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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (28652)	3/15/2005 1:07:08 PM
From: CalculatedRisk	Read Replies (2) \| Respond to of 110194

For some interesting reading, I suggest the Fed's minutes from Dec '99: federalreserve.gov From this site: federalreserve.gov Look for the comments from Fed Economist Prell (he nailed it). I wonder what they are saying today.

To: Ramsey Su who wrote (28652)	3/16/2005 8:12:14 AM
From: russwinter	Read Replies (2) \| Respond to of 110194

The purchase index activity continues on unabated. All the tracking I'm doing on the key Bubble markets (also see Mish's blog on this) globaleconomicanalysis.blogspot.com shows that inventory is increasing, prices are stalling or are actually dropping, yet the buyers are still somewhat out in force. So clearly there is a group of speculators or long term homeowners who are trying to cash out, but they are being accommodated by the silly season crowd, even with these higher rates. I'm not exactly sure what the incentive is to refi with these higher rates? The ARMs as % of, is still a high 32.4%. This report says the ARMs interest rate dropped 24 bps, which of course makes one question the data here? I haven't seen anything like that on the sites I follow (CFC, Ditech, MER), mlcc.ml.com so maybe MBA is full of BS? From my perspective, I'm going to make a classic RW call, they appear to be a shill and canard, or incompetent. That's usually the choice nowadays, so once again we have unreliable information. The thread now needs to really shift into unbiased and critical truth patrol analysis, what's really happening out there now, not last year, but now? A few questions I have: there may be a wormhole with the 5 year ARM, and perhaps the IOs, but that doesn't really explain this. Pretty astonishing and counterintuitive really (hard to find credible, honest sources???), looks like a great "churning" quarter for real estate agents. WASHINGTON, D.C. (March 16, 2005)—The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 11. The Market Composite Index - a measure of mortgage loan application volume - was 727.6, an increase of 3.2 percent on a seasonally adjusted basis from 704.8 one week earlier. On an unadjusted basis, the Index increased 3.5 percent compared with last week but was down 33.4 percent compared with the same week one year earlier. The MBA seasonally adjusted Purchase Index increased by 2.5 percent to 462.8 from 451.7 the previous week whereas the seasonally adjusted Refinance Index increased by 4.2 percent to 2267.5 from 2176.8 one week earlier. The seasonally adjusted ARM Index increased by 9.6 percent to 5169.9 from 4717.3 the previous week. "The ARM Index increased almost 10 percent last week while fixed rates jumped almost a quarter of a point. The ARM Index is now at its highest level since mid-December 2004," said Michael Cevarr, MBA's director of member surveys" Other seasonally adjusted index activity included the Conventional Index, which decreased 0.7 percent to 1050.9 from 1058.2 the previous week. The Government Index decreased 1.4 percent to 127.3 from 129.1 the previous week. The refinance share of mortgage activity increased to 42.9 percent of total applications from 42.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 32.4 percent of total applications from 30.5 percent the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 5.91 percent from 5.69 percent one week earlier, with points remaining at 1.23 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.47 percent from 5.25 percent one week earlier, with points increasing to 1.24 from 1.22 (including the origination fee) for 80 percent LTV loans. The average contract interest rate for one-year ARMs decreased to 4.19 percent from 4.43 percent one week earlier, with points increasing to 1.00 from 0.95 (including the origination fee) for 80 percent LTV loans.