What do oil prices and Clinton’s
campaign bills have in common? They’re both increasing dramatically.
According to the LA Times, Hilary Clinton's campaign debt has now soared to
nearly $31 million, including another $9.5 million in unpaid bills to vendors
this past month alone. And oil rose above $130 a barrel for the first time and
analysts expect them to keep rising. Goldman Sachs raised its forecast to $141
a barrel for the second half of the year, and T. Boone Pickens thinks $150 is
likely. This news is hitting stocks particularly hard.
Ben Bernake’s right hand man, Vice Chairman of the Fed
Donald Kohn, said that "monetary policy appears to be appropriately
calibrated for now to promote both rising employment and moderating inflation
over the medium term." He is optimistic about growth, but does not expect
it to be strong, with the wild card being the persistence of weakness in the
housing industry and its financial fall-out. Interestingly, he expects
commodity prices to decline later this year.
Banco Popular, based in Puerto Rico and E-LOAN’s
parent, announced “the Banco Popular Wholesale Mortgage Division will
suspend our current lending programs in California,
Arizona, Florida, and several other
states, effective May 20, 2008. With this decision, however, it is
necessary for Banco Popular to cease Wholesale Mortgage lending programs
in California and Arizona at this time. We
appreciate your ongoing support and interest you have shown in our
mortgage programs and we will continue to work with you to make dreams
happen.”
Impac Mortgage Holdings, who frankly I
thought was out of business already, said it lost $2.05 billion in 2007 and
more losses “could threaten the struggling lender's survival”.
Impac, a real estate investment trust with headquarters in Irvine CA
that specialized in "Alt-A" mortgages, said capital markets remain
illiquid and effectively closed to it. About one in seven loans on its books
were at least 60 days delinquent as of year's end, Impac said.
Taylor Bean further aligned themselves with
Freddie Mac by announcing that “effective immediately, any Conventional loan
with a FICO score of less than 620 must be underwritten using LP. Loans
underwritten using DU with FICO scores of less than 620 will not be eligible
for purchase by TB&W…any lender who has a loan with a FICO of less
than 620, but cannot run an LP on it, the loan can be sent to TB&W for
manual underwriting.”
Chief Executive Peter Raskind of National City Corp
said that it may sell "problem" assets or put some of them in
separate entities after large mortgage losses drove Ohio's largest bank to raise $7 billion of
capital. He said the bank could review "various forms of good bank/bad
bank structures" for troubled assets, including several billion dollars of
lower-quality mortgages it kept when it sold its First Franklin Financial Corp
subprime lending business to Merrill Lynch & Co in 2006.
He said it was still trying to sell over $5 billion of
non-prime home loans as of March 31st, after selling only $400
million in the first quarter!
Yesterday, mortgages and treasuries improved with the stock
market drop, and analysts continued to forecast more credit losses. With the
record oil prices, and a weakening US dollar, things are not looking great.
Last week mortgage company applications were -7.8%, with purchases -6.9% to the
lowest level in five years and refinances -8.7%. The only news out today is the
release the minutes of the April 29-30 FOMC meeting around 11AM PST. Market
participants will be looking for how Fed members voted during the last meeting
and any comments about inflation concerns in the economy. The goal is to form a
guess about what the Fed’s next move will be. Ahead of that, the 10-yr
continues in the low 3.80’s and mortgage prices are roughly unchanged.
It was entertainment night at the Senior Center.
Claude the hypnotist exclaimed: "I'm here to put you
into a trance; I intend to hypnotize each and every member of the
audience."
The excitement was almost electric as Claude withdrew a
beautiful antique pocket watch from his coat.
"I want you each to keep your eye on this antique watch
- it's a very special watch. It's been in my family for six generations."
He began to swing the watch gently back and forth while
quietly chanting, "Watch the watch, watch the watch, watch the
watch..."
The crowd became mesmerized as the watch swayed back and forth,
light gleaming off its polished surface Hundreds of pairs of eyes followed the
swaying watch when suddenly it slipped from the hypnotist's fingers and fell to
the floor, breaking into a hundred pieces.
"S---!" yelled the Hypnotist.
It took three days to clean up the Senior Center.
Rob
