counted the cost it’ll take to bring down
All their earthly principles they’re gonna have to abandon?
There’s a slow, slow train comin’ up around the bend.

- Bob Dylan

The question before the jury is a simple one, but the answer is complex. Is the US in a "V"-shaped recovery? Are we returning to the old normal? A great deal hinges on the answer, and this week we look at some of the evidence before us.

But first, a follow-up thought to last week’s letter. I wrote about why countries can reduce their private debt, reduce their public debt, or run a trade deficit, but not all three at the same time. If a country wants to see its government run a fiscal surplus (or small deficit) and at the same time its private citizens want to reduce their leverage (common desires throughout the developed world), it must run a trade surplus. That’s a simple accounting statement. If you did not read last week’s letter, you can get to it by going here.

That brings up the deepwater gusher in the Gulf. That it is an unmitigated disaster is an understatement. There is the possibility of the oil getting into the Gulf Stream and going around Florida and landing upon the Atlantic coast. We will be cleaning this up for years.

I am at the moment on a plane to Italy, but if memory serves me right, we run about a $300-billion-dollar trade deficit just in energy purchases. Our trade deficit has been coming down in most other categories but is fairly steady with respect to oil. And as noted above, if we want to get to a place where we are in control of our government deficit, we must reduce that trade deficit.

Oil can and graph with American dollar

Bluntly, we cannot hope…
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IS HOUSING ALREADY DOUBLE DIPPING?

IS HOUSING ALREADY DOUBLE DIPPING?

Courtesy of The Pragmatic Capitalist 

The market was ecstatic on Wednesday in anticipation of Friday’s big job’s report.  But while the market rallied 2.5%+ there was a potentially far more important story than the census driven job’s report: the real estate data.  While the data came in “better than expected”, primarily due to the end of the home buyers tax credit, there was an underlying red flag.  As the end of Spring buying season coincided with the tax credit the buyers have literally become non-existent in the housing market.  This was clear in the most recent mortgage applications data also released on Wednesday.  Diana Olick at CNBC has done a fantastic job covering the housing market.  She had the details yesterday:

“Mortgage applications to purchase a home began to sink. Now, four weeks later, mortgage purchase applications are down nearly 40 percent from a month ago to their lowest level since April of 1997. Yes, you can argue that a larger-than normal share of buyers today are all cash, but those are largely investors.

That means real organic buyers are exiting in droves.”

And she isn’t the only one noting the red flag.  In Thursday’s missive David Rosenberg also pointed to the plummeting mortgage applications:

The good news at least is that U.S. mortgage applications for refinancing purposes rose 2.4% during the May 28th week — the fourth increase in a row and while hardly a major boom that should cause any forecast shift and it does add a bit of coinage in household pocketbooks. But the big problem is with housing demand given that the homebuyer tax credits are behind us — mortgage applications for new purchases fell 4.1% and down for four weeks running. This is where the rubber meets the road for new home sales — a fresh 13-year low.

The year-on-year trend in purchases is -34% and that is compound off a late-May 2009 trend of -20%. How bad is that? And this is with mortgage rates at 4.83%? No doubt there are scars left over from the misery of being a homebuyer following the detonation of the last bubble and attitudes towards debt and housing have been altered semi-permanently.”

housing IS HOUSING ALREADY DOUBLE DIPPING?

Is the housing market already double dipping?  That certainly appears to be the case – and exactly on cue as the government steps aside.  While the mortgage applications are no guarantee…
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Mortgage Applications Plummet

Mortgage Applications Plummet

Courtesy of John Lounsbury writing at Credit Writedowns 

David Rosenberg, Chief Economist at Gluskin Scheff, has the following graph showing the dramatic drop in mortgage applications for home purchases in the most recent report from the Mortgage Bankers Association.

Upside-Down-V 

It is interesting to note that Rosenberg does not show an end date for the recession on his graphs.  Most optimists show an end date in the middle of 2009.  Most realists show an end late third quarter or early fourth quarter.  Rosenberg is clearly a pessimist about the economy.

The official end date for the recession will be determined by the NBER (National Bureau of Economic Research).  The determination often comes many months after the official date defined.  In other words, the end of the recession will be post-dated.  No date has been designated as yet. 

 


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Housing’s Still In The Woods

Housing’s Still In The Woods

Courtesy of Tom Lindmark at But Then What

home prices

Anyway you slice it or try and put a happy face on it, the news on housing over the past few days has been pretty sobering. I don’t take the decline in housing starts as all that bad a development, the last thing the markets need is more supply, but the decline in mortgage applications is significant.

