Here’s a couple informal reads on the economy. When I have a few extra ducats in my pocket, sometimes I’ll spring for the more expensive Shrimp Alfredo at Olive Garden instead of the cheaper Lasagna Classico. When Freedom Mortgage’s Stan Middleman is faced with a similar situation, instead of buying a couple seats near the dugout of the Philadelphia Phillies, he bought a piece of the entire team. I have some Tupperware that I never bought. You? My Mom went to Tupperware parties: Not expensive, lasts forever, people would have their favorites pieces, using it better than thousands of miles of plastic wrap clogging the landfills every year. But Tupperware is faltering. And so is San Francisco’s 127-year-old, iconic Anchor Brewing Company. The brewer of Anchor Steam, owned by Japan’s Sapporo, confirmed that it would not brew its beloved Christmas Ale this year due to time and cost constraints. America’s first microbrewer is planning to pull back i
I mentioned yesterday that 4 out of 3 people have trouble with math, but it doesn’t take a genius to do subtraction. 6 - .2 = 5.8, right? Wouldn’t you like to earn 5.8 percent on your money? The Federal Reserve reports that U.S. households are holding $17.9 trillion in cash and cash equivalents. If your credit union or bank is paying you (and other depositors) .2 percent on your bank account, but owns a portfolio of new Freddie or Fannie loans where borrowers are paying 6 percent, well, that is a darned nice spread. I know that I am simplifying that somewhat, but what bank wouldn’t want that? Along those lines, underwriters are keenly aware that the average monthly payment on a new car loan hit a record high of $686 in June. Household balance sheets are still in good shape after bolstering savings during the height of the pandemic, but we can expect those to ebb with inflation. (Today’s podcast is available here and is sponsored by SimpleNexus, an nCino comp
If you can't think of a word or phrase, say, "I forgot the English word for it." That way people will think you're bilingual instead of an idiot. It is not hard to remember the phrase, “Rates are going higher.” While independent mortgage banks continue to compete with the intermediate ARM offerings from depositories in the 3 percent range, and originators shift their sales techniques, on a larger scale the Federal Reserve acted yesterday confirming its desire to slow inflation down by raising the target overnight Fed Funds rate by 75 basis points (.75 percent). (For a primer, MCT had a post, “How Does the Federal Reserve Affect Mortgage Rates”?) Forget worrying about lack of growth, or its market guidance credibility (Fed officials were talking about 50 basis points for weeks), the 75 “bps” helps the Fed’s inflation-fighting credibility. And remember that the Fed hasn’t even started the selling pr