Morning Report - data dump

Vital Statistics:

	Last	Change	Percent
S&P Futures	1668.2	-13.8	-0.82%
Eurostoxx Index	2833.0	-19.1	-0.67%
Oil (WTI)	107.2	0.3	0.28%
LIBOR	0.263	0.000	0.00%
US Dollar Index (DXY)	81.74	0.032	0.04%
10 Year Govt Bond Yield	2.78%	0.07%
Current Coupon Ginnie Mae TBA	104	-0.4
Current Coupon Fannie Mae TBA	103	-0.4
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.39

Somebody beat the tape with the ugly stick this morning, with stock index futures and bonds both down sharply. For stocks, an earnings miss from Wal Mart and yet another restructuring out of Cisco Systems are feeding the negativity. On the bond side, stronger data has driven the 10 year yield out of its recent 2.57% - 2.74% trading range.

Let's run through the economic data:

• Initial Jobless Claims 320k vs 335k expected
• Empire Manufacturing 8.24 vs 10 expected
• Consumer Price Index + .2% in line with expectations
• Industrial Production flat vs expectations of a .3% increase
• Capacity Utilization 77.6% vs 77.9% expected
• Bloomberg Consumer Comfort Index -26.6, first decline in a while
• NAHB Homebuilder Sentiment Index rose to 59 from 57
• Philly Fed 9.3 vs expectations of 19.8

So overall, a mixed bag of data. Initial Jobless Claims were the best news (lowest in 6 years), while the drop in capacity utilization is an ominous sign.

The latest CoreLogic Market Pulse is out. While everyone knows that rising rates have more or less killed the refi market, they estimate that 29% of borrowers are in the money to refinance - meaning that the savings will cover the up-front fees to refi. So, that is still a good chunk of people. If Obama does HARP 3.0 and extends the dates , then another refi wave is on the way. 

Mortgage debt has fallen $91 billion over the past quarter, and HELOCs fell by $12 billion. Non-housing debt rose. Overall household debt fell by .7% to $11.15 trillion. The Great American Deleveraging Continues...

FBR analyst Edward Mills is predicting that regulators will release new draft rules concerning mortgage secuiritzations, including the removal of down payment requirements for QRMs and premium capture cash reserve accounts. The original proposal was to require 20% down in order to release the securitizer from "skin in the game" holdings. (non-QRM MBS would require the issuer to hold 5% risk retention). Consumer Groups opposed the rule because it will restrict credit. Also they are ditching the Premium Capture Cash Reserve Accounts, which mandated that any securitization gain on sale could not be touched until the security no longer exists. The government right now is backing 90% of all newly issued mortgages and they finally figured out that regulatory overreach was preventing that number from dropping. 

The long-awaited foreclosure wave that dates back to the beginning of the crisis is finally starting to happen. Foreclosures increased 3x in Baltimore. This is due to all of the foreclosure prevention actions taken by state and local governments are finally winding down. New York State is legendary for how long you can go without making a mortgage payment. Of course this is why prices are rocketing on the West Coast and they are modestly increasing on the East Coast. Maybe politicians and regulators finally figured out that all of the foreclosure restrictions they put on banks were having the effect of depressing prices, instead of supporting them, as they had hoped.