Monday April 17 2017 Housing and Economic stories

TOP STORIES:            

Americans are taking out the largest mortgages on record - (www.marketwatch.com) The Mortgage Bankers Association's weekly purchase loan data showed that the average size of a home loan was the largest in the history of its survey, which goes back to 1990. .. The 20% down payment is a relic: the median down payment in 2016 was 10%. For first-time buyers, it was 6%. First-timers and other buyers of less-expensive homes are more leveraged now than they were at the height of the housing bubble a decade ago. Home loan sizes aren't the only things that have changed in the years since MBA started its survey. Back at the start of the survey, the median mortgage size was only about 3.3 times the median annual income. It's now over five times as big - though buyers get bigger homes and lower interest rates.

Atlanta Fed GDPNow Forecast Spirals Toward Zero - (www.wolfstreet.com) I hope the model is wrong. The Atlanta Fed’s GDPNow model, which forecasts GDP growth in the US, dropped to 0.6% seasonally adjusted annualized GDP growth for the first quarter. This means, if economic growth at this rate continues for an entire year, the US economy would edge up only 0.6% for the year. As more data for the quarter is released, the model becomes a more accurate predictor of GDP growth, as measured in the first estimate for that quarter by the Bureau of Economic Analysis (BEA). So now the first quarter is over, and more data for the quarter is piling up, and the GDPNow forecast is spiraling down in direction of zero. The forecast dropped by half from April 4, when it was still 1.2%. I added the red arrow to the chart to show just how fast and how far it fell in the past seven weeks, from 2.5% to 0.6%:

US Credit Card Debt Rises Above $1 Trillion For The First Time In A Decade - (www.zerohedge.com) in February, following modest prior revisions, total revolving/credit card debt, has once again risen above the "nice round number" of $1 trillion for the first time since January 2007... Unlike last month's unexpectedly weak consumer credit report, which saw a plunge in revolving, or credit card, debt moments ago the Fed, in its latest G.19 release, announced that there were few surprises in the February report: Total revolving credit rose by $2.9 billion, undoing last month's $2.6 billion drop - the biggest since 2012 - while non-revolving credit increased by $12.3 billion, for a total increase in February consumer credit of $15.2 billion, roughly in line with the $15 billion expected. However, while in general the data was uneventful, there was one notable milestone: in February, following modest prior revisions, total revolving/credit card debt, has once again risen above the "nice round number" of $1 trillion for the first time since January 2007...

Draghi Struggles to Shut Down ECB Debate Weidmann Wants to Have - (www.bloomberg.com) Mario Draghi may have hoped to put an end to the bubbling debate on the European Central Bank’s exit strategy on Thursday. It didn’t take long for a reminder of how complicated this will be. Speaking in Frankfurt, the ECB president sought to quash the idea that policy makers will begin tightening policy sooner than planned and dispel doubts about the planned route to the eventual stimulus exit. Less than three hours later, Bundesbank President Jens Weidmann re-opened the issue, saying that a discussion on forward guidance is “legitimate.” The conflicting signals are exactly what executive board member Benoit Coeure warned about last week when he said public disagreements may hamper the effectiveness of policy. But credibility can be also hurt if the policy steer doesn’t evolve to reflect new economic conditions, he said.

Russian PM: "US on brink of military clash with Russia" - (www.apa.az) In a statement on Friday morning, Russian Prime Minister Dmitry Medvedev said that the US missile strike violated not only international, and added that the attack “was on the brink of military clashes with Russia”, Zero Hedge reported. “Instead of their much-publicized thesis about a joint fight with a common enemy, Islamic State, the Trump administration has proven that it will fiercely fight against the legal government of Syria,” Medvedev wrote on his Facebook page. Meanwhile, the International Committee of the Red Cross told Reuters that the situation in Syria "amounts to an international armed conflict" following U.S. missile strikes on a Syrian airbase.

OTHER STORIES:

Watch These Assets for Clues on Trade Policy as Trump Meets Xi - (www.bloomberg.com)
Gary Cohn Backs Breaking Up Big Banks - (www.wsj.com)
Not a Dot-Com Bubble, Not 2007, but a Nasty Mix of Both - (www.wsj.com)

Complacency and self-delusion: the most significant risk to markets — BIS economists - (www.ft.com)
Trump says 'something should happen' with Assad as U.S. weighs military options - (www.bloomberg.com)
China fighter plane spotted on South China Sea island: think tank - (www.reuters.com)