The industry flacks tried to tie it to the uncertainty over the renewal of the tax credit. If that’s the case then we got a glimpse of where housing is going to be when we take the training wheels away. Maybe more to the point, a survey by the National Association of Realtors no less indicates that only 6% of the buyers cited the tax credit as the primary reason for buying a home.

In my opinion, the recent spurt in buying has been driven by low rates and cheap prices. Two pretty good reasons for people to buy. But here’s the kicker. Most of the activity has been at the low end fueled by investors and first time buyers. Two thin markets and nothing upon which a boom is going to be built.

I’ll throw in one more thing that’s driving this market. Irresponsible lending. Yup, the same thing that fueled the last spurt. At least this time it appears as if some of the buyers might recognize that this road leads to lots of grief. Don’t buy the argument. Check out this and this. At least FHA appears to be running out of wiggle room fast so the bailout shouldn’t be too drastic.

Put that together with the employment figures and it’s really hard to see how this little spurt is anything more than a blip. My guess is that aside from the investors it’s comprised of a group of people that were shut out by higher prices and jumped into the market at an opportune time but their numbers are limited.

I wouldn’t be at all surprised to see a lot of the recent investors throwing their purchases back on the market as rental rates have plummeted and the cash flow assumptions they used to justify their investments probably aren’t panning out. Prices for the low end have come back


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Phil's Favorites

Rogue science strikes again: The case of the first gene-edited babies

 

Rogue science strikes again: The case of the first gene-edited babies

Chinese scientists led by He Jiankui claimed they used CRISPR to modify human embryos that eventually were born as twin girls. AP Photo/Mark Schiefelbein

Courtesy of G. Owen Schaefer, National University of Singapore

The idea of scientists tinkering with the genes of babies was once the provenance of science fiction, but now it’s apparently entered the realm of reality: On Nov. 26, Chinese scientist He Jiankui reported the historic live births of ...



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Zero Hedge

Plastic Apocalypse: Dangerous Microplastics Invade Alps To Artic, Found In Fresh Snow

Courtesy of ZeroHedge

A new study has revealed that high levels of microplastics have been detected in some of the most remote regions of the world.

The discovery, published in the journal Science Advances, is the first international study on microplastics in snow, conducted by the Alfred Wegener Institute in Germany.

Melanie Bergmann, the lead scientist, and her team of researchers found microplastics from the Alps to the Arctic contained high levels of the plastic fragment, raises questions about the environmental and health implications of potential exposure to airborne plastics....



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Insider Scoop

Heavy Volume Drives Low-Float Stock Plus Therapeutics Up 200%

Courtesy of Benzinga

Plus Therapeutics Inc (NASDAQ: PSTV) is the latest and one of the most extreme recent examples of the powerful combination of low float and heavy trading volume.

Plus shares traded higher by more than 215% on Friday. The biotech stock more than tripled after the company reported ...



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Lee's Free Thinking

Long Term Stock Market Chart Perspective

Courtesy of Lee Adler

After a big day like yesterday, I like to get a little long term stock market chart perspective. (Yes, this stilted verbiage is for search engine optimization ).

We do that with a monthly bar chart, which I update when relevant in Lee Adler’s Technical Trader. That’s in addition to the regular daily bar/cycle charts covering the past year, and a weekly cycle chart covering the past 4 years.

I wrote on July 14, in reference to the price and indicator patterns on the weekly chart:

The market has overshot a 3-4 year cycle projection in terms of both price and time. There are no long term projections. A 4 year cycle high is ideally due now. A 4 ye...



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Kimble Charting Solutions

S&P About To Decline 14%, Catching Up With The Crude Oil Declines?

Courtesy of Chris Kimble

This chart looks at the performance of the S&P 500, Crude Oil and the Yield on the 10-Year note over the past 4-months.

Crude Oil has declined around 14% more than the S&P during this time frame. Yields have declined, even more, around 36%. The is a huge spread between these assets over this short of a time period.

A few importa...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

More from RTT Tv

Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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The Technical Traders

Global Central Banks Move To Keep The Party Rolling - Part III

Courtesy of Technical Traders

This section of our multi-part article regarding current and past central bank actions, we are going to attempt to look at key elements of the past and present to highlight what we believe may turn out to be an incredible “setup” in the global markets. 

This setup is almost like a complex chess game where two skilled players battle for control and near the end of the game, one player is left with the King, a Rook, and a Pawn while the other player has a dramatic advantage with stronger chess pieces.  Yet, as the game continues, the weaker player is able to remove one or two of the stronger players key pieces and move his pawn to his opponent’s side to r...



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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

Reminder: We're is available to chat with Members, comments are found below each post.

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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