All Encompassing Mortgage and Real Estate Thread

[Incredulity 11682]

2 hours ago, Texas Jeff said:

Money was cheaper than historic inflation rates. Why not buy something that will probably go up in value faster than you have to pay it back, while having others make the loan payments?

My question was rhetorical.  See above for my opinion.  Which syncs with your statement.

[victory88 5669]

For you mortgages guys, quick question.  I’m getting offered 100% financing physicians loan with no pmi at 7.49%.  Does that sound reasonable or should I shop around?  Just want to avoid more applications and paperwork if it’s the normal rate for these types of loans.  

[Neonmoon 38130]

6 hours ago, victory88 said:

For you mortgages guys, quick question.  I’m getting offered 100% financing physicians loan with no pmi at 7.49%.  Does that sound reasonable or should I shop around?  Just want to avoid more applications and paperwork if it’s the normal rate for these types of loans.  

Yes. Current 30 year fixed for 760+ credit with no points is around 6.99%. They are building the no PMI into the rate so 7.49% is reasonable. 

[Neonmoon 38130]

Commercial Real Estate is going to go through some things

https://www.wsj.com/real-estate/commercial/offices-around-america-hit-a-new-vacancy-record-166d98a5

[Incredulity 11682]

5 minutes ago, Neonmoon said:

Commercial Real Estate is going to go through some things

https://www.wsj.com/real-estate/commercial/offices-around-america-hit-a-new-vacancy-record-166d98a5

IMPO 19.6% is pretty generous if the rest of that graph is accurate.  There are a lot of companies riding out leases signed pre-pandemic that absolutely will not get renewed.

[LCHorn 2629]

10 hours ago, victory88 said:

For you mortgages guys, quick question.  I’m getting offered 100% financing physicians loan with no pmi at 7.49%.  Does that sound reasonable or should I shop around?  Just want to avoid more applications and paperwork if it’s the normal rate for these types of loans.  

Almost all of the physician loan programs not originated by depository banks have gone away and those that remain have been crippled (in other words, there’s a lot less competition or diversity of options for physicians than two years ago).  
 

The only real question you should be asking is if a physician loan is necessary-if you have the ability to qualify otherwise you can likely get the cost of financing below those terms.  If you need the 100% financing then it’s probably your only option.

[Storm the Field 5300]

1 hour ago, Neonmoon said:

Commercial Real Estate is going to go through some things

https://www.wsj.com/real-estate/commercial/offices-around-america-hit-a-new-vacancy-record-166d98a5

One thing I saw pointed out on this topic this morning: Too many old ass buildings still lingering around.

 

[smoothlonghorn 83]

Before people start pointing and laughing and since it is now out there publicly, loanDepot is currently experiencing a "cyber incident". Fun times/fml....

[Neonmoon 38130]

2 hours ago, smoothlonghorn said:

Before people start pointing and laughing and since it is now out there publicly, loanDepot is currently experiencing a "cyber incident". Fun times/fml....

Cyber like talking dirty online or something different?

[Vertuzzi 1378]

4 hours ago, Neonmoon said:

Commercial Real Estate is going to go through some things

https://www.wsj.com/real-estate/commercial/offices-around-america-hit-a-new-vacancy-record-166d98a5

Read in CoStar this morning about 300 W Adams St in the Business Loop of DT Chicago. Sold in 2012 for $51MM and just resold in late December 2023 for $4MM. It’s a fairly vintage property but thinking just the dirt alone in downtown Chicago would far exceed $4MM. 

[Neonmoon 38130]

17 minutes ago, Vertuzzi said:

Read in CoStar this morning about 300 W Adams St in the Business Loop of DT Chicago. Sold in 2012 for $51MM and just resold in late December 2023 for $4MM. It’s a fairly vintage property but thinking just the dirt alone in downtown Chicago would far exceed $4MM. 

