| Last | Change | Percent | |
| S&P Futures | 1413.3 | 6.2 | 0.44% |
| Eurostoxx Index | 2571.5 | 24.7 | 0.97% |
| Oil (WTI) | 88 | 1.5 | 1.75% |
| LIBOR | 0.311 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 80.14 | -0.196 | -0.24% |
| 10 Year Govt Bond Yield | 1.63% | 0.00% | |
| RPX Composite Real Estate Index | 191.2 | -0.2 |
Markets are stronger this morning on optimism over a deal on the fiscal cliff. 3Q GDP came in at 2.7% lower than the 2.8% estimate, but higher than the initial 2% estimate. Initial Jobless Claims were 393k and the prior week was revised upward. Bonds are down, while MBS are flat.
The mortgage interest deduction, once considered untouchable, could be part of a deal on the fiscal cliff. Certainly that would be a negative for house prices, especially in expensive areas like DC, NYC metro area, and the West Coast.
Another tax break is the Mortgage Forgiveness Debt Relief Act, which is scheduled to sunset at the end of the year. This prevents borrowers from getting a tax bill if they do a short sale or get a principal forgiveness mod on their loans. Consumer advocates are urging Congress to extend the tax break.
SAC has received a Well's notice. Stevie Cohen has apparently not been named in the Martoma case or the SEC's documents, but the noose is tightening.
FHFA Acting Director Ed Demarco gave a speech at the Exchequer Club in DC yesterday. Key takeaways: G-fees have risen and will continue to rise until credit risk is priced as it would be if private entities were doing it. I have seen some estimates that it will go to 75 bps. In addition, they are considering G-fee adjustments by locality, which means borrowers in judicial states will pay more. All of this is in an effort to "crowd in" private capital back to the mortgage market. The ultimate effect will be to make conforming mortgages more expensive, which means the push / pull between the Fed and the regulators will continue.
Jim Grant has a great interview on Bloomberg discussing the Fed's war with the market mechanism and the unintended consequences of ZIRP. Once of the biggest is the creeping "Japanesization" as artificially low rates keep zombie companies alive.
The dog that didn't bark: The wave of foreclosures that never occurred.
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