Skip to comments.The Thrill is Gone: Mortgage Refi Applications Drop, SP500 Falls Below QE3 Announcement Level
Posted on 10/10/2012 11:21:19 AM PDT by whitedog57
As BB King sang, The Thrill is Gone from QE3.
According to the Mortgage Bankers Association, mortgage applications decreased -1.21% in the latest survey of mortgage lenders.
The Refinance Index decreased 2 percent from the previous week. However, the general mortgage refinancing trend continues.
The seasonally adjusted Purchase Index increased 2 percent from one week earlier. This is a continuation a trend of mortgage purchase applications rising in the Fall. But mortgage purchase applications still remain in a box.
This is somewhat amazing given the 12 million people on unemployment, and millions on disability and foodstamps. And the JOLTS Job Openings report shows job opening at the same level as February 2012.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.56 percent from 3.53 percent, with points increasing to 0.39 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The 30 year contract rate increased for the first time after declining for six consecutive weeks.
Even though the 30 year effective mortgage rate rose slightly, it is still near its all-time low. But in terms of the Fannie Mae 30 year Current Coupon over the 10 year Treasury yield, it has stabilized at 34 basis points, far below the near 100 basis point spread from earlier this year.
And alas, the S&P 500 stock index fell to below its level when QEternity was announced on September 13th.
QE3 certainly hasn’t delivered the goods as Bernanke had hoped!
The tax holiday idea that Rush had might have worked but how anyone thinking that shovelling money to the banks would fix this is beyond me.
The ongoing Fed printing is doing exactly what was intended: debasing the US dollar in favor of well-connected elites.
“how anyone thinking that shovelling money to the banks would fix this is beyond me.”
Taking the toxic mortgages off the banks hands at the rate of $40 Bil a month is what it is about.
That, and preventing the collapse until AFTER Obama is reelected.