It’s not just Chicago 

https://www.mercurynews.com/2023/12/27/la-office-building-sells-at-52-less-than-2018-price/

[LCHorn 2629]

10 minutes ago, Neonmoon said:

It’s not just Chicago 

https://www.mercurynews.com/2023/12/27/la-office-building-sells-at-52-less-than-2018-price/

This isn’t very charitable of me, but in Austin the commercial property bros have been living large compared to those of us in residential banking that have to actually earn our money.  I’m taking at least a little satisfaction they are getting to feel a small measure of our pain finally.  

[Vertuzzi 1378]

4 minutes ago, LCHorn said:

This isn’t very charitable of me, but in Austin the commercial property bros have been living large compared to those of us in residential banking that have to actually earn our money.  I’m taking at least a little satisfaction they are getting to feel a small measure of our pain finally.  

It was definitely a tough year on the CRE side. I hated having to essentially beg clients for deposits, something our group has never really had to do before. Lack of payoffs due to extensions being used really threw a wrench in our budget in 2023.  

[Gil Bang 25990]

Sounds like somebody's been eating some pussy.

 

 

 

National Association of Realtors President Tracy Kasper has resigned following a threat made against her, the trade group said Monday.

“Kasper informed NAR’s Leadership Team that she recently received a threat to disclose a past personal, non-financial matter unless she compromised her position at NAR,” NAR said in a written statement. “She refused to do so and instead reported the threat to law enforcement. Ms. Kasper felt that, in the circumstances, it was best for the organization that she step down. The Leadership Team is deeply concerned about any attempt to undermine its governance and, as a result, is taking steps to protect the integrity of the organization.”

Tracy Kasper

NAR did not disclose who made the threat or what specifically they intended to disclose in the blackmail attempt.

The scandal-plagued trade group appointed President-elect Kevin Sears to step into Kasper’s role effective immediately.

“As president and a long-time member of NAR, I always have put the interests of NAR first. As a result of the recent threat and given the significance of this moment for myself, my family and the organization, it is again time for me to put the interests of NAR first,” Kasper said in a statement. “So, it is with a mix of gratitude and a heavy heart that I submit my resignation as your president effective immediately. In doing so, it gives our Leadership Team the ability to take the reins and forge forward in effecting the change that we all have worked so hard over the past few months to begin. I know I leave our members, our staff and our association in good hands.”

Kasper, a Realtor from Idaho, stepped into the spotlight following the resignation of former NAR President Kenny Parcell, who quit amid a sexual harassment scandal at the 1.5 million-member trade group. Other departures include Bob Goldberg, the CEO, who left following the $5.3 billion verdict in the Sitzer-Burnett commission trial; and Donna Gland, who led human resources.

“While the NAR Accountability Project strongly believed it was time for a change in leadership at NAR, the circumstances surrounding Ms. Kasper’s resignation are of great concern,” said Jason Haber, an NAR critic who leads the activist group. “No one should be the victim of threats, intimidation or harassment.  If that happened to Ms. Kasper, that person should be prosecuted to the fullest extent under the law. ” 

[jimmyjazz 46055]

Man, I just KNEW I should have been hanging out more at Steiner Ranch REALTOR House back in my single days.  Furk.

[victory88 5669]

12 hours ago, LCHorn said:

Almost all of the physician loan programs not originated by depository banks have gone away and those that remain have been crippled (in other words, there’s a lot less competition or diversity of options for physicians than two years ago).  
 

The only real question you should be asking is if a physician loan is necessary-if you have the ability to qualify otherwise you can likely get the cost of financing below those terms.  If you need the 100% financing then it’s probably your only option.

I’ve got a conventional loan at 6.75% offer as well from the same bank.  The house we are looking at will be renovated hence why I was entertaining the physicians loan.  Use the cash to renovate instead of down payment.  Loan officer is telling me that he’s expecting rates to drop end of the year.  If we renovate the way we’d  like,  home value should go up 400-500k easily.  He’s saying we should have no problem refinancing  as we would have built in equity.  Any feedback?  

