<![CDATA[Hedgehogs.net: '' related content]]> http://www.hedgehogs.net/tag/subprime+mortgage+crisis?view=rss http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11299923/regional-banks-reporting-as-homebuying-season-starts Mon, 14 Apr 2014 23:29:51 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11299923/regional-banks-reporting-as-homebuying-season-starts <![CDATA[Regional Banks Reporting As Homebuying Season Starts]]> Fifth Third Bancorp (FITB), KeyCorp (KEY) and PrivateBancorp (PVTB) are on tap for Thursday. Pittsburgh-based PNC, the nation's second-largest ...

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11299800/all-mortgage-rates-decrease-time-to-apply-for-a-mortgage Mon, 14 Apr 2014 12:13:03 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11299800/all-mortgage-rates-decrease-time-to-apply-for-a-mortgage <![CDATA[All Mortgage Rates Decrease â Time To Apply For A Mortgage?]]>

This week mortgage applications decreased 1.6% compared to the previous week while purchases have increased 3%. Now that spring is here, the amount of homes sales, and thus mortgages, are going to increase substantially since the cold winter weather is ending.

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11299540/law-firm-weil-hires-goldman-sachs-managing-director Mon, 14 Apr 2014 06:51:43 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11299540/law-firm-weil-hires-goldman-sachs-managing-director <![CDATA[Law Firm Weil Hires Goldman Sachs Managing Director]]> 11299540 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298648/desperate-need-for-homes-on-sale Sun, 13 Apr 2014 18:20:37 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298648/desperate-need-for-homes-on-sale <![CDATA['Desperate need' for homes on sale]]> 11298648 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298636/video-desperate-need-for-homes-to-sell Sun, 13 Apr 2014 18:20:27 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298636/video-desperate-need-for-homes-to-sell <![CDATA[VIDEO: 'Desperate need' for homes to sell]]> 11298636 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298552/activist-hedge-funds-outperform-traditional-equity-hedgefunds Sun, 13 Apr 2014 15:01:05 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298552/activist-hedge-funds-outperform-traditional-equity-hedgefunds <![CDATA[Activist Hedge Funds Outperform Traditional Equity Hedge Funds]]>

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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298508/rbc-capital-markets-names-sole-head-in-europe Sun, 13 Apr 2014 11:31:13 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298508/rbc-capital-markets-names-sole-head-in-europe <![CDATA[RBC Capital Markets names sole head in Europe]]> 11298508 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298405/jpmorgan-earnings-drop-185-slowdown-in-housing-the-real-killer-start-of-mean-reversion-in-earnings Sun, 13 Apr 2014 05:30:57 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298405/jpmorgan-earnings-drop-185-slowdown-in-housing-the-real-killer-start-of-mean-reversion-in-earnings <![CDATA[JPMorgan Earnings Drop 18.5%; Slowdown in Housing the Real Killer; Start of Mean Reversion in Earnings?]]>
The New York Times reports JPMorgan Earnings Fall 18.5% on Slowdown in Trading and Mortgage Lending
JPMorgan Chase reported an 18.5 percent slump in first-quarter earnings on Friday, as the nation’s largest bank grappled with dual challenges: sluggish revenue from trading and lackluster mortgage lending.

The bank’s stock dropped when the market opened on Friday morning, falling more than 4 percent.

Part of the slowdown came from a slowdown in revenue from fixed-income trading, which fell roughly 26 percent to $3.76 billion from $4.75 billion a year earlier. 

JPMorgan’s earnings also contained a number of bright spots, including an increase in average loan balances within the commercial banking business, along with an uptick in auto loans. Auto loans grew by 3 percent, to $6.7 billion from $6.5 billion a year earlier. Private banking was another rosy area for the bank, with revenue rising to $1.5 billion, up 4 percent from the same period last year. Credit card sales volume also grew, up 10 percent to $104.5 billion from the same period last year.

Still, the strength of those businesses could not completely offset the continued decline in trading revenue and mortgage refinancing, which had once been a particularly robust source of profit for JPMorgan and its rivals.

Now, the heady days of refinancing seem distant. Rising interest rates, coupled with an increase in housing prices, have damped homeowners’ appetite to refinance. Mortgage loan originations also dropped to $17 billion, down 68 percent from a year earlier, and 27 percent from the previous quarter. That helped push net income down by $559 million to $114 million for the first quarter.

Asked whether the fall in mortgage loan originations might prompt the bank to broaden its lending to a wider swath of people — even those with tarnished credit scores — Mr. Dimon said on Friday that “our credit standards are pretty consistent.” He added, “We feel pretty good about the risk that we are taking.”

