Economic Updates

October 6, 2012 For the first week of October, which is a historically notorious month for the stock market, things turned out rather well. The "Rock-em, Sock-em" employment report surprised everyone, and you would think that we were on our way toward an old-school, 1980s-style boom. Even more surprising was learning that an ex-General Electric Chairman actually Tweets! That's right, good-old Chainsaw Jack was out there on Twitter saying that Obama's "Chicago guys" were "cooking the books" in making the employment picture appear a whole lot rosier than it really was. Welch may have had a point, and the government statistics may have been mathematically massaged higher, but if Jack Welch is turning into a conspiracy guy, then maybe we are all conspiracy buffs now. Critics of Friday's positive employment report were quick to say that a lot of the jobs were part time, and that the report did not reflect the "real" economy, but it was a solid sounding report just the same. Stocks initially rallied, but faded as the day went on, and finished mixed and essentially flat for the day. Stocks may have finished mixed on Friday, but the broader week was a win for the major indices, as we saw weekly gains of 1.3% for the Dow, 1.4% for the S&P 500 and 0.6% for the Nasdaq. The decline of 0.3% of unemployment levels from 8.1% to 7.8% sounded great at first, but the fact that the stock market ended the day mixed and flat meant that investors are not convinced that "Happy Days are here again." The buzz was that a lot of the jobs were part-time jobs and that a lot of the jobs were government jobs, which means stocks will need more solid economic affirmation if they are going to rally higher from these already extended levels. Once again, the cynics and critics of the government's numbers were not hard to find on Friday. Some economists make reference to the U-6 employment data, which includes those workers who are under-employed, as well as those who have given up completely on looking for work. Apparently, this U-6 reference would make the "real" unemployment level up around 14.7%. This certainly counters the 7.8% number we saw on Friday, and it explains why so many newly ordained "conspiracy" buffs like Jack Welch are crying "foul" as to how the government comes up with its unemployment numbers. Aside from the employment numbers, the stock market has another arch nemesis to deal with next week, and that is the launch of earnings season for the past quarter. We all know how vibrant the stock market has been this year, and we all know how that should have been reflecting a buoyant and improving economy. Should earnings disappoint, we could see some big selling pressure, but then again, with the stock market flirting with multi-year highs, how bad could the downside be? Stocks have had the wind at their backs for more than three years, and their resilience to any bad news has been impressive. Maybe earnings season will prove to be better-than-expected, and maybe the economic numbers will continue to improve. That would definitely have the bullish camp smiling, but it is definitely a challenging thought. The economic numbers for a bullish earnings season just do not seem to be in place, so we will just have to see how the season unfolds. Global tensions are continuing to rise all over the world, and we are also seeing pockets of spiking prices from everything from fuel to food. We had a solid up week for stocks, though, so let's head into the first October weekend of fun, food and football on a positive note. Leaves are changing all over, and it is a beautiful time of year to take a breather. But be ready to get back to "reality" at a moments notice. The crosscurrents we have mentioned are still in place, and this is a tough market to navigate.

OC Register Seminar on Foreclosure

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Help is Here for Your Underwater Home
March 14th, 2012, 2:16 pm · · posted by abarker
Is your home underwater? Having trouble making your mortgage payments? Is a loan modification an option for you?

The Orange County Register is hosting a Short Sale Seminar on Tuesday, March 27. the 90 minute session is free to home owners but seating is limited so RVSP is required.

A panel of speakers will cover topics related to solutions and options available to homeowners who are facing foreclosure.

Sponsored by The Core Realty Group of Teles Properties, the presentation will include a panel of experts in real estate, mortgage, real estate law, financial planning and credit repair.

The key speaker for the event will be Greg Corpodian, a short sale specialist with Teles Properties. His team, also known as The Core Realty Group will speak for 60 minutes and will have a 30 minute question and answer session after the presentation. Distressed homeowners will be informed about options and alternatives for navigating through this stressful situation.

“This is a tremendous opportunity for distressed homeowners,” says Mr. corpodian. “The Core Realty group will also provide access to their entire team of professionals.

Guest speakers include Nathan Warran and Eric Crisp of NJW Law Group, Financial Advisor Scott Hadley of Independent Financial, Mark Coats of National Credit Federation, tax consultant Patricia Leung, and Nicole Francis of Raintree Financial. If you, or someone you know, are having trouble making their mortgage payments, this opportunity should not be passed up. Please RSVP as soon as possible at http://www2.ocregister.com/promos/shortsale/ or by calling 714-796-5060.

If attending this informational session is not an option, you can also schedule a confidential consultation with Mr. Greg Corpodian of the Core Realty Group at 949-610-5575.

Posted in: Short Sale Seminar • foreclosures • Greg Corpodian • loan modifications • Orange County • Santa Ana • short sale seminar • short sale specialist • Teles Properties • The core Realty Group

Weekly Economic Update!

The luck of the Irish is certainly still with the bulls this year as they closed out yet another impressive week higher, and headed into the St. Patrick’s Day weekend feeling like a bunch of leprechauns that just found a pot of gold. (Happy St. Patrick’s Day, by the way!). When the bell rang on Friday afternoon, the major indices were flat for the day, but definitely winners for the week, with the Dow, Nasdaq and S&P 500 all posting weekly gains of aabout 2.4% each. Now that is a great way to start a winter weekend!