[LCHorn 2629]

8 hours ago, victory88 said:

Any feedback?

I think all of that sounds prudent.  Unless the loan is a Fannie Mae Homestyle loan (sounds like your budget is too high for that) pretty much any bank is found to require 20% down before doing any type of remodeling money additional to the purchase.  
 

[Storm the Field 5300]

On 11/2/2023 at 12:15 PM, Storm the Field said:

The majority of poll respondents indicate that their personal financial situation is good and that their local economy is doing well, but they think the national economy is the worst in history. 

Wanted to circle back to this discussion Wulaw and I had 2 months ago on a related topic.

Data out this morning showed Small Business Optimism Index for December hit its highest level of 2023. A deeper dive into the hard vs. soft data just further illustrates the stark divide between how Americans (in this case small business owners) rate their personal situation vs. how they view the national environment. 

 

 

The "hard" data is at a fairly strong level based on 40 years of data. Small business owners plan to add employees, add inventory, spend money expanding their businesses, and increase their earnings. The "soft" data (vibes) are at Great Recession levels, worse now than at the depths of COVID, though finally bouncing off the bottom. 

Additionally, and apologies if this is too CR, but I believe there's a glaringly obvious political bias to these numbers. Look at the massive uptick in the soft data reading basically on Inauguration Day 2017. I don't see a way of reading this other than that GOP-leaning small business owners report much more positive vibes about the economy with a Republican in office and assume things must eventually go to shit under a Democrat. 

[Wulaw Horn 19146]

1 hour ago, Storm the Field said:

Wanted to circle back to this discussion Wulaw and I had 2 months ago on a related topic.

Data out this morning showed Small Business Optimism Index for December hit its highest level of 2023. A deeper dive into the hard vs. soft data just further illustrates the stark divide between how Americans (in this case small business owners) rate their personal situation vs. how they view the national environment. 

 

 

The "hard" data is at a fairly strong level based on 40 years of data. Small business owners plan to add employees, add inventory, spend money expanding their businesses, and increase their earnings. The "soft" data (vibes) are at Great Recession levels, worse now than at the depths of COVID, though finally bouncing off the bottom. 

Additionally, and apologies if this is too CR, but I believe there's a glaringly obvious political bias to these numbers. Look at the massive uptick in the soft data reading basically on Inauguration Day 2017. I don't see a way of reading this other than that GOP-leaning small business owners report much more positive vibes about the economy with a Republican in office and assume things must eventually go to shit under a Democrat. 

From that same report hiring expectations are down 2% and plans to increase inventory fell 2 percent to -5 lowest since May and April respectively, and at 91 it's still under 100 and anything under 100 is considered contraction territory typically (I'm assuming that for this report- that's how it usually works- but there are so damn many if I goofed so be it). CPI comes out on Thursday and that will potentially be a big market mover in the MBS. 
MBS has whipsawed around this morning. Started off down 20, at one point in time was up 10, now we are down 15.  That 25 or 30 points swing might be worth 1/10 of a point on an interest rate for your home as a point of reference.  That's a big move for one morning- but I bet we get it back.  Still a nice downtrend over the last 6 weeks.    

[Storm the Field 5300]

1 minute ago, Wulaw Horn said:

 at 91 it's still under 100 and anything under 100 is considered contraction territory typically (I'm assuming that for this report- that's how it usually works- but there are so damn many if I goofed so be it). 

Dude, look at the chart. It has only rarely ever breached 100. You're assuming that it has been in contraction for 39.9 of the last 40 years?

[Wulaw Horn 19146]

5 minutes ago, Storm the Field said:

Dude, look at the chart. It has only rarely ever breached 100. You're assuming that it has been in contraction for 39.9 of the last 40 years?

Ever own a small business? I've owned 3. It's always in contraction and the world is always ready to fall apart. But there's also always an opportunity out there.  World's always ready to end- or make you rich.

  Most of them work like OPS plus or wRC+ with 100 (or sometimes 50) as baseline. Guess this one doesn't.  Thanks.

