Marc's Mortgage Matter's

They've barely cleaned up the confetti from the Super Bowl parade, and already baseball's spring training is upon us. Here is something non-mortgage related, but a must-see for any baseball fan wanting to see how a baseball is manufactured: HowManyStitches? 
 

Since 2008, 335 banks have failed, and the FDIC found buyers for 93% of them. Only 22 were so undesirable that the FDIC couldn’t find any buyers and simply paid off the depositors. That’s actually a pretty good resolution record. When this mess is all behind us, people will write that Sheila Bair & Co. did a pretty good job.

Here are the major holders of U.S. Treasuries:

$5.3 trillion U.S. Federal Reserve	$511 billion State & local governments
$1.0 trillion China + Hong Kong	$511 billion United Kingdom
$877 billion Japan	$270 billion U.S. banks
$707 billion U.S. pension funds	$261 billion Insurance companies
$637 billion U.S. mutual funds	$210 billion Oil exporting countries

Here’s an idea for someone who wants to get elected President. Start an organization called “10,000 Parents United to Save the Future for our Children.” It would be 10,000 parents of kids under 18, and their sole proposal would be balancing the budget by postponing Social Security and Medicare by adding one month every year starting in 2013.

Instead of getting Medicare at 65, you’d have to wait till you were 65 + 1 month in 2013, 65 + 2 months in 2014 etc. and keep doing it until both programs were on solid ground. The 10,000 parents would be 5,000 Republican and 5,000 Democrats.
I’d expand it to “50,000 Parents United….” And then 100,000 etc. until I had an Organization named “One Million Parents United to Save the Future for our Children.” You’d challenge everyone running for Congress to publicly come out for it, and the punch line at the end of every speech would be, “We can disagree on everything else, but on this one issue, we’re all united and we’re all determined to get this passed into law. We’re all united to save the future for our children.”

There are slightly over 2,600 stocks on NASDAQ, many of them flashy tech companies, but can you guess which one had the best performance in 2010? It was boring, old Cost Plus, up 851%. If you don’t have one near you, Cost Plus sells cheap household stuff you don’t really need, things like wicker baskets and bamboo back-scratchers. It’s kind of a down-scale Pottery Barn which is a sort of a down-scale William s Sonoma. If you’d bought their stock in January of 2008, you’d have paid about $0.37 a share. It’s now around $10. If you’d invested $10,000 then, it would be worth $270,000 today. When investing, boring is often better.

Ben Bernanke insists we’re not going to have an inflation problem, but when it comes to commodity prices, well, prices are already going up.

There are a few commodities which have dropped, but not many. Eggs cost 10% less, and cottonseed meal (whatever that is) is 6% cheaper, but that’s about it.

Oil prices are in the mid-$80 per barrel range, and gasoline in many parts of the nation is sitting at or above $3 per gallon for regular unleaded. This is bad news for anyone who uses transportation, or buys goods that are transported. (Did I leave anyone out?) What do higher oil prices mean for folks in the loan biz? At this time higher oil prices appear to be indicative of higher demand caused by a recovering economy, which in theory will also eventually help the real estate market. In this sense, a strong market for oil is good news for the fortunes of real estate. Many will argue, however, that a) we still have the foreclosure and inventory overhand keeping a lid on values, and b) the higher oil prices will have a negative impact on consumer spending on other goods & services. So higher energy prices may be a result a stronger economy, but they can also slow an economy down, and in fact can contribute to higher inflation which can then cause higher rates, causing another drag upon economic growth.

Upward pressure for mortgage interest rates has been quite evident in the market over the past month as the average 30-year fixed-rate mortgage moved back to levels last seen back in May 2010. For this week at least, rates seem to have found a resting place from their upward climb, that being low 5's for a 30yr Fixed.

There are few things which would drive rates down appreciably at this point but a number which might cause upward pressure. For the moment, absent an employment report way above forecasts, we probably have simply found a new region for rates to wander around for a while.

It's a market holiday week next week, as Monday features President's Day. The four days which follow have a little bit of economic data due, including new and existing home sales, a GDP revision for the 4th quarter of 2010 and looks at consumer moods. There probably won't be anything to move interest rates seriously contained in those reports, and rates are most likely to be pretty flat next week, just as we were this one.

(True story.)
A middle age guy was walking to his car in a Target parking lot. A young lady in her early 20s is banging on her car key clicker. As he gets closer she is getting more and more frantic. The man walks to his car and looks over his shoulder. Now the girl is in a full panic. The man walks over and asks, "What's wrong?"
The young lady explains her key will not let her into her car and she's late for a job interview.
Dumbfounded he asks why she doesn't just use the key to open the car.
The young lady looks insulted and says, "I'm using the key but it will not work."
The man takes the key an inserts it into the key slot on the door and opens the car.
The young lady says, "Is that what that's for?"

And because we have President's day observed by 12% of the USA here's another.

Last night I was sitting on the sofa watching TV when I heard my wife's voice from the kitchen.
"What would you like for dinner my Love - chicken, beef, or fish?"
I said, "Thank you, I'll have chicken."
She replied "You're having soup. I was talking to the cat."