September 2009
As yet another summer comes to a close, questions coninue on the economy. Can this “summer rally” in the stock market continue into the fall?
Some are wondering if this recovery will be a “V” or “W” shaped recovery? I will take a recovery in whatever letter shape it takes, but it is intriguing which of these it may occur, as it will affect stocks and earnings.
With over 84 banks closed so far this year, will this subside and thos remaining strenghten their financial position and start lending in earnest?
Will interest rates continue to hold in a relatively low pattern, with the 10YR Treasury in 3.50% range and 2YR Treasury below 1.00%? How much longer will the Fed and asia purchase our bonds and push rates lower?
FHA loans continue to be approximately 50% of originations this year and has caused issues within Ginnie Mae and HUD, since this volume is far beyond what they have handled in many years. One bad result was the suspension by FHA and ultimate failure of TB&W, which was a top 15 FHA originator.
Fears of inflation are creeping into conversations, but can this be offset by increasing home values and the value of servicing rights? But a major component is jobs and reducing unemployment, but where are all these jobs going to come from?