Author: Brian Honea October 7, 2014
Many housing and mortgage industry professionals believe that the overall outlook for their business in the next six months is “grim,” according to the Collinwood Group Mortgage Industry Outlook Report.
The report, which was published on Tuesday, was the first-ever such report published by the Collingwood Group. The Washington, D.C.-based advisory firm will be conducting a monthly survey of mortgage and housing industry professionals to report on the state of the business.
Only 30 percent of mortgage industry professionals surveyed for the report believe that business conditions will be better in the next six months, while 41 percent said conditions will stay the same and 29 percent said they believe conditions will be worse. Fifty-nine percent of respondents said their current business conditions were worse in September than they were at the same time last year.
Only 2 percent of respondents said they believe it is extremely likely that the housing market will improve in the next six months. One reason for the bleak outlook is the effect of regulation on the housing and mortgage industries, which has been increasing since 2010 and especially in the last year, forcing businesses to devote more and more resources toward compliance, the Collingwood Group report said.
“The implementation of the Consumer Financial Protection Bureau (CFPB) origination and servicing rules have exposed lenders to host of new compliance demands and risks,” the report said. “The challenges lenders are managing are exasperated by the increased level of federal, state and local government enforcement activities. The results of the survey suggest that this is having a strong impact on businesses’ bottom lines.”
Only 9 percent of respondents reported that the pace of regulation has had little or no effect on their business, while 19 percent said the pace of regulation has had an extreme impact. In all, 78 percent of housing and mortgage professionals surveyed said that increased regulation has hurt their business in some way.
“The results of our first survey indicate a pretty grim outlook for the next six months,” Collingwood Group Chairman Tim Rood said. “The fast pace of regulatory enforcement is a 1-2 punch for many lenders.”
The effect of increased regulation has spilled over into consumers. In many cases consumers have been prevented from obtaining a mortgage loan, since the increased regulation has forced the industry in general to tighten credit availability. Seventy percent of survey respondents said they believe there is a high to extremely high correlation between regulation and the need to tighten mortgage credit.
“Many lenders are torn between making credit available to lower credit score borrowers and mitigating exposure to regulatory risk,” said Brian Montgomery, Collingwood Vice Chairman and former Acting United States Secretary of Housing and Urban Development and Commissioner of the Federal Housing Administration.
As far as the need to strike a delicate balance between maximizing loan volume and minimizing risk, brought on by increased regulation, many lenders have chosen minimizing risk. Thirty-seven percent of respondents ranked their likelihood of lowering credit score requirements to obtain a mortgage either a five or six on a scale of one to 10, indicating a neutral opinion.
Thursday, October 09, 2014
by Mike Adams, the Health Ranger
(NaturalNews) A surprisingly large number of sectors of the U.S. economy depend on what I call “public faith in the safety of crowds.” Tourism, commercial air travel, restaurants, sporting events and even public transportation all depends on the public believing that coming into close contact with other people is a relatively safe activity. (Which it is, for now…)
If that belief in the safety of crowds is shattered, the public’s unwillingness to risk their health and lives will lead to a rapid revenue implosion among numerous sectors of the economy.
This shattering of faith can happen literally overnight in local regions. For example, the “patient zero” announcement in Dallas, Texas already resulted in me personally hearing comments from people who delayed their plans to visit Dallas until the 21-day “observation” period passes for those who came into contact with Duncan. After all, they were power-washing Thomas Duncan’s vomit from the sidewalk in front of his apartment while pedestrians meandered by, and none of the sidewalk cleanup workers were wearing any protective gear whatsoever. (Has everybody suddenly forgotten that Ebola is a level-4 biohazard strain?)
Whether such concerns about visiting Dallas are rational or otherwise is beside the point: they are real concerns in the minds of the people, and it is the people who make all economic decisions. (Economics, ultimately, is the study of human behavior.)
