2008-04-02 MBAVPRCH Index

MBAVPRCH Index (Mar 28)

Survey n/a
Actual 356.0
Prior 403.7
Revised n/a

Down this week, maybe a holiday issue. Looks looks like Q1 was in a lower range than Q4, but not all that bad.

Also, mortgage bankers have less capacity than previously, and banks are said to be gaining market share.


2008-04-02 MBAVREFI Index

MBAVREFI Index (Mar 28)

Survey n/a
Actual 2636.0
Prior 4255.2
Revised n/a

Refi’s have been coming in spikes. Not sure why.


2008-04-02 Challenger Job Cuts YoY

Challenger Job Cuts YoY (Mar)

Survey n/a
Actual 9.4%
Prior -14.2%
Revised n/a

This hasn’t been a reliable indicator but nonetheless seems to indicate a recession isn’t in the cards.


2008-04-02 ADP Employment Change

ADP Employment Change (Mar)

Survey -45K
Actual 8K
Prior -23K
Revised -18K

ADP flattish, and last month revised up a bit.

Friday’s payroll number could be much the same: last month revised up some, and current month a bit higher than expected.

The overall trend is to less job creation, but the labor force participation rate has also been falling and keeping reported unemployment in check.

But it doesn’t matter anymore.

Employment is now going to be treated as a ‘rear view mirror’ issue and not ‘forward looking’

Same with losses to be reported by the financial sector.

Economics risks are now to the upside.

If housing doesn’t fall by another large chunk and further subtract from GDP, the Fed is left with an output gap not nearly large enough to forecast inflation coming back to target levels, without also including rate hikes in its internal forecasts (rate forecasts are not released). (The Fed’s long term inflation forecasts are necessarily at their target levels, as those forecasts include ‘appropriate monetary policy’ to hit those targets.)

Without a lot more weakness than current conditions indicate, markets will anticipate the Fed is unlikely to keep rates at current levels.

Meanwhile, current levels of demand for crude are more than sufficient for the Saudis to continue as swing producer/price setter.

And the foreign sector is still in the process of reducing their rate of accumulation of USD financial assets as evidenced by the falling trade gap, falling USD, and rising US exports.


2008-04-02 Factory Orders

Factory Orders (Feb)

Survey -0.8%
Actual -1.3%
Prior -2.5%
Revised -2.3%

2008-04-02 Factory Orders YoY

Factory Orders YoY (Feb)

Survey n/a
Actual 6.0%
Prior 7.9%
Revised n/a

Pretty good up trend in progress here.

4 Responses

  1. “The overall trend is to less job creation, but the labor force participation rate has also been falling and keeping reported unemployment in check.

    But it doesn’t matter anymore.

    Employment is now going to be treated as a ‘rear view mirror’ issue and not ‘forward looking’

    Same with losses to be reported by the financial sector.

    Economics risks are now to the upside.”

    Warren, what abou the credit cycle. Aren’t we in the early stages of it with CRE and Commercial losses still closer to there trough than their peak. Also consumer credit losses ex-mortgage are still very low versus where they typicallu end up in a down turn.

  2. Seems to me the real economy my escape with minor damage this time around, with fiscal and exports providing the safety net, at least for now.

    So my definative answer is a definate maybe.

  3. “Refi’s have been coming in spikes. Not sure why.”

    I’ve heard, from a broker at IMB, that a flow of funds comes from Asian markets each time the markets there collapse. Those flows fill the pipe for refi’s in as little as 3 hours and then are gone.

    The spikes may corrospond with market downturns elsewhere.

    Eyeball the HSI

    http://finance.yahoo.com/q/ta?s=%5EHSI&t=3m&l=on&z=m&q=l&p=&a=&c=

  4. the mtg banker’s numbers are for homeowners applying for loans to refinance their existing mtgs.

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