The comment reflects a deep timidity among the banks, which have focused their lending almost exclusively on borrowers with good credit. In part, the banks are reluctant to take on risk and are skittish about exposing themselves to litigation related to any questionable mortgages.
The Financial Times reports JPMorgan Misses Targets as Fixed Income Hit
JPMorgan Chase had its worst start to the year in fixed income trading since the depths of the financial crisis, causing the largest US bank to report a sharp decline in profits.

Revenues from trading bonds, currencies and commodities fell 21 per cent in the first quarter to $3.8bn, compared with the same period in 2013.

The first quarter is traditionally strong and the weak result – the worst since the start of 2008 – reverberated across Wall Street ahead of next week’s results at Citigroup, Bank of America, Morgan Stanley and Goldman Sachs.

Earnings per share fell to $1.28 from $1.59 a year ago compared with analysts’ forecasts of $1.38 a share.

JPMorgan had already warned in February that trading revenue was weak, but had then pointed to a 15 per cent decline. Other banks also issued gloomier updates from their trading floors. Overall markets revenue was down 17 per cent at $5.1bn with a smaller decline in equity trading.
Missing Ratcheted Down Expectations

It's rare for companies to miss expectations because of all the revised forward guidance. Typically companies guide to estimates they can beat by a penny.

That JPMorgan failed to do so, means that conditions deteriorated more than expected.

In this case, slowdown in fixed income and mortgages were way off the revised mark, and even further off the original estimates.

Bright Spots About to Dim

Supposedly autos are a bright spot. But are auto loans going to rise forever?

I think not. Rather, I suggest the demand for autos will soon peak if it hasn't already.

But it's that slowdown in housing that's going to be the real killer. A housing slowdown means a slowdown in other durable goods.

Looking ahead, a slowdown in durable goods, especially cars portends a decline in manufacturing hours or employment.

This is precisely what's wrong with taking a single indicator and projecting it forever into the future for "years to come" as economist Robert Shiller did recently with manufacturing hours.

For discussion, please see


Start of Mean Reversion in Earnings?

Those projecting future earnings explosion also play with fire. And if earnings expectation don't pan out (I suggest they won't), stocks are priced not for perfection, but well beyond perfection.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com ]]>
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http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298392/mortgage-loan-originations-lowest-on-record Sun, 13 Apr 2014 05:30:12 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11298392/mortgage-loan-originations-lowest-on-record <![CDATA[Mortgage Loan Originations Lowest on Record]]> February Mortgage Data shows Monthly Loan Originations Lowest on Record.

Key Points

  • Origination volume is the lowest on record with prepay speeds signaling more drops in refi originations
  • Monthly sales were essentially flat year over year, but traditional sales were up almost 15%
  • The government share of originations has decreased, led by a sharp drop in HARP originations
  • Credit standards have shown few signs of loosening, with very little origination activity in the lowest credit score buckets
  • Modification re-default rates for underwater borrowers about 30 percent higher than those with equity
February’s data showed the continued trend of declining origination activity we’ve been observing since mid-2013, with monthly originations falling to their lowest recorded point since at least 2000. In spite of this decline, residential real estate sales have remained strong due at least in part to investor activity and the fact that cash sales account for almost half of all transactions. In addition, while total transaction levels were flat on a year-over-year basis, traditional (or “non-distressed”) sales were up almost 15 percent from last year as the share of distressed transactions continues to decrease. Credit standards have shown little sign of easing -- only about 30 percent of 2013 loans went to borrowers with credit scores below 720 -- which indicates that significant opportunity to expand mortgage origination activity is available, if risk appetites allow.
Risk Appetites 

Is it lenders who are risk averse or borrowers? Either way, that is a healthy thing, not something to fear or complain about. Home prices have recovered significantly, and the recovery is getting rather aged by historical standards.

Now is not the time for extended risk appetites, even as risk appetite for nearly everything else has soared to the moon.

For further discussion of sentiment and risk, please see Framework for Understanding Market Tops and Bottoms.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com   ]]>
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http://www.hedgehogs.net/pg/blog/skinnercm/read/11297198/things-worth-reading-9th-april-2014 Wed, 09 Apr 2014 05:16:32 +0100 http://www.hedgehogs.net/pg/blog/skinnercm/read/11297198/things-worth-reading-9th-april-2014 <![CDATA[Things worth reading: 9th April 2014]]>

Things we're reading today include ...

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