World Bank warns about economic consequences of Ebola outbreaks
“[Ebola has the] potential to inflict massive economic costs on Guinea, Liberia, and Sierra Leone and the rest of their neighbors in West Africa.” — Jim Yong Kim, President of the World Bank Group 
While the CDC appears to have this outbreak contained in Dallas, no one believes this will be the last case of Ebola in the United States. Should the virus spread in some other city — New York, Denver, Los Angeles, Miami, Houston, Chicago — it would immediately cause many people to start questioning the safety of visiting the named city. And if the outbreak begins to spread in a way that appears to be uncontrolled, it would convince a steadily-increasing number of people to avoid all the local activities where people might catch a disease that we now know can be spread via indirect contact.
Air travel to and from the city would suffer a sharp decline in business, and all the local businesses that depend on people gathering in crowds — restaurants, gyms, sporting events, concerts and more — would begin to slide toward bankruptcy.
I explain all this in great detail in Episode 13 of Pandemic Preparedness at www.BioDefense.com (with free downloadable MP3 audio chapters).
09 Oct, 2014 by Dave Hodges
The New York Times makes an excellent point when the newspaper recently stated “The widening Ebola epidemic in West Africa — combined with the fears generated by an Ebola patient who carried the virus to Dallas — have led to calls for the United States to screen travelers when they reach American airports. That is a reasonable defensive tactic if done judiciously, although it is unclear if that would have stopped the Liberian man, who carried the virus to Dallas
before developing symptoms”. In a nutshell, this globalist mouthpiece of a newspaper has clearly defined the issue. THE ONLY WAY TO PREVENT MORE EBOLA FROM BEING BROUGHT INTO THE COUNTRY IS TO BAN TRAVELERS FROM WEST AFRICA FROM ENTERING THE UNITED STATES WITHOUT GOING THROUGH A QUARANTINE LASTING 21 DAYS. Only in this matter, can we stop depending on unreliable self-reports.
This obvious fact is that President Obola and John Kerry want Ebola to spread to the U.S. Some of the public are beginning to take notice.
And let us not forget that is was only two weeks ago that our magnificent President stated that Americans have nothing to fear because Ebola would never come to the United States.
“I am confident that Ebola will not come to the United States”.
The Ebola Pandemic Potential In the US Is Grim
Any journalist would tell you that whenever a microphone is in the area, one must assume the microphone is “hot”, meaning that conversations thought to be private, may become very public. CBS’ Major Garrett learned that lesson the hard way yesterday.
Even Major Garrett, Senior White House Correspondent for CBS, is frightened of Ebola. Major Garrett responded, toa based comment about Ebola by saying simply, “Yeah, we’re screwed.” Unfortunately for Garrett, a microphone was on. The other unidentified MSM media colleague, depicted in the video, obviously do not believe the President Obola inspired press releases, that they are forced to read on the air every night while broadcasting the corporate controlled news, are accurate. Even these MSM reporters want a travel ban on flights from West Africa. If one ever needed a reason to turn off CNN, Fox, MSNBC, CBS and ABC, this is it!
By MATT KIBBE
Americans know that there is a serious problem in the economy. Incomes are stagnant, and the employment situation is not improving in a meaningful way. In fact, according to new Census data, average American incomes remained virtually unchanged in 2013 and were actually 7% lower than in 2007 after adjusting for inflation. And yet, GDP continues to rise, and we are assured by the administration that the economy is in recovery. So what’s really going on here? A look at the data is revealing. Until 1999, GDP and income growth tended to move together. But since the turn of the millennium, incomes have remained flat while GDP has continued to rise, according to an analysis from the New York Times. Observing the peaks and valleys of the income line leads to some interesting conclusions. In 1999, a major worry facing Americans was a pesky computer glitch, known as the Y2K bug, that many feared would destabilize financial markets and banking systems. While none of this actually happened, the Federal Reserve, then headed by Alan Greenspan, responded with aggressive monetary expansion, increasing the country’s cash reserves by about one-third.
After the recession in 2001, partially (but only partially) brought on by the Sept. 11 attacks, the Fed continued to increase the money supply and incomes continued to decline. It was only when this expansionary monetary policy tapered off that incomes began to rise again in the runup to 2007.
