Morning Report: Finally a decent 10 year auction.

Vital Statistics: Stocks are higher as we await a slew of Fed-speakers. Bonds and MBS are down. Initial Jobless claims were flat at 217k last week. Jerome Powell speaks today at 2:00 pm. Yesterday’s speech didn’t have much to say about policy or the economy. Wells Fargo sees some cracks emerging in the US economy and forecasts a recession in 2024. Regarding mortgage rates: “We forecast mortgage rates will trend lower next year, especially if the Federal Reserve cuts its policy rate around mid-2024 as we currently expect. Although we do not envision a return to sub-5% mortgage rates during our forecast horizon, these incremental improvements would likely reinvigorate homebuyer demand and produce a better outturn for residential investment in 2024 than in 2023.” The 10 year auction went off yesterday without a hitch. The bid / cover ratio was 2.45, and yields fell a touch after the results. The Fed Funds futures now see a less-than-10% chance of a rate hike in December, and a 18% chance of a rate cut at the March meeting. More evidence of disinflation – used cars. The Mannheim index of used car prices fell 2.3% in October. “October revealed some not-so-spooky price moves, namely a reversal of the gains that were seen during the prior two months,” said Chris Frey, senior manager of Economic and Industry Insights for Cox Automotive. “This confirms the caution that was mentioned last month The UAW strike, avoiding one action that could have led to higher wholesale prices. October’s price decline is eerily similar to last October’s 2.2% drop, and this was not unexpected as the market remains balanced. Wholesale vehicle values typically experience some modest increases during the holiday season, and with two months remaining, we could see some upward price movements.” Autos have been a key component of inflation over the past couple of years. Combine the payment shock associated with rising interest rates and you have an outsized negative effect on consumer sentiment. I did a quick interview with Marc Biron of Home Diversification. Hi Marc, tell us what Home Diversification is Home Diversification efficiently diversifies the homeowners’ typically largest and totally concentrated investment – their homes. homeowners swap the price performance of their home for nationally diversified price performance. The swaps are held in a Special Purpose Vehicle, or pool. This structure effectively guarantees the homeowners in the pool nationally diversified home price performance, less expected immaterial pool credit losses – .05% annually per an article published in the Real Estate Finance Journal co-authored with the leading academic expert on housing finance. Diversification eliminates the tail risk of home price declines, thereby eliminating most of the credit risk per the published article. How does Home Diversification help out borrowers? Because of the very substantial reduction in credit losses, borrowers benefit from enabling down to zero downpayment, no PMI and flexible credit terms. An important additional benefit to homeowners is free home value protection, or nest egg protection. Per the published article, home value protection is valued at around $50,000 for an average home, captured at the stroke of a pen. Home diversified mortgages are like a VA loan for anyone, but much better. How does Home Diversification help out lenders? Because of the amazing benefits to borrowers, loan originators benefit from expected substantial volume increases and higher gain on sale margins. Early adopters will also differentiate themselves from competitors by offering this substantially attractive home diversified mortgage product. Note that some originators have questioned why they would offer anything else, and why their borrowers would want anything else – suggesting a possible category killer mortgage. Loan investors benefit from essentially all the volume they care to handle at wider credit spreads, and with effectively zero credit risk as the very low expected credit losses are absorbed by the pool of homeowners/borrowers. In theory, and really in practice, every homeowner should diversify their typically largest and entirely concentrated investment, and all mortgages should be home diversified. The substantial benefits of home diversification to borrowers, loan originators and loan investors results from the power of diversification, termed “the only free lunch in Economics.” How should people learn more about your product? Contact info is Marc Biron at 603-493-3654. I am accepting ads for this blog if you would like to make an announcement, highlight something your company is offering or want more visibility. I am running a special for new clients as well. I offer white-label services which give you the ability to use this content for your own daily emails. The blog has thousands of subscribers / followers and an open rate around 50%. Please feel free to reach out to brent@thedailytearsheet.com if you would like to discuss this further. [Image] Here are Some More Investing Tips and Resources. Enjoy! Sponsored [Click here to reserve your seat now!]( style=) [Morning Report: Finally a decent 10 year auction.]