New home sales rose on a year-over-year basis, but the adjusted figures suggest that says more about softness in July 2013 than strength in July 2014. Whatever the case may actually be, the seasonally-adjusted rate of home sales has been quite disappointing after the “surge” post-winter. In fact, that bounce has been all but revised away, leaving what looks like [...]
There is so much about the repo market that gets lost in the minute details that are more often than not counterintuitive. It can sometimes be confusing as to why counterparties might be willing to pay you to borrow their cash, which is what a negative repo rate actually indicates. In that situation, which is what we are talking about [...]
While the credit markets were looking elsewhere these past few weeks, funding markets are again off their axis as repo fails spiked significantly one more time. The current level of fails is not quite that of June, but it is enough to engender some more pause about financial plumbing. For the most part, explanations have been offered on the supply [...]
The driving theme for credit markets for all of 2014 so far has been a rapid flattening in the treasury and funding curves that had not “wanted” to abate for any reason. Whether it was the short-lived infatuation with wage “inflation” or any of the contradictory and mushish assessments from any of the suits sitting at the FOMC, the curves [...]
It seems as if there is a little more complexity taking place in mortgage finance, and therefore the housing “market”, as the simplified idea of rates running the show isn’t holding water. On the surface, the general theme is one that contours to the outline of conventional mortgage interest as it ran through last year’s selloff. It stands to reason [...]
I have to say that I am more than a little amused by the “news” that the US Treasury Dept. is asking for comment from the primary dealers about the recent repo fails. As Bloomberg put it succinctly, “The Treasury also asked the dealers to explain the causes for an increase recently in “fails-to-deliver” in the market for U.S. government [...]
For my mind there are two actual explanations for tapering QE, neither of which follows the mainstream idea that the economy has gained sufficient “footing.” That provides the cover by which QE’s taper can be sold while preserving “credibility”, but it does not line up with anything else outside of the straightest line in the Establishment Survey. Instead, tapering is [...]
When home sales rose M/M (slightly) in April for the first time in 2014, the NAR theorized it as the turnaround signal. Their reasoning for it was strange in the context of basic, intuitive economics (meaning non-textbook). Rising prices on too few available homes for sale was supposed to signal more construction, as this shortage narrative was perhaps the only [...]
Mortgage rates have swung back to a 2-month high, a unfortunate concurrent timing to Janet Yellen’s recent assurance that the FOMC remains in full support of the mortgage market. Taper is not tightening to her, so the 53% decline in the monthly issuance of MBS and agency securities in February against May 2013 (before the taper word was released) must [...]
There has been a lot of discussion about the Chinese credit markets, and rightfully so, as unusual events are in the midst of probing “market” sensibilities as they relate to great imbalances. Along that line, this passage in a CNBC article caught my attention: Strict government controls, and the fact that state-owned companies own the bulk of government debt prevent [...]
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