One measure of evaluating the change in price of goods is by using a “price deflator,” which considers not only the change in price against a base year (2005), but also the fact that people’s buying habits for what they consume also changes. The “deflator,” therefore, is not based on a... Read more
Fig.1 below reflects an “Intra‐Day” perspective for FNMA current coupon yields and the decline of ~0.18% over the past three days, which is in direct conflict to what would have been expected given the looming debt ceiling concerns. Economic fundamentals today outweighed concerns over the debt debate as a weaker-than-expected... Read more
I’ve been asked a few times for perspective on how tighter lending standards are influencing not only origination flows but also consumer access to credit. Figure 1 highlights the change over time by vintage (when the loan was originated). There is a noticeable rise in FICO between 2008 (680... Read more
I first set foot on U.S. soil at the age of 9 — nearly 19 years ago. I arrived with my Mom on a flight from Poland, capable of counting to 10 in English and terrified of the future. I can vividly remember my grandmother lamenting about when I’d... Read more
Headline news this morning (other than concerns over how Greece plans to reduce its debt burden by $111Billion) has been focused on the S&P Case Shiller home price index results for April (based on a prior three month average) showing a decline year-over-year of (3.96)%. The report shows that... Read more
Unemployment is not only part of the Fed’s dual mandate (price stability + maximum sustainable employment), it is central to the foundation for an economic recovery. An element not often discussed is the “timeline” of unemployment, which is what we are highlighting below. Most people are aware of the... Read more
In brief, the news this morning was disappointing with the Household Survey Data reporting an unemployment rate of 9.1% (+0.1%). This was not unexpected (given earlier weakness from the ADP results) as the Establishment Survey showed a lack of growth in both Non Farm Payrolls +54,000 (expected +165k)  and... Read more
A few weeks ago on April 12th we wrote about the “spread compression” that had occurred between secondary mortgage market interest rates (rates paid by borrowers) and the risk-free Treasury curve, suggesting that mortgage rates to borrowers will be more directionally dependent on what happens in the Treasury market moving forward.... Read more
This morning, the Bureau of Economic Analysis for Gross Domestic Product released figures for the third quarter that showed an economy that is growing at an annualized pace of 2.6%. Thankfully, we consider that to be on target with expectations. More importantly, this comes on the tailwinds of other... Read more
It’s not that common to see a video go viral about a wonk-ish economic topic like quantitative easing. Quantitative easing, which the Federal Reserve is currently undertaking, is a monetary policy intended to jumpstart the economy while keeping interest and mortgage rates low. But a couple of robotic bears (who... Read more