Googled- the 50 year average is 98- so off by 2 points.  This is the 24th something consecutive month below average.  I don't know how anyone can look at COVID and all the disruptions that have happened and say- nothing but blue sky ahead- this isn't at all scary.  Interesting times. 

Edited January 9 by Wulaw Horn

[StassneyHorn 6624]

Acknowledge you were wrong about job revisions being lowered for 10 months straight.

Accept that revised numbers still beat expectations.

Then click on this link and see how 2021 shorted job growth in initial reports 11 out of first 12 months. Because it happens.

https://www.bls.gov/web/empsit/cesnaicsrev.htm

[jimmyjazz 46055]

2 hours ago, StassneyHorn said:

Acknowledge you were wrong about job revisions being lowered for 10 months straight.

You new here?

[StassneyHorn 6624]

It’s one thing to pretend he hasn’t seen the posts and hang his hat on some eventual “you’re on my ignore list” reply, but it’s been quoted by enough people for his eyes to see and he still radio silent.

[Wulaw Horn 19146]

holy fucking shit was I wrong. I said 9 or 10 in a row (because that’s what I read from the people I pay for data analyzed on that I share here for free)and we’ve only been revised down (at least) 12 of the last 13 months. Could be more as the chart only January-November of 23 and December and January were revised down. Aren’t I an idiot. This totally and completely fundamentally changes the entire point! 
From Schwab:  

Revisionist history

Specific to the downward revisions to the monthly change in nonfarm payrolls, through November of 2023, all but one month experienced downward revisions, as shown below.

Sea of downward revisions

[Neonmoon 38130]

I would assume the market has access to the same information?

[StassneyHorn 6624]

1 hour ago, Wulaw Horn said:

holy fucking shit was I wrong. I said 9 or 10 in a row (because that’s what I read from the people I pay for data analyzed on that I share here for free)and we’ve only been revised down (at least) 12 of the last 13 months. Could be more as the chart only January-November of 23 and December and January were revised down. Aren’t I an idiot. This totally and completely fundamentally changes the entire point! 
From Schwab:  

Revisionist history

Specific to the downward revisions to the monthly change in nonfarm payrolls, through November of 2023, all but one month experienced downward revisions, as shown below.

Sea of downward revisions

Thanks for admitting 4 is not 10. Feel free to look at other historical times, sorry 2 years ago, where it went the exact opposite way.

Still not a peep about the 312,000 beat on expectations even after the revisions. That’s what I wanted, stop edging me.

Here is a free link to that information you pay for

https://www.bls.gov/web/empsit/cesnaicsrev.htm

Edited January 10 by StassneyHorn

[Storm the Field 5300]

And here's the chart for 2022, when revisions were positive 9/12 months, including AN UNBELIEVABLE 7 in a row to end the year. Total revisions to the upside of +311K.

If anything, it looks like BLS overcorrected in 2023 after consistently undershooting for the majority of 2022. That's the whole purpose of the revisions, to attempt to give a more accurate estimate after additional time and data.

I won't even charge a fraction of whatever you pay Schwab for this easily obtainable, free data.

Edited January 10 by Storm the Field

[StassneyHorn 6624]

Under-reporting the 2021 BLS revisions is the real WTF. 1.9 million jobs that got lost from media coverage. 


 

[Wulaw Horn 19146]

17 minutes ago, Storm the Field said:

And here's the chart for 2022, when revisions were positive 9/12 months, including AN UNBELIEVABLE 7 in a row to end the year. Total revisions to the upside of +311K.

If anything, it looks like BLS overcorrected in 2023 after consistently undershooting for the majority of 2022. That's the whole purpose of the revisions, to attempt to give a more accurate estimate after additional time and data.

I won't even charge a fraction of whatever you pay Schwab for this easily obtainable, free data.

