Income taxes are normally due on April 15th unless that date
falls on a Saturday or Sunday, in which case they are due on Monday the 16th or
17th. I have been told, however, that rule has recently been changed for this
and for at least the next 4 years, tax payments will not be due until you are
nominated for a cabinet position. Please check with your tax adviser to
confirm.
In related news, President Obama has announced a task force
to review the tax codes. He's concerned there are too many loopholes and too
many people manipulating the system to avoid paying taxes. And that's just in
his administration.
Many large companies have left the wholesale arena. Although
I am traveling this week with my daughter through the South East, I know that
in Northern California the wholesale
presence is still strong. Top companies still buying loans from brokers
include Union Bank, Provident, Wells Fargo, Guild, Countrywide, Flagstar,
Sierra Pacific, SunTrust, Citi, and Stearns Lending.
Will commercial real estate be the next shoe to drop? Or has it
already hit the ground? Those involved in commercial lending (apartment
buildings, office space, retail, etc.) are seeing that property values have
fallen as our economy has stalled, and the main sources for permanent debt
(Wall Street) are gone. One industry veteran told me, “The lenders who
remain can be very selective in underwriting and charge spreads that many
don’t want to accept. At this
point it seems that only through time will enough properties change hand at
lower debt levels that will allow for some equilibrium. This will
also push values down below what the market would have seen if credit was more
available.”
In a related event, S&P completed a loan-by-loan review
of commercial mortgages that were included in securities it rated. Standard
& Poors determined that the risk of losses on commercial mortgages has
sharply increased in recent months. "The economic recession combined
with the absence of readily accessible financing in the capital markets has, in
our opinion, skewed the credit risks related to the performance of (commercial
mortgage-backed securities) sharply to the downside, and in excess of what we
expected at origination or in our prior scenario analysis.” Based on the
review, S&P projects that securities originated between 2005 and 2007 will
perform the worst, with some potential lifetime losses on them rising above 10
percent.
AmTrust Mortgage reminded their clients that
“Fannie Mae, Freddie Mac, the Federal Housing Finance Agency (FHFA)
(formerly named OFHEO), and the New York Attorney General announced that they
entered into an Agreement on March 3, 2008, adopting the Home Valuation Code of
Conduct (HVCC)…As a result, AmTrust Mortgage Banking has established a
new appraisal process to be compliant with HVCC. Effective for loans registered
on or after 04.19.09, all table-funded transactions must order the appraisal
through the new Gemstone Appraisal Process.”
Looking way back to Thursday, rates shot up after three
days of improvement as speculation the economy is stabilizing reduced the
“flight to safety” appeal of government debt. Ten-year yields
rose the most in nearly a week ahead of the $18 billion 10-yr Treasury auction
on Thursday, which was on top of the already sold $41 billion. On top of that,
the equity markets had a big day after Wells Fargo made a preemptive earnings
announcement which ended up helping practically all the financial stocks. It
seems at this point that brokers and agents are telling their borrowers that it
is a mistake to wait for lower rates.
Unlike last week, and today, where there was little news to
move the markets, the remainder of this week is busy. Tomorrow we have
the Producer Price Index (PPI), expected +.2% for March, and Retail Sales for
March, expected to be -.1%. On the 15th we’ll see the Consumer
Price Index (CPI), which measures the price change for those finished goods
which are sold to consumers – it is expected to be +.2%. Also on
Wednesday we have the Empire Manufacturing survey, Industrial Production and
Capacity Utilization, and the Fed’s Beige Book (which really is beige).
The hits keep coming on Thursday with Housing Starts & Building Permits and
the Philadelphia Fed survey, along with the usual Jobless Claims. Finally on
Friday we have the Michigan Sentiment survey. Ahead of all this the 10-yr is
at 2.93% and mortgage prices are worse by about .125.
For punsters everywhere:
A small boy swallowed some coins and was taken to a
hospital. When his grandmother telephoned to ask how he was, a nurse said,
“No change yet.”
The man who survived mustard gas and pepper spray is now a
seasoned veteran….
In democracy it's your vote that counts. In feudalism it's
your count that votes….
When cannibals ate a missionary, they got a taste of
religion….
Don't join dangerous cults: Practice safe sects!
Rob
(For archived commentaries, check www.robchrisman.com,
or to subscribe write to rchrisman@robchrisman.com)