We had generally solid news all week, but Friday's economic numbers made stocks step back and take a breather. That was likely why we saw the roughly flat close on Friday. The economic news was not too bad, but it was the sort of news that makes even the most bullish of bulls scratch their heads a bit. The first unsettling news came from the University of Michigan's consumer sentiment report, which came in at 74.3; down from last month's 75.3 reading. It also was below the 76.5 reading economists expected, which was the first monthly decline in sentiment since August.

Economic news from the inflation front also left economy and inflation watchers with mixed emotions. The Consumer Price Index (CPI) rose 0.4%, and while it was below the 0.5% rise economists had expected, that rate still equates to 4.8% on an annual basis. It was also double the 0.2% increase we saw last month. The "core" rate that excludes food and energy rose just 0.1%, versus the 0.2% analysts had expected. Apparently, the 6% rise in gasoline prices we saw last month accounted for much of the spike in the standard CPI rate.

This definitely hints at inflationary pressures in the economy, and that is not what the Fed wants or needs right now. Maybe this was why we saw the yield on the 10-year Treasury spike from just below 2.0% in the past week or so to nearly 2.3%. Oddly enough, this spike in rates occurred precisely when precious metals prices fell this week. Oil keeps zigging and zagging, but it rose to around $107 per barrel. The interest rate scenario and the commodities markets are not overly suggesting inflation just yet, but they are worth keeping an eye on in the days and weeks ahead.

Bond guru Bill Gross from PIMCO was out there this week saying that inflation, higher interest rates and a weakening dollar were on the way. He said that the recent spike in rates might have been in anticipation of the "Operation Twist" bond buying by the Fed ending in the months ahead. Gross said that he thinks the Fed will HAVE to launch a QE3 program soon, or the Fed runs the risk of another BIG downturn in the stock market and a BIG upturn in interest rates. For this reason, the Fed sees more quantitative easing (QE-to-the-moon) sooner rather than later.
Call me or write me at (949)610-5575 or gcorpodian@aol.com

January Home Sales Up Again

Existing-home sales rose in January for the third time in the past four months, according to a release from the National Association of Realtors (NAR), and inventory also fell the same month. Total existing-home sales increased 4.3 percent compared to the previous month of December and 0.7 percent compared a year ago in January 2011. Total housing inventory at the end of January fell 0.4 percent compared to the previous month and 20.6 percent compared to a year ago.

It's been said that no news is good news.

Last week, the Jobs Report brought some good news for the labor market.
The headline Jobs Report showed 243,000 jobs created, which was much better than expected. Meanwhile, a whopping 257,000 private jobs were created, also much higher than expected. Upward revisions to November and December added another 60,000 jobs to what was previously reported for those months. And adding to the euphoria was a 0.2% decline in the Unemployment Rate, bringing it to 8.3%...the lowest since February 2009.

Despite all this good news, the report did show a pretty sharp decline in the labor participation rate from 64% to 63.7%. We really need to have more people participating, or working to help pay down our debt. Understandably, the demographics of baby boomers retiring does account for some of the decline. But is it the entire 0.3%? And the U-6 Unemployment Rate (which counts all persons marginally attached to the labor force, including those who are employed part-time but would prefer full-time) remains at a lofty 15.1%, with that figure dropping just 0.1% for the month.

And there was other good news to note last week as well: The Commerce Department reported that Personal Incomes rose in December by 0.5%, above expectations and well above the 0.1% reported in November. This marked the largest increase in nine months!

Relief from Freddie Mac!

With Bulletin 2010-17 Freddie Mac required Servicers to consider unemployed Borrowers for the forbearance relief options described in Guide Chapter A65, Reinstatements and Relief Options. With this Bulletin Freddie Mac is introducing new forbearance requirements to provide a “short-term unemployment forbearance” relief option to assist Borrowers who are unable to make their Mortgage payment due to unemployment

Mortgage Rates

MBS prices are now up on the session (FNMA 3.50 +9/32), after an early dip lower. US data had bonds selling off (rates up) in early trade, but remaining doubts about the EU’s ability to control the current debt crisis drove investors back into dollar-denominated bonds (rates down). Initial Jobless Claims (381k vs. 395k est.) and Wholesale Inventories (1.6% vs. 0.2% est.) came in better than expected, driving the early drop in bond prices. Then, comments from European Central Bank President Mario Graghi disappointed investors who expected stronger intervention (more quantitative easing, bond buying) by the mammoth Fed-like entity. The EU drama continues to be the focal point of trade for most investors, as we await the conclusion of yet another summit in the Euro zone. So far, the outcome of these brainstorms have been essentially meaningless, but the markets seem optimistic once again, that the union will come up with something tomorrow. It seems like we are being set up for yet another disappointment, but that would be good for interest rates, so it’s not all bad for the mortgage industry.



Tomorrow, Friday, 12/9, as indicated above, will bring the final day of an EU Finance Ministry Summit, whose primary goal is to decide how the union is to proceed in dealing with the debt crisis. As we have discussed, there is definitely a difference of opinion amongst the members. The problem is that many of these differences seem rooted deep in the ideologies of each country. On one hand you have a fiscally conservative Germany, and on the other, a socialist-type like France. There are 17 of these different countries, and each is different, other than sharing a currency. Time will tell whether or not an understanding can be reached, but expectations are now quite low for anything to be resolved tomorrow. It is hard to tell for sure, but it is likely that a complete failure tomorrow may send US rates lower, as money flows back into US safety plays, while an ground-breaking agreement may send rates higher. If the summit passes with a so-so outcome, like so many others before it, we may see little marker reaction after all of this week’s chatter. US data tomorrow will likely be ignored, but we do have the Consumer Sentiment number (est. 65.1) and the Trade Balance (est. -44B).