Schwab isn’t who I pay for the data. That’s the first google link that I found. I pay for live data access with immediate analysis. Lots of people do. I post that here sometimes when something is particularly interesting or noteworthy for free as a quick synopsis because you cant link or copy/paste. For they get something wrong occasionally when immediately reacting to a report and say 10 in a row when it’s 10 out of 11?  Sure. Do I occasionally misread a data point when I’m transposing or summarizing? I’m sure it’s happened. Today I assumed 100 when looking further it was 98. The basic and broad strokes shit is still the same if the details are slightly wrong occasionally. 
Nobody has a crystal ball or knows what tomorrow will bring and that certainly includes me. The jobs numbers being overstated every single month in 2023 (except 1 for the literalist dolts) was very bad for the market. The headlines are blared into a megaphone while the back end corrections are stage whispered to the side. The headline numbers for jobs and inflation set the tone for the entire month (along with Fed meetings and comments- which don’t happen every month). when they are constantly wrong and overstated for the entire lousy year and your livelihood depends on it- yeah it’s something that warrants comment. 
yeah/ maybe they missed in an over correction. Whatever the reason is it seems pretty obvious that it’s a kiss and there’s something wrong with the initial data. 

[Gil Bang 25990]

So, 5 or 6 years ago, a friend of the GF called me.  Her mom lived in a mobile home and couldn't afford to stay in the park any longer.   The daughter is marred to a fat, lazy, tub of shit, she cannot or will not help mom.  I meet with mom, sell the mobile home (for the highest price ever in that park) and mom cashes out and ends up in a shitty board and care home. 

When mom moves out, daughter wants none of her shit because it's junk.  Mom takes a few things to the board and care, I arrange for an estate sale that generates a few-hundred bucks, and the rest gets donated. 

Mom died this past week, so daughter and fat tub of shit husband go to the board and care and collect everything that mom had there, and move it to a storage unit.  So, these ignorant fucks are paying who knows what to store shit that they never cared about in the first place.  Probably a 24 inch TCL TV and a few personal items.   Idiots.

[Neonmoon 38130]

CPI higher than expected. Rat farts

 

 

[Wulaw Horn 19146]

15 minutes ago, Neonmoon said:

CPI higher than expected. Rat farts

 

 

We are ok. Mbs still up 15 bips for the day. Stripping out food and shelter which is the dorks favorite measure hit expectations, down 1/10th from last month. Market was up 20 in anticipation, lost 18 bips immediately and now back up 15. My guess is we finish the day slightly up or even. 
if report would have been better then expected I think we were primed to have a HUGE day and start a real rally. I bet this means trading sideways for a while. Which, isn’t bad. Keep the market more orderly. 

[Neonmoon 38130]

3 minutes ago, Wulaw Horn said:

We are ok. Mbs still up 15 bips for the day. Stripping out food and shelter which is the dorks favorite measure hit expectations, down 1/10th from last month. Market was up 20 in anticipation, lost 18 bips immediately and now back up 15. My guess is we finish the day slightly up or even. 
if report would have been better then expected I think we were primed to have a HUGE day and start a real rally. I bet this means trading sideways for a while. Which, isn’t bad. Keep the market more orderly. 

But I wanted a HUGE rally / veruca salt voice

 

[Wulaw Horn 19146]

Ha. Rollercoaster. We got all the way up to 27. Then jobs number comes out and it’s 202k. Ew claimed when they’d expected 210k. From up 27 to down 25 in 30 seconds. Now back to 5. Whew!  50 point swing in the last 5 minutes now sitting at the middle. 

1 minute ago, Neonmoon said:

But I wanted a HUGE rally / veruca salt voice

 

I get it. I want one in March. Stair step down instead of elevator. Better for industry and order. 

