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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