Of course, 2007 brought the collapse of the housing bubble, and the response was still more stimulus. This time, they called it “quantitative easing.” When the economy failed to improve, the Fed implemented QE2 followed by QE3, continuing to flood markets with easy money and further devaluing the currency in the process.
If you look at the difference between GDP and income growth after 2007, GDP continues to rise, while incomes actually fall with time. The peaks and valleys in real income growth correspond well to aggressive action from the central bank, and while the economy is too complex a system to be explained by a single cause, the correlation is one well worth taking note of. Some argue that a lack of observed inflation means that there is nothing to worry about in what the Fed is doing, but inflation can show up in many places other than consumer prices. The Dow Jones has continued to rocket skyward, even as incomes and employment have remained flat, and commodity prices have shown signs of price bubbles that may soon burst. The high prices one would expect from massive monetary expansion are out there, they are just hiding in specific sectors of the economy, waiting to spill over into consumer prices. There are also structural problems in the economy that contribute to the problem of income stagnation. There is a mismatch of skills between workers and employers that is being exacerbated by the misdirection of resources resulting from artificially low interest rates. There are always winners and losers when government intervenes in the economy. In this case, the winners are fat-cat bankers and politicians. The losers are everyone else.
This is why country club Republicans are content to pretend this problem doesn’t exist, while Democrats increase their calls for forcible redistribution of wealth. Neither of these approaches comes close to addressing the real problem: the Fed’s easy-money policies. Real investment comes only from surplus value created by production. It doesn’t come from people taking out more loans at lower and lower interest rates. All this does is create distortions in the economy that hinder actual growth.
This is not a new idea. F.A. Hayek won a Nobel Prize for developing this theory of business cycles in 1974, and the Austrian school of economics had been warning about the dangers of artificial credit expansion for nearly a century before that. Still, today the Federal Reserve remains one of the most powerful and unaccountable institutions in the world. But it doesn’t have to be. For the second time in the last three years, the House just overwhelmingly voted to audit the Fed and demand some degree of transparency in one of America’s most secretive agencies.
When this bill passed the House in 2012, Majority Leader Harry Reid refused to bring it to a vote in the Senate, despite having repeatedly gone on record in support of a Fed audit. He shouldn’t be allowed to duck responsibility a second time. Anyone who is concerned about the economic stagnation in America, either on the left or the right, should demand accountability from the agency that wields tremendous power with very little transparency. The middle class deserves better than to watch their money waste away in the interest of propping up the nation’s biggest banks.
October 8, 2014 | By Michael Snyder
For the moment, our top public health officials are quite adamant that there absolutely will not be a major Ebola outbreak in the United States. But what if they are wrong? Or what would happen if terrorists released a form of weaponized Ebola or weaponized small pox in one of our major cities? What would such an event do to our economy? I think that we can get some clues by looking at the economic collapses that are taking place in Liberia, Guinea and Sierra Leone right now. When an extremely deadly virus like Ebola starts spreading like wildfire, the fear that it creates can be even worse for a society than the disease. All of a sudden people don’t want to go to work, people don’t want to go to school and people definitely don’t want to go shopping. There are very few things that can shut down the economy of a nation faster. Considering the fact that our big banks are being more reckless than ever, we better hope that we don’t see a “black swan event” such as a major Ebola outbreak come along and upset the apple cart. Because if that does happen, our Ponzi scheme of an economy could implode really quick.
Right now there is just one confirmed case of Ebola in Texas. If they isolated him before he infected anyone else, we might be okay for the moment. But already we are being told that there may be ” a possible 2nd Ebola victim” in Dallas…
Health officials are closely monitoring a possible second Ebola patient who had close contact with the first person to be diagnosed in the U.S., the director of Dallas County’s health department said Wednesday.
All who have been in close contact with the man officially diagnosed are being monitored as a precaution, Zachary Thompson, director of Dallas County Health and Human Services, said in a morning interview with WFAA-TV, Dallas-Fort Worth.
