Mish's Global Economic Trend Analysis |
- Interested In Buying Gold? Why Wait?
- Mortgage Applications Decline 13th Time in 15 Weeks; Are Mortgage Rates Cheap? What's Next For Housing?
- Egypt Police Storm Pro-Mursi Camps; Deadly Clashes; Stocks Lower, Market Closed Until August 18
Interested In Buying Gold? Why Wait? Posted: 14 Aug 2013 06:41 PM PDT The title of this post is a play on the Yahoo! Finance video Wait for Further Pullback in which Jeff Macke asked Options Monster founder Jon Najarian if this rally was the "real deal". Najarian says gold is looking good so far but it's still locked in a range. Where others see resistance in the $1,325 area, Najarian is more optimistic. "It was $1,425 in June of this year. I think that's the next stopping point."Gold "Looking Good" So Why Wait? Najarian says "gold is looking good". He also thinks "$1,425 is the next stopping point". But low and behold, Najarian wants another pullback to $1300 first. Good grief. Why does anyone think they can time anything to that degree? I suggest it cannot be done. If you think $1,425 is the next stopping point, does it matter that much if you buy at $1300 vs $1325? Here's the deal: I do not know what the "next stop" is for gold, nor does anyone else. What I do know is that micro-managing entry points, hoping for a $25 pullback when you believe the price is headed $100 or more higher is silly. By the way, I also think "gold is looking good" here, but I am talking my book as well as my belief. That aside, I am pleased to see all these wimpy bulls. One of these breakouts is going to hold, and I will not be hoping for a pullback when it happens. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Posted: 14 Aug 2013 10:00 AM PDT Here are a couple of charts courtesy of Bankrate. The annotations are mine. 15-Year Fixed Rate Mortgages 30-Year Fixed Rate Mortgages Explaining the Rebound in Housing If you are looking for what fueled the rebound in home sales and the increase in home prices, look no further than the above chart. In the two-year period from December 2010 until December 2012, the rate on popular 30-year mortgages fell from 4.97% to 3.42%, a decline of 155 basis points (1.55 percentage points). In April, rates were still near record lows at 3.56%. Are Mortgage Rates Cheap? From the record low in December 2012, 30-year fixed rate mortgages have risen 97 basis points to 4.39%. While still low historically, it's the direction of the trend that is important, not the absolute number. A one percentage point increase in rates decreases housing affordability by 10-11%. US Treasury Rates Mortgage rates are generally tied to rates on 10-Year US treasuries. Here is a chart that explains the rise in mortgage rates. click on chart for sharper image
The above chart from yesterday's post Treasury Yields Rise Following .2% Rise in Retail Sales; Fed Tapering Begins in September? Treasury Yields and Housing Affordability On June 24, in 10-Year Treasury Yield Up 100 Basis Points Since May; What's That Mean for Mortgage Rates and Housing Affordability? I commented ... Anyone who stretched to buy is no longer qualified unless they locked some time ago.Mortgage Applications Decline 13th Time in 15 Weeks From the latest Mortgage Bankers Association Weekly Application Survey ...
One week does not make a trend, but the trend looks ominous. The weekly application surveys show a decline in mortgage applications for the 13th time in 15 weeks. What's Next For Housing? Curiously, refinance applications although trending lower, still account for about 63% of applications. I spoke with my friend Michael Becker, a mortgage broker at WCS Funding Group and he commented that he is still refinancing people with rates over 6%. Some people just now have the equity available to refinance. Yet, with rising rates, the drop in affordability, the pent-up demand to buy declining, and the decline in the number of applications, don't expect too much more (if any), rise in home values. And don't expect mortgage applications to break this trend either. OK Ben, you still going to taper? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Egypt Police Storm Pro-Mursi Camps; Deadly Clashes; Stocks Lower, Market Closed Until August 18 Posted: 14 Aug 2013 07:25 AM PDT Violence in Egypt took a turn for the worse as Police Storm Pro-Mursi Camps. Egypt's security forces stormed two sit-ins in Cairo where Islamist supporters of former President Mohamed Mursi have been protesting his overthrow. Bursts of gunfire rang out, and reports of casualties varied widely.Stocks Lower, Market Closed Until August 18 Bloomberg reports Egyptian Stocks Lower, Bourse Closed. All but two stocks on the index fell as police stormed the camps at Rabaa and Nahda in the capital, where Mursi supporters have congregated since he was overthrown by the military last month. The death toll reported by the Health Ministry was disputed by the Muslim Brotherhood, which claims hundreds were killed by security forces. The group and its allies had vowed to maintain demonstrations until Mursi is restored to office.Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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