( Vital Statistics: Stocks are higher as we await a slew of Fed-speakers. Bonds and MBS are down. Initial Jobless claims were flat at 217k last week. Jerome Powell speaks today at 2:00 pm. Yesterday’s speech didn’t have much to say about policy or the economy. Wells Fargo sees some cracks emerging in the US economy and forecasts a recession in 2024. Regarding mortgage rates: “We forecast mortgage rates will trend lower next year, especially if the Federal Reserve cuts its policy rate around mid-2024 as we currently expect. Although we do not envision a return to sub-5% mortgage rates during our forecast horizon, these incremental improvements would likely reinvigorate homebuyer demand and produce a better outturn for residential investment in 2024 than in 2023.” The 10 year auction went off yesterday without a hitch. The bid / cover ratio was 2.45, and yields fell a touch after the results. The Fed Funds futures now see a less-than-10% chance of a rate hike in December, and a 18% chance of a rate cut at the March meeting. More evidence of disinflation – used cars. The Mannheim index of used car prices fell 2.3% in October. “October revealed some not-so-spooky price moves, namely a reversal of the gains that were seen during the prior two months,” said Chris Frey, senior manager of Economic and Industry Insights for Cox Automotive. “This confirms the caution that was mentioned last month The UAW strike, avoiding one action that could have led to higher wholesale prices. October’s price decline is eerily similar to last October’s 2.2% drop, and this was not unexpected as the market remains balanced. Wholesale vehicle values typically experience some modest increases during the holiday season, and with two months remaining, we could see some upward price movements.” Autos have been a key component of inflation over the past couple of years. Combine the payment shock associated with rising interest rates and you have an outsized negative effect on consumer sentiment. I did a quick interview with Marc Biron of Home Diversification. Hi Marc, tell us what Home Diversification is Home Diversification efficiently diversifies the homeowners’ typically largest and totally concentrated investment – their homes. homeowners swap the price performance of their home for nationally diversified price performance. The swaps are held in a Special Purpose Vehicle, or pool. This structure effectively guarantees the homeowners in the pool nationally diversified home price performance, less expected immaterial pool credit losses – .05% annually per an article published in the Real Estate Finance Journal co-authored with the leading academic expert on housing finance. Diversification eliminates the tail risk of home price declines, thereby eliminating most of the credit risk per the published article. How does Home Diversification help out borrowers? Because of the very substantial reduction in credit losses, borrowers benefit from enabling down to zero downpayment, no PMI and flexible credit terms. An important additional benefit to homeowners is free home value protection, or nest egg protection. Per the published article, home value protection is valued at around $50,000 for an average home, captured at the stroke of a pen. Home diversified mortgages are like a VA loan for anyone, but much better. How does Home Diversification help out lenders? Because of the amazing benefits to borrowers, loan originators benefit from expected substantial volume increases and higher gain on sale margins. Early adopters will also differentiate themselves from competitors by offering this substantially attractive home diversified mortgage product. Note that some originators have questioned why they would offer anything else, and why their borrowers would want anything else – suggesting a possible category killer mortgage. Loan investors benefit from essentially all the volume they care to handle at wider credit spreads, and with effectively zero credit risk as the very low expected credit losses are absorbed by the pool of homeowners/borrowers. In theory, and really in practice, every homeowner should diversify their typically largest and entirely concentrated investment, and all mortgages should be home diversified. The substantial benefits of home diversification to borrowers, loan originators and loan investors results from the power of diversification, termed “the only free lunch in Economics.” How should people learn more about your product? Contact info is Marc Biron at 603-493-3654. I am accepting ads for this blog if you would like to make an announcement, highlight something your company is offering or want more visibility. I am running a special for new clients as well. I offer white-label services which give you the ability to use this content for your own daily emails. The blog has thousands of subscribers / followers and an open rate around 50%. Please feel free to reach out to brent@thedailytearsheet.com if you would like to discuss this further. [Continue Reading...]( [Morning Report: Finally a decent 10 year auction.]( And, in case you missed it: - [Coca-Cola EuroPacific Partners is a tasty play on Coke]( - [Equity Shares: A Path to Profit in Asia’s Volatile Markets]( - [Navigating the Stock Market Rally: Key Insights]( - [Hilarium ICO Unveiled: The Game-Changing Crypto Ecosystem]( - [Upcoming Alphr.Finance ICO (ALPHR) Is Very Hot. Why’s That?]( - FREE OR LOW COST INVESTING RESOURCES - [i]( [i]( [i]( [i]( Sponsored [Claim Your Free Report on the #1 Buy and Hold Stock of 2023!]( Are you ready to uncover the most promising investment opportunity of 2023? Look no further! This in-depth analysis provides valuable insights into the stock that has captured the attention of seasoned investors worldwide. 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