Mortgage Applications at a Twenty Year Low
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0:00-5:35 – Intro
Mortgage Applications Down & Mortgage Department Layoffs and the Media Myth of a Housing Recovery
5:35:11:37 Discussion of the Fed and their view of the weather and its impact on the economy. Discussion of the banks and their recent announcement to layoff workers in the mortgage division. QE is not even creating jobs in the banking sector!
Discussion of bankers going missing and a Financial Times Gold manipulation story gone missing. Discussion of the media’s complicity in spinning economic news. Louis compares the initial jobless claims language in an AP headline from August 2013 to last week’s NY Times near identical headline– “Unemployment Filings Fall, Signaling Steady Job Gains”. Mortgage applications dropped to a twenty year low yet the media insists on using the term “recovery” to describe the housing market. People are getting fired by the thousands in the mortgage sector, mortgage applications are down to 20 year low, there are consistently 350K unemployment claims each week and yet the recovery story persists and the stock market roars to new highs! Usually bull markets reflect a growing economy not some tepid recovery stalled by bad weather.
11:37-12:55 The Fed Presidents are still talking taper despite signs that the economy is not improving. The Fed is projecting, despite the slow start to the year, that the economy will improve during second half of the year – a false prediction they make every year.
Recovery Leads to …. Recovery!
12:55-18:20 Discussion of the weather and its (minimal) impact on the economy. Discussion of who is buying homes- low volume of purchasers taking out mortgages and all cash investors who are exiting the market. Prices are rising not due to increased demand but rather because of very tight inventory. Louis and Ryan explain why its necessary to understand what the Fed does. Discussion of the impact of underwater homeowners on housing inventory.
Definition of recovery- a temporary state. Recovery should lead to expansion, not more “recovery”.
18:20-21:50 0 Ryan talks about whether its a good time to buy a home. Discussion of the differences between the housing boom of the mid 2000’s and today’s housing market.
21:50-26:21 As home prices rise, creating a “wealth effect” people can take equity from their homes. This equity however is false given that if more homes were on the market home prices would be far lower. Discussion of the law of small numbers and how it relates to the housing market.
26:21-29:50 Discussion of the lack of first time home buyers and the economic circumstances of millennials. Millennials are renting more than buying, reflecting a cultural change.
29:50-43:48 How the Fed’s and institutional investor intervention in the housing market removes true price discovery and market participation. Discussion on buying a home as a residence vs. as an investment. Don’t speculate where you live.
43:48-47:37 Who will buy US Treasuries when the Fed stops QE? Perhaps the EU? U.S. citizens under a mandatory myRA plan?
47:37- Credit tip of the week-cell phones and your credit score.
Mortgage Applications Fall to Twenty Year Low