John Wake

Today's Yellow Shoot: The MBA Mortgage Report

Minor correction on the $8,000. It is indeed a "first-time homebuyer" program, can't have owned a home in previous 36 months.

It turns out that the $8,000 can NOT be used for the down payment, although a HUD official previously announced otherwise. I guess they thought better of the idea.

Nevertheless, last Friday HUD announced it would allow FHA-approved lenders to create bridge loans to buyers who qualify for the $8,000 and the bridge loans can pay for closing costs but can NOT pay for any of the 3.5% minimum down payment required on FHA loans.

Are Building Permits Really a Leading Indicator?

Interesting that declining permits predict tops. I always say "Builders build." If they aren't building they aren't real men anymore. Builders build until they run out of money. So a slowing of build permits shows that things are so bad that some builders are being cut off by their lenders.

John Hussman: Applying Ockham's Razor to the Current Crisis

"In short, the essential problem is... risk-aversion and anticipatory saving triggered by fear of financial instability."

The essential problem is that many banks are, in reality, insolvent.