MBA Mortgage Purchase Applications UP 24% Since Same Week Last Year, Saul Center’s Funds From Operations (FFO) Continue To Tank

Mortgage applications increased 1.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 23, 2020.

The Refinance Index increased 3 percent from the previous week and was 80 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.2 percent from one week earlier. The unadjusted Purchase Index decreased 0.3 percent compared with the previous week and was 24 percent higher than the same week one year ago.

Well, the red line shows the increase in MBA Purchase Applications under President Trump.

On the home price front, Zillow expects the Case-Shiller HPI to increase from 5.7% to 6.6%.

On the down side, REITs such as Washington DC’s own Saul Centers is showing the decline in Funds From Operations (FFO) and share price since the Covid lockdowns began. Saul Centers (previously BF Saul) tanked by over 50%.

Real Capital Analytics Office value index shows the Covid decline.

Speaking of Saul Centers, here is its share price against Milano, Italy HQ’d COIMA RES S.p.A that acquires and manages real estate properties. Its the same all over the world.

Paul Krugman and Other Mainstream Trade “Experts” Admit They Were Wrong About Globalization (It Hurt American Workers And MZM Money Velocity)

Paul Krugman, Nobel Laureate in international trade and New York Times op-ed snarker, has finally admitted what many of his already knew: globalization hurt middle class workers more than they thought it would.

Globalization has been a hot topic in business schools since the 1980s, particularly since Bill Clinton favored the North American Free Trade Agreement. NAFTA was opposed by Presidential candidate Ross Perot who argued:

We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory south of the border, pay a dollar an hour for labor, … have no health care—that’s the most expensive single element in making a car—have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south. … when [Mexico’s] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it’s leveled again. But in the meantime, you’ve wrecked the country with these kinds of deal

In addition to losing middle-class jobs to Mexico and subsequent outsourcing of jobs to China, we have seen a perpetual decline in Money Velocity (GDP/Money Stock) since 1995.

The GINI ratio of US income inequality took a jump-up under Clinton and NAFTA. Although financialization contributed to income inequality as well.

Yes, globalization has helped suck jobs and wage growth out of the USA contributing to a decline in money velocity. So when snarky NY Times op-ed writer Paul Krugman admits that globalization is harmful to American workers (and money velocity), we better rethink what we are teaching in business schools.

Including over-reliance on The Federal Reserve to bail-out flawed Federal policies.

Where Will Mortgage Rates Be In Three Years? Hint: Right Where They Are Now Because The Fed Isn’t Going Anywhere Until 2023

One question that is often asked if “Where Will Mortgage Rates Be In Three Years?”

Take a look at Freddie Mac’s 30Y mortgage survey rate (white line) and M2 Money Velocity (green line). And then overlay The Federal Reserve Balance Sheet, pushing down the benchmark 10Y Treasury Note yield. It is clear that mortgage rates aren’t going up anytime soon.

Look at home price growth and The Fed’s balance sheet. As the Fed began shrinking its balance sheet in 2018 and then the Case-Shiller home price index growth rate started falling … then recovered as The Fed threw more gas on the fire.

Gold? There is also a positive relation to The Fed’s balance sheet.

The Fed isn’t going until at least 2023. So, The Fed is here to stay, distorting markets and prices.

Rock and roll, hoochie koo.

MBA Mortgage Refi Applications UP 8.23% WoW While Purchase Apps DOWN -1.42% (Mortgage Credit Availability Sinks)

I was watching Stuart Varney on Fox Business and he excitedly announced that MBA applications were up 4.56% WoW in the latest MBA report.

True, but applications for a purchase mortgage were down -1.42% WoW.

But refinancing application were up 8.23% WoW as mortgage rates continue to fall since the Covid outbreak.

Mortgage credit availability plunged as mortgage rates hit all-time low.

Alt-Econ Index Shows Better Economic Recovery Than Economic Indices Show (Dow Up 350 Points, Yield Curve Returns To Same Level As Two Days Ago)

After a period of economic weakness in August and September, the pace of recovery in most advanced economies gained traction in the past two weeks, though activity is still far below pre-Covid levels, according to Bloomberg Economics gauges that integrate high-frequency data such as credit-card use, travel and location information. Germany and Japan remain at the forefront of the recovery and activity has also increased in France, Italy, and Spain. After months of stagnation, the U.S. is now seeing its recovery pace accelerate, while Canada and the U.K. are now the worst-performing advanced economies BE is tracking.

The activity indexes are estimated using a dynamic factor model. This methodology extracts an unobservable latent common factor of the underlying high-frequency data in the spirit of Stock and Watson. The model is estimated with daily figures from Jan. 1, 2020 to Oct. 6, 2020.

The high-frequency data we’re using have some obvious advantages — providing a more timely read than traditional data series.

But while the ALT index is showing recovery, also with the Atlanta Fed GDPNow Q3 Forecast of 35.2%, Neel Kashkari argues for MORE stimulus.

(Bloomberg) — Federal Reserve Bank of Minneapolis President Neel Kashkari said more fiscal support was urgently needed to support the U.S. economic recovery, following President Donald Trump’s unilateral decision to halt talks for another round of aid.

“Whatever Congress can do with the executive branch — come together aggressively to put money in the hands of people who have lost their jobs and to support small businesses so that we don’t have this continuing wave of bankruptcies across the economy — it’s just vital that they move quickly, whatever they do,” Kashkari said in an interview Wednesday on CNBC.

Trump’s decision Tuesday to walk away from talks with Democrats amid differences over the size of another fiscal relief package — even though hours later he appeared to reverse course — likely ended the chances of a deal before the Nov. 3 election. The president’s announcement followed a speech by Fed Chair Jerome Powell earlier in the day in which he made one of his strongest appeals to date on the need for lawmakers to do more. (NOT ONLY ABOUT THE SIZE OF THE PACKAGE, BUT THE WAY FUNDS ARE DISTRIBUTED AND NEW VOTING RULES ENCOURAGING MORE EARLY VOTING AND MAIL-IN VOTING). AND BAILOUTS FOR STATE WORKER PENSION FUNDS.

The Dow Jones Industrial Average rose this morning after yesterday’s beating in the afternoon.

The Treasury actives and dollar swaps curves are back to normal.

Apparently Pelosi and Mnuchin met this AM about a stand alone bill.