“Let me be real frank to the Dallas County residents: The fact that we have one confirmed case, there may be another case that is a close associate with this particular patient,” he said. “So this is real. There should be a concern, but it’s contained to the specific family members and close friends at this moment.”
By Bill Holter
Friday was Non farm payroll day with an announced 248,000 new jobs created in September, the unemployment rate dropped to 5.9%. This is the lowest unemployment rate since 2008 so it “looks” like we have recovered and the financial crisis should only be a bad memory. I am going to tell you we are living in a financial mirage.
In September, if you look under the hood you will also see 315,000 no longer included in the labor force bringing the total up to 92.6 million people. Looking back to 2008, there were 78 million “not in the labor force” so we can see a nearly 15 million person increase in this category since then. We also had an “adjustment” of a negative 26,000 jobs subtracted to arrive at the 248,000 figure, so if believable the real job growth was 274,000. “Believable”? Not by me, here is Paul Craig Roberts take More Bad News From The Jobs Front — Paul Craig Roberts. My point is this, there are 15 million more people “not working” since 2008 but for “appearance sake” are categorized as “not in the workforce” or not looking for a job. Doing some very simple math, what do these 15 million represent? Somewhere between 4% and 5% of the entire U.S. population, that’s what!
So we have the “lowest” unemployment since 2008 at 5.9% and this headline will be splashed all over the headlines that say “happy times are here again!”. Before doing the very difficult math of “how much does 5.9 + four or five equal?”, I would like to point something out. We are now about 30 days away from the national midterm elections, could the unemployment rate have been “engineered” downward to paint a rosy picture so the balance of power in the Senate remains Democrat? This was the very last employment number the public will see before they “vote early and vote often”. OK, I know you were dying to do the math, 5.9% plus either four or five percent equals either 9.9% or 10.9% … Of course, if unemployment was calculated the way it was back in the 1980’s we would have a figure approaching 20% but that would be totally unacceptable for the financial mirage we are living.
Published on Oct 2, 2014
A long term secular bear market in the housing market began in 2005. The Fed and Government were able to engineer a short dead-cat bounce using in excess of $2 trillion in stimulus. This video shows that the momentum behind the dead-cat bounce has stalled and explains why the housing market is going to go lower from here.
At the height of the financial crisis in 2008 the U.S. government forced some of the countries largest banks to take “bailout” funds amounting to billions of dollars in order to keep them from going bankrupt. It was a move designed to not only keep too-big-to-fail financial institutions afloat, but one that would inspire confidence and keep American consumers spending. As a result, the last several years have seen stock markets reach record highs with Americans continuing to rack up personal debt for real estate, vehicles, education, and consumer goods as if the financial crisis never happened.
But the purported recovery may not be everything that government officials and influential financial leaders have made it out to be.
Recent comments delivered by Federal Reserve Vice Chairman Stanley Fischer suggest that not only are global and domestic economies still struggling, but the U.S. government itself is preparing financial contingency plans in anticipation of another widespread economic event.
However, this time around, according to Fischer, the government won’t be bailing out financial institutions in need of cash. Instead, failing banks will turn directly to their unsecured creditors when they need money. And within this context, that means you.
The recession that began in the United States in December 2007 ended in June 2009. But the Great Recession is a near-worldwide phenomenon, with the consequences of which many advanced economies continue to struggle. Its depth and breadth appear to have changed the economic environment in many ways and to have left the road ahead unclear.
Work on the use of the resolution mechanisms set out in the Dodd-Frank Act, based on the principle of a single point of entry–though less advanced than the work on capital and liquidity ratios–holds the promise of making it possible to resolve banks in difficulty at no direct cost to the taxpayer.
As part of this approach, the United States is preparing a proposal to require systemically important banks to issue bail-inable long-term debt that will enable insolvent banks to recapitalize themselves in resolution without calling on government funding–this cushion is known as a “gone concern” buffer.