Wednesday, April 30, 2008
URLs for Statistics
http://www.bls.gov/news.release/cpi.nr0.htm
US Dollar Index:
http://www.fxstreet.com/rates-charts/usdollar-index/
Durable Goods Order:
http://www.census.gov/indicator/www/m3/
GDP:
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
Home sales:
http://www.realtor.org/wps/wcm/connect/44ee9300498ba8e88bfbabe6426faec1/REL0803EHS.pdf?MOD=AJPERES&CACHEID=44ee9300498ba8e88bfbabe6426faec1&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc&CACHEID=f631900049892cc0b166b1e86053e3bc
Housing Starts:
http://www.census.gov/const/newresconst.pdf
Industrial Production:
http://www.federalreserve.gov/releases/g17/Current/
Business Inventories:
http://www.census.gov/mtis/www/current.html
Change in Leading Indicator:
http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1
Personal Income:
http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm
Effect of economic data on rates
Effect of economic data on rates
Number of arrows indicates potential effect on interest rates. 1 arrow=least effect, 5 arrows=max. effect
| Economic Event | Effect on Interest Rates | Significance of event |
| Consumer Price Index (CPI) Rises | Indicates rising inflation. | |
| Dollar Rises | Imports cost less; indicates falling inflation. | |
| Durable Goods Orders Increase | Indicates expanding economy | |
| Gross National Product Increases | Indicates strong economy | |
| Home Sales Increase | Indicates strong economy | |
| Housing Starts Rise | Indicates strong economy | |
| Industrial Production Rises | Indicates strong economy | |
| Business Inventories Rise | Indicates weak economy | |
| Leading Indicators (LEI) Increase | Indicates strong economy | |
| Personal Income Rises | Indicates rising inflation | |
| Personal Spending Rises | Indicates rising inflation | |
| Producer Price Index Rises | Indicates rising inflation | |
| Retail Sales Increase | Indicates strong economy | |
| Treasury Auction Has High Demand | High demand leads to lower rates | |
| Unemployment Rises | Indicates weak economy |
jumboMortgage rates: why still not low ?
....
Members of Congress and people in the mortgage-backed securities industry remain optimistic about the new rules. They say it is too soon to declare success or failure. Relief, they insist, remains around the corner. They argue that the credit market that fuels home ownership must be given time to adapt to rule changes that affect billions in potential loans.
This month, Freddie Mac, one of the two main government-chartered companies (along with Fannie Mae) that helps the housing market by purchasing loans in bulk from lenders, said that over the next year, it would buy up to $15 billion of the jumbo loans. That change and others that may follow, optimists argue, could lead to more loans and bring down interest rates.
...
Freddie Mac estimates the new rules could encourage $40 billion or more in loans by year’s end, which it estimates could finance new mortgages or mortgage refinancings for 50,000 or more borrowers.
....
The reason has to do with the way loans are sold and securitized. Conforming loans carry a lower interest rate in part because lenders can package and sell those loans as mortgage-backed securities directly to either Fannie Mae or Freddie Mac or to private investors who know that the housing finance agencies can buy them later. And some of those loans can be sold even before they are finalized because they qualify for the “to be announced” market that allows fixed-rate mortgage-backed securities to be traded freely as interchangeable commodities.
An influential trade group of the nation’s largest financial institutions, the Securities Industry and Financial Markets Association, recently made a key decision that some critics say has kept those rates from dropping. The association decided that loans above $417,000 — even those jumbo loans now considered by law as conforming — would not be eligible to participate in the “to be announced” market.
Sean Davy, a managing director at the trade association, said that lumping the new loans in with the smaller conforming ones could have created enough uncertainty and instability to drive up rates on the conventional loans.
....