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Yesterday I was driving across Northern California to the coast (Gualala), and in Sacramento I asked the McDonald’s drive-through clerk (hey, only the best for me!) why the medium French fries were 30 cents more than the double cheeseburger ($4.29 versus $3.99). She immediately launched into an explanation of farming inequalities and Keynesian economics, and how aggregate demand does not necessarily equal the productive capacity of the economy. I shot back with, “Whoa, sister, where’s my extra catsup packet?” Okay, that exact exchange didn’t take place, but it did remind me of supply and demand, and mortgage rates, and there is an explanation of the current forces is in the capital markets section. There are a myriad of other things that CEO and owners are watching, many of which will be discussed today at 11AM PT during the Mortgage Matters podcast (register here) when Mark Jones, President of Union Home Mortgage and Chairman of the MBA, is the guest ....
My cat Myrtle doesn’t have a lot of rizz, and there are those that will argue that no cat has any charisma whatsoever. But plenty of marketing people do, or can create it, and even if you’re not in marketing, there are some clever marketing people out there. Creative minds as well, and if you’re looking for a Christmas present, here are the “best inventions of 2023” per Time Magazine. There is also cleverness and creativeness in the modular home manufacturing industry, probably far outpacing the ability of state and local government to issue permits. Meanwhile, lenders are facing a winter trying to figure out if they are in the “Survive until ‘25” camp or the “Grow more in ‘24” mindset? The credit industry is reeling as lenders grapple with soft versus hard pulls, renegotiating pricing, and bundled deals. And for some reason LO comp continues to be unsettled: dual comp, MLOs as real estate agents, transferring ....
“People would learn more from their mistakes if they weren’t so busy denying them.” Here’s a little trivia for the compliance folks in the coffee room: The CFPB handles 20,000 consumer complaints per week, and given that financing a home, and then servicing the loan, is the largest financial transaction most individuals go through, you gotta figure a chunk of the 20,000 involve mortgages. While we’re on the CFPB, Director Chopra addressed issues related to refinancing in a hearing on Capitol Hill last Thursday. But the headlines have been grabbed by interest rate improvements in our free market economy, and the economics calendar this week will be highlighted by the U.S. jobs report on Friday, arriving just five days before the Federal Reserve's December 13 meeting. (Expect payrolls growth will rise to 200K in November from 150k job additions in October, and the unemployment rate to stay steady at 3.9 percent.) Today’s podcast can be fo ....
Yesterday, a clown held the door open for me. It was such a nice jester. On the flip side, it’s not nice being taken advantage of and lenders are feeling Thunderstruck about, as this Commentary has mentioned several times, credit costs being jacked (more below). On the inflation theme and a little more mainstream, for me and plenty of people who read this Commentary every day, is the egg price fixing that has been occurring. (Remember when prices were way up around Easter?) Although inflation has been slowing, we don’t need this stuff. And the price of the twelve gifts described in the classic song “The 12 Days of Christmas” is at a record high of $46,730, according to PNC’s 2023 Christmas Price Index. At the other end of the cost spectrum, how’d you like to live like Martha Stewart (for a night) for $11.23? Rent her place! (Today’s podcast can be found here, and this week’s is sponsored by MCT. MCT’s technology and know-ho ....
Home schooling is the goodest thing I ever did for my two kids. Hopefully, they both learned that an inverted yield curve doesn’t automatically create, or lead to, a recession. As we approach 2024, short term rates have been higher than long term rates since 2022, and when you think of the last 10 recessions eight of the last 10 were preceded by an inverted yield curve. But now the “experts” are saying that this yield curve inversion is due to artificial reasons, namely the U.S. Federal Reserve’s actions that shifted rates, rather than more natural factors. Time will tell, and no one can eliminate business cycles, so we may have a recession (and with it, lower rates) at some point. But for now, “The U.S. economy is becoming increasingly recession resistant. State, local, and federal government spending as a percentage of GDP has risen from 29 percent in 1962 to 35 percent today. Healthcare spending has risen from 5 percent of GDP in 1962 to 18 percent ....