[KYHorn 17134]

An economist I subscribe to provided some additional info on the jobs revisions and commercial real estate issues in relation to the likelihood of a recession in 2024. He includes links to sources and additional readings that are also helpful. I'll try to spoiler judiciously:

Many labor economists also are concerned that job openings data, which remain elevated versus pre-pandemic levels, aren’t accurate, and that both the string of downward revisions to the jobs figures (all but one month in 2023) and recent declines in labor force participation indicate a cooler labor market than may first appear. For you data nerds, part of the problem is the “complete disconnect” between the payroll survey (where we get the topline jobs number) and the household survey (unemployment rate and participation). The latter is looking much more pessimistic than the former:

Spoiler

Other data give more reasons for pause: The Institute for Supply Management surveys of services and manufacturing managers have gotten much more pessimistic (see below); workers are quitting much less often (typically what happens as recessions approach); and employers are hiring less, too.

None of this means that a big crash or even a mild recession is imminent (and I still tend to side with the Soft Landing Crowd), but it does mean that we should probably hold off on turning Jay Powell’s birthday into a national holiday—at least just yet.

What Will Happen to Commercial Real Estate and the Banks Supporting It?

Another reason to pause the soft-landing parade is also another big thing I’m watching closely in 2024: the commercial real estate market. As the Wall Street Journal just reported, in fact, almost 20 percent of major metro office space was vacant at the end of 2023—a new record dating back to the late 1970s:

Much of this is, as we’ve discussed (and podcasted), driven by remote work, housing costs, and other quality-of-life issues. Yet contrary to what you might think, the hardest hit commercial real estate markets today aren’t in expensive coastal metros like San Francisco, D.C., or New York (which have certainly struggled, too). They’re mainly in the South (“the three major U.S. cities with the country’s highest office-vacancy rates are Houston, Dallas and Austin, Texas”) where the aforementioned post-pandemic issues fuel fires already burning from earlier decades of commercial overbuilding and where they make a big turnaround less likely. As one real estate pro explained, “The bulk of the vacant space are buildings that were built in the 1950s, ’60s, ’70s and ’80s”—and good luck getting that space rented in today’s still-strong remote work environment.

Converting these properties to much-needed residential housing could help with this problem (especially since older properties are typically easier to convert), and conversions are popping up around the country. But not all properties can be converted, and the ones that can likely need two big things: 1) buy-in from local regulators and voters (to revise building codes, zoning rules, and other regulations—see this new paper for a glimpse at the regulatory burden commercial properties face); and 2) a big haircut from current owners to make the conversion numbers work without massive government subsidies. Here’s one recent example of types of price cuts that may be needed: Spoiler This haircut is where the recession linkage may come in. While the U.S. commercial real estate market alone (probably) isn’t big enough to start a recession, a new paper provides an eye-opening look at how current commercial weakness could infect the U.S. banking sector (emphasis mine): Using loan-level data we find that after recent declines in property values following higher interest rates and adoption of hybrid working patterns about 14% of all loans and 44% of office loans appear to be in a “negative equity” where their current property values are less than the outstanding loan balances. Additionally, around one-third of all loans and the majority of office loans may encounter substantial cash flow problems and refinancing challenges. A 10% (20%) default rate on CRE loans—a range close to what one saw in the Great Recession on the lower end—would result in about $80 ($160) billion of additional bank losses. If CRE loan distress would manifest itself early in 2022 when interest rates were low, not a single bank would fail, even under our most pessimistic scenario. However, after more than $2 trillion decline in banks’ asset values following the monetary tightening of 2022, additional 231 (482) banks with aggregate assets of $1 trillion ($1.4 trillion) would have their marked to market value of assets below the face value of all their non-equity liabilities. To assess the risk of solvency bank runs induced by higher rates and credit losses, we expand the Uninsured Depositors Run Risk (UDRR) financial stability measure developed by Jiang et al. (2023) where we incorporate the impact of credit losses into the market-to-market asset calculation, along with the effects of higher interest rates. Our analysis, reflecting market conditions up to 2023:Q3, reveals that CRE distress can induce anywhere from dozens to over 300 mainly smaller regional banks joining the ranks of banks at risk of solvency runs. Numerous media reports show pressures at regional banks with substantial exposure to the commercial real estate market, and bigger banks face similar (albeit smaller) risks: “Commercial property, and in particular mortgages on less-full office buildings, had been one of the biggest factors pushing up problem debts.” As the New York Times reported earlier this year, moreover, “In its annual report released last week, the Financial Stability Oversight Council — a watchdog created in the wake of the 2008 banking crisis — called commercial real estate the biggest financial risk to the economy.” How this all shakes out could go a long way to determining, deservedly or not, whether future Jay Powell Days are happy or somber occasions.

