The big news of the day, besides more bank earnings, is that
a coach of a Texas
high school got fired after beating another team in basketball 100-0. The coach
would not apologize, since his girls played with honor and integrity (his
words) in beating Dallas
Academy, which has 8
girls on the team and only 20 in the entire school. The defeated school, by the
way, specializes in teaching students with short attention spans. If
you’ve already moved on to another paragraph, maybe you fall into this
category…
One of my goals in life is to have an index named after me
that can impact the market. Trilly Lundberg does surveys of gasoline station
prices. The University
of Michigan has some kind
of consumer sentiment survey. The S&P/Case-Shiller House Price Index came
out yesterday, -18.2% year over year. This was about as expected, but certainly
shows us that housing continues to be “in the tank”, and until that
begins to turn around, no broker should look for looser guidelines or much
investor interest in securities backed by mortgages.
Did your locks drop off a cliff last week?
You’re not alone, as they fell back to November levels. The Mortgage
Bankers Association said its mortgage application activity dropped almost 39%
in the week ended Jan. 23. Although lock desks everywhere are breathing a sigh
of relief, mortgage company owners are left
wondering if they should have outsourced underwriting and other operations work
instead of staffing up.
Today the big news for mortgage companies might be in the
release of Wells Fargo’s
earnings. Their earnings were obviously impacted by Wachovia’s
acquisition at $11.8 billion with no government support, and follow disappointing
earnings from BofA, Chase, and Citi. But it gave Wells operations in 39 states,
and created one heck of a large bank, and is expected to make money in the
years to come. Since then, Wells has estimated the credit loss due to
Wachovia’s loans at $60 billion! Wells made $2.8 billion for 2008, but
lost $2.55 billion in the 4th quarter due to the merger. Interestingly, the
market seems pleased with the steps that Wells took in meeting the Wachovia
issues, is not planning on asking
the government for additional money, and the stock is up this morning almost
20% in pre-market trading.
https://www.wellsfargo.com/pdf/press/4q08pr.pdf
Moving on, China remains on holiday through end of week, the
House votes on the $816 billion stimulus package today, and the Fed meeting
adjourns at 2:15 EST. Yesterday’s record $40 billion Treasury debt
auction saw decent demand which boosted treasury and mortgage prices on the
day, helping lead to some intra-day price changes. So far this morning the
10-yr is at 2.53% and mortgages are roughly unchanged from their improved price
yesterday afternoon.
After an exhaustive review of the research literature here
is the final word on nutrition and health:
1. Those in Japan eat very little fat and
suffer fewer heart attacks than us.
2. Those in Mexico eat a lot of fat and suffer
fewer heart attacks than us.
3. Those in China drink very little red wine and
suffer fewer heart attacks than us.
4. Those in Italy drink excessive amounts of
red wine and suffer fewer heart attacks than us.
5. Those in Germany drink beer and eat lots of
sausages and fats and suffer fewer heart attacks than us.
CONCLUSION:
Eat and drink whatever the heck you like. Speaking English is apparently
what kills you.
