Tuesday, January 13, 2015

Wednesday January 14 Housing and Economic stories

TOP STORIES:

Stocks Aren't Done Getting Crushed - (finance.yahoo.com)  You know the adage: If you're looking around a room and can't find the sucker, then the sucker is you. Main Street investors probably feel sucker-punched right about now, encouraged by the Dow's 1,000 point rip in just six days and Wall Street's echo chamber touting the strong seasonality of the "Santa Claus" rally — only to see that washed away in the worst start to a year since 2009. The Dow Jones Industrial Average is down more than 730 points from its high set on December 26. The reversal has been neck snapping: For the first time ever, the more than 90 percent of the S&P 500 components are below their 10-day moving averages, after more than 90 percent were above this level within the past week. Folks were not prepared: According to Jason Goepfert at SentimenTrader, individual investors have skewed their portfolio allocations toward stocks and away from the safety of cash on the largest scale since the dotcom peak in 2000. The latest data from the American Association of Individual Investors shows that people are holding nearly 54 percent more of their portfolio in stocks than in cash — one of the most extended measures of the past 30 years. The long-term average is 36 percent, for context.

The First Shale Casualty: WBH Energy Files For Bankruptcy; Many More Coming - (www.zerohedge.com)  "There are too many ugly balance sheets," warns one energy industry analyst, adding simply that "the group is not positioned for this downturn." While the mainstream media continues to chant the happy-clappy side of lower oil prices, spewing various 'statistics' about how the down-side of low oil prices is 'contained' and the huge colossal massive tax cut means 'everything is awesome' for America, the data - and now actions - do not bear this out. Macro data has done nothing but disappoint and now, we have the first casualty of the shale oil leverage debacle as WSJ reports, on Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money. There are many more to come... In December we illustrated the problem names (in the publicly traded markets) among the most-levered energy companies in America...

Are bond yields flashing a panic signal? - (www.cnbc.com) Government bond yields in the U.S., Europe and Japan are plumbing lows, suggesting a flight to safety, but analysts aren't ready to hit the panic button. "This is the first time ever that rates are this low, as even during the 1930s rates were well above current levels," Steven Englander, head of G-10 foreign-exchange strategy at Citigroup, said in a note this week, noting the average G-3 10-year government bond yield is below 1 percent. The 10-year U.S. Treasury yield was trading around 1.98 percent late Tuesday in the U.S. after starting the year around 2.17 percent. Germany's 10-year bund was around 0.47 percent, around all-time lows, after ending 2014 around 0.54 percent, while the Japanese government bond (JGB) was around 0.30 percent, a tad up from the record low 0.265 percent touched earlier this week. Bond prices move inversely to yields.

Obama to Cut FHA Mortgage Insurance Premiums to Boost Homeownership - (www.bloomberg.com) In an effort to expand homeownership among lower-income buyers, President Barack Obama plans to cut mortgage-insurance premiums charged by a government agency. The annual fees the Federal Housing Administration charges to guarantee mortgages will be cut by 0.5 percentage point, to 0.85 percent of the loan balance, Julian Castro, secretary of the Department of Housing and Urban Development, said today during a conference call with reporters. Under the new premium structure, FHA estimates that 2 million borrowers will be able to save an average of $900 annually over the next three years if they purchase or refinance homes. Shares of private insurers that compete with the FHA fell on the news, which Obama plans to discuss during a visit to Phoenix tomorrow. “We believe this is striking a very good balance between being fiscally responsible and also enhancing homeownership opportunities,” Castro said.

"Some Folks Are Buying Cars..." President Obama Explains Why Subprime Auto Loans Are Great For America - Live Feed  - (www.zerohedge.comThis should be good... On the same day as the administration pushes through 3% down FHA loans for some insane reason, President Obama is in Michigan to discuss the renaissance of the US Auto industry (or more correctly described- the rebirth of the subprime lending bubble)... As we noted previously, Americans need moar and will do anything for it... and as Steve Liesman says - credit is the briddge between work and play (or no work and moar play)... and is the backbone of America. What a sad joke!! Because many lenders make the loan based on an assessment of a used car’s resale value, not on a borrower’s ability to repay that money, many people find that they are struggling to keep up almost as soon as they drive off with the cash. As a result, roughly one in every six title-loan borrowers will have the car repossessed, according to an analysis of 561 title loans by the Center for Responsible Lending, a nonprofit in Durham, N.C.




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