Edited January 11 by KYHorn

[UTPhil2006 3809]

2 hours ago, Neonmoon said:

But I wanted a HUGE rally / veruca salt voice

 

Looking like a damn EKG all to end up basically flat 

[Neonmoon 38130]

[Neonmoon 38130]

Reprice unlocked 

[Neonmoon 38130]

Habib on his Rate Forecast being wrong in 2023

"This one we got wrong. We thought they'd start to decline in May and be in the 5s in summer. That certainly did not happen. And there's reasons for that. One was, what we didn't see when we made our forecast in January of 2023, was that our debt limit would be totally removed. Janet Yellen wanted that removed, so there was a deal made by the Biden administration and by Kevin McCarthy, that said let's remove the debt ceiling and the government just printed money. I'm not going to debate whether it's a good idea or bad idea. The fact of the matter is that it added more supply, a lot of supply."

This might be one of the dumbest things I've ever heard him say. 

Let me get this straight

Biden passed the Inflation Reduction Act ($500 Billion) and CHIPS Act ($280 Billion) in 2022, even signed into law the $1.7 Trillion spending bill in 2022, and Barry and the gang thought for the first time since the Civil War, over 161 years ago, the US would default on its debt rather than vote to increase the debt ceiling

Really? 

[LCHorn 2629]

25 minutes ago, Neonmoon said:

Habib on his Rate Forecast being wrong in 2023

"This one we got wrong. We thought they'd start to decline in May and be in the 5s in summer. That certainly did not happen. And there's reasons for that. One was, what we didn't see when we made our forecast in January of 2023, was that our debt limit would be totally removed. Janet Yellen wanted that removed, so there was a deal made by the Biden administration and by Kevin McCarthy, that said let's remove the debt ceiling and the government just printed money. I'm not going to debate whether it's a good idea or bad idea. The fact of the matter is that it added more supply, a lot of supply."

This might be one of the dumbest things I've ever heard him say. 

Let me get this straight

Biden passed the Inflation Reduction Act ($500 Billion) and CHIPS Act ($280 Billion) in 2022, even signed into law the $1.7 Trillion spending bill in 2022, and Barry and the gang thought for the first time since the Civil War, over 161 years ago, the US would default on its debt rather than vote to increase the debt ceiling

Really? 

I haven't read Habib today because I'm pretty much only using the site to observe MBS changes, but yeah, that looks dumb.  He wasn't saying in January 2023 that he forecasted a debt default.  He said inflation would moderate and that rates would fall in turn. 

[UTPhil2006 3809]

1 hour ago, Neonmoon said:

Habib on his Rate Forecast being wrong in 2023

"This one we got wrong. We thought they'd start to decline in May and be in the 5s in summer. That certainly did not happen. And there's reasons for that. One was, what we didn't see when we made our forecast in January of 2023, was that our debt limit would be totally removed. Janet Yellen wanted that removed, so there was a deal made by the Biden administration and by Kevin McCarthy, that said let's remove the debt ceiling and the government just printed money. I'm not going to debate whether it's a good idea or bad idea. The fact of the matter is that it added more supply, a lot of supply."

This might be one of the dumbest things I've ever heard him say. 

Let me get this straight

Biden passed the Inflation Reduction Act ($500 Billion) and CHIPS Act ($280 Billion) in 2022, even signed into law the $1.7 Trillion spending bill in 2022, and Barry and the gang thought for the first time since the Civil War, over 161 years ago, the US would default on its debt rather than vote to increase the debt ceiling

Really? 

