Today is Wednesday which means as I noted last night the bond auction out of Europe from Portugal would be closely watched and could be a major catalyst, it was more like a well received draw as the 4 year notes saw an escalated yield, from 4.041% from the last auction to 5.396% today. This may reflect short term concerns as the cost of debt for the short term rose. However, mainly as a result of the European Central Bank's (ECB) bond buying all week, there was more confidence in their 10 year auction which came in lower from 6.806% to 6.716%. You might say it was a draw and not the big catalyst we expected one way or the other, but ECB talk that came out right after the auction about bond buybacks and other issues to be taken up at next week's meeting was received well by the market sending European stocks higher. Tomorrow we have the Spanish auction which will probably be the more significant of the two events.
The Mortgage Bankers Association Index showed considerable improvement over their late December 2010 releases. It came in marginally positive where previous recent releases were way down.
Although the information is from an independent Zillow, I still think the declines are underestimated. I've been talking more with homeowners here in South Florida and the amount they are underwater in this new neighborhood, is comparable to what I saw in my old neighborhood. Townhouses this time, rather then single family homes are showing the same declines at 50% or greater. 3 Neighbors in nearby neighborhoods I've talked with all paid between $175k and $185k between 2005/2006 and the selling price in the neighborhood has consistently come in at $75-$80k, well beyond the 25-30% drop that has been estimated. All are significantly underwater, one received a modification taking their payments down from $2000 a month to $1000, but that modification is going to reset in 10 months and they'll be back at an unsustainable $2,000 as the better half of the couple has lost teaching jobs 2x in the last year and a half and still can't find work.
Also interesting was the NYSE this morning invoking rule 48-the cause? Supposedly snow, but who knows. Here's the story.
No comments:
Post a Comment