Saturday, July 13, 2013

That's the news July 13, 2013

I decided to try posting this just once a week, but I'm not thrilled, so perhaps I'll go back to the occasional posting.

Monday, July 8, 2013

Bitcoin ATM Gets Ready for Roll Out
The device boasts the ability to change fiat currencies into the crypto-currency in just 15 seconds and accepts notes from over 200 countries around the world.
So now we have the ability to transform actual currency into play money at ATMs worldwide.  Of course, some people would call "actual currency" play money as well.  I'm just not sure why they accept actual currency in exchange for play money, if the play money is supposed to somehow be better.  Clearly, I'm missing something here, so anyone that wants to explain it, feel free to comment.

Stocks rise, dollar pulls back from 3-year high
A Reuters poll conducted after the release of Friday's government payrolls data -- which showed U.S. employers added 195,000 jobs in June -- found more than half of the major Wall Street bond firms surveyed expected the Fed would reduce its $85 billion monthly purchases of Treasuries and mortgage-backed securities in September.
At least the market is responding as if this is good news for once.  I'm not sure why bond yields would fall though.  Seems to me that would be the one place investors wouldn't want to have their money.  Well, one of the places.  Others are dollar denominated commodities like oil, probably gold, and bitcoins.

It’s Not Just Thomson Reuters – Elite Investors Get Tons of Unfair Advantages: Blodget
Blodget doesn’t expect the decision will do small investors any good. “The market will never, ever be safe for the little guy,” says Blodget. “So anything we do that makes it appear a little bit safer…is actually worse because then people think they are on the same playing field as the little guy.”
Finally, somebody says what has always been true.  But of course, it won't do any good.  People will still rush to put their money in whatever Warren Buffet already has his money in.  They won't get the same deal as Mr. Buffet.  It likely won't be a good investment for "the little guy."  The most important thing to remember is, the stock market isn't safe.  Higher returns result from higher risk

Wednesday, July 10, 2013

 'About half' of Fed officials expect QE3 to end this year
About half of Federal Reserve officials expect that economic conditions will be appropriate to not only taper, but end QE3 entirely this year, according to minutes from the central bank's June meeting, released Wednesday.
I'm not exactly sure when these guys decided that 6.5% unemployment was probably an unrealistic target, but it appears they have.  Unfortunately, I didn't see anything in this article that said why they thought it would be "appropriate" to end QE3 this year.  The only thing that comes to mind is that real estate has been looking, well, "bubbly" lately, although there are plenty of reasons to think there is no real estate bubble as well.  When I look at a chart of home prices, though, it certainly looks as if there is significant downside to real estate, as if the government and the Fed basically put a floor under the housing market.  I'm just not sure how secure that floor is.

MBA: Mortgage Refinance Applications Decline as Mortgage Rates Increase in Latest Weekly Survey
Note: This was for a holiday week with a large seasonal adjustment. I expect a large decline in refinance activity in the survey next week.
So, here's a little speculation about the Fed's coming actions.  With the market's reaction to the rumors about Fed tapering resulting in higher mortgage rates and falling mortgage applications, it will suddenly be "appropriate" to continue with QE.

The Housing Unrecovery: Mortgage Application Drought Continues
and as a reminder... this DOES impact affordability - no matter how much your friendly local realtor or mortgage broker tries to explain still-generational-low mortgage rates - it's simply all about the marginal move...
Which is right in line with what I've been thinking.  Unless, of course, people still remember that home prices are still quite high compared to where they "should" be.  We just need Mr. Bernanke to stay the course, so that people will forget about how high home prices are, and this will become the new normal.  But by then, ultra-low interest rates will also be the new normal and people will accept nothing higher.  Maybe.

Saturday, July 13, 2013

Are Banks and Housing About to Get Crushed by Rising Rates?
"In May, the banks had no idea where rates were going, and so they're going to tell us now where they think they're going to go in August," he says, before labeling the highly complex and qualified earnings reports from banks a ''best guess."
I don't actually care where banks think interest rates will be in August.  At least not 2013 anyway.  I want to know where they'll be in a year or two.

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