[UTPhil2006 3809]

10 year taking a dump post holiday. Up 0.12 to 4.07 

[Neonmoon 38130]

Fed Waller says no cuts yet (last paragraph) so 10 year went up 

Quote

As long as inflation doesn't rebound and stay elevated, I believe the FOMC will be able to lower the target range for the federal funds rate this year. This view is consistent with the FOMC's economic projections in December, in which the median projection was three 25-basis-point cuts in 2024. Clearly, the timing of cuts and the actual number of cuts in 2024 will depend on the incoming data. Risks that would delay or dampen my expectation for cuts this year are that economic activity that seems to have moderated in the fourth quarter of 2023 does not play out; that the balance of supply and demand in the labor market, which improved over 2023, stops improving or reverses; and that the gains on moderating inflation evaporate.

One piece of data I will be watching closely is the scheduled revisions to CPI inflation due next month. Recall that a year ago, when it looked like inflation was coming down quickly, the annual update to the seasonal factors erased those gains. In mid-February, we will get the January CPI report and revisions for 2023, potentially changing the picture on inflation. My hope is that the revisions confirm the progress we have seen, but good policy is based on data and not hope.

When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully. In many previous cycles, which began after shocks to the economy either threatened or caused a recession, the FOMC cut rates reactively and did so quickly and often by large amounts. This cycle, however, with economic activity and labor markets in good shape and inflation coming down gradually to 2 percent, I see no reason to move as quickly or cut as rapidly as in the past. The healthy state of the economy provides the flexibility to lower the (nominal) policy rate to keep the real policy rate at an appropriate level of tightness. But I will end by repeating that the timing and number of rate cuts will be driven by the incoming data.

 

[Neonmoon 38130]

And retail sales has the 10 year up 6 basis points to 4.11

@UTPhil2006 work your magic

[Storm the Field 5300]

1 hour ago, Neonmoon said:

And retail sales has the 10 year up 6 basis points to 4.11

@UTPhil2006 work your magic

That's a big beat.

[Neonmoon 38130]

You just know jobless claims will come in higher than expected like every other damn month, so 10 year will go up tomorrow too. 

I'm praying the PCE comes in lower on 26th (PPI gave that away I think), and the market pulls back

[UTPhil2006 3809]

1 hour ago, Neonmoon said:

You just know jobless claims will come in higher than expected like every other damn month, so 10 year will go up tomorrow too. 

I'm praying the PCE comes in lower on 26th (PPI gave that away I think), and the market pulls back

Pretty much. Build it up just to come back to where we started. Need to start stacking some wins instead of 1 step forward 2 steps back. 

[Wulaw Horn 19146]

19 hours ago, Neonmoon said:

You just know jobless claims will come in higher than expected like every other damn month, so 10 year will go up tomorrow too. 

I'm praying the PCE comes in lower on 26th (PPI gave that away I think), and the market pulls back

This was not wrong. 
locked my board and set up refinances 3 or 5 different people between Xmas and 1/10. Hit that window balls on. Think they are all going to sign. Ticking up and fighting fundamentals until maybe PCE?  
At any rate we are way better than the abyss right around Halloween. It still feels like 2 steps forward and then 1 back. Nobody is talking raising rates or higher for longer. It’s all will we cut 3 vs 6 or 7. Starting to think March cut isn’t happening. 
rates ticked up to 6.88 as of yesterday. Be interesting to see if they test 7 again. 
remember- it was 8.05 at the worst. 

[Neonmoon 38130]

Yep. As expected, jobless claims came in WAY under forecast. They will be revised. I don't think there is any fuckery, but I do think the "forecasts" need some tweaking. 

 

10 year up 2 basis points so far. Hopefully doesn't go too much further. 

Thankfully all my people are locked except 1 new construction, which I hope to lock after the "hopefully" PCE knocks us back down. Fingers crossed.