Morning Report - glum news for the originators

Vital Statistics:

	Last	Change	Percent
S&P Futures	1837.2	-4.4	-0.24%
Eurostoxx Index	3158.1	-10.7	-0.34%
Oil (WTI)	94.17	0.0	0.00%
LIBOR	0.236	-0.002	-0.63%
US Dollar Index (DXY)	80.92	-0.106	-0.13%
10 Year Govt Bond Yield	2.86%	-0.04%
Current Coupon Ginnie Mae TBA	105.1	0.0
Current Coupon Fannie Mae TBA	103.8	0.2
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.45

Stocks are lower this morning after a Citigroup earnings miss. Initial Jobless Claims fell to 326k and consumer inflation remains low. Bonds and MBS are up.

Citi reported mortgage originations dropped 43% sequentially and 51% year-over-year. The stock is down 3% pre-open. Separately, Citi sold Fannie Mae MSRs on $10 billion worth of loans. These are mainly delinquent loans.

Flagstar is cutting staff by 17%.

The Fed released their Beige Book survey yesterday afternoon - nothing earth-shattering, though it does appear that things are picking up. Still, the survey is peppered with characterizations such as "modest" and "moderate." Since the Beige Book surveys are basically a recap of recent economic announcements broken down by Federal Reserve district, it contains no "new news" and is therefore not a market-moving release.

The NYT has a long article on the woes affecting homebuyers and lenders. More and more banks are going to have to rely on the purchase business, which is a different animal than the refi business. The big banks are still shunning those without pristine credit. That said, the big banks are not the only game in town, and this is an opportunity for the smaller lenders to say "they might not give you a loan, but we will."

Americans' assessment of their own personal situation ticked down, according to Gallup. 42% of Americans said they were worse off than a year ago, up from 40% last year. This is a surprising result given how much asset prices (stocks and housing) have improved. Maybe the December jobs report wasn't just a fluke due to bad weather.