A series of strong economic reports (Q2 GDP, jobless claims, home sales) is failing to halt the decline in the 10-year Treasury yield, which slips another four basis points to 2.32%. The German 10-year Bund yield is lower by two basis points to 0.89%.
At issue today is Ukraine's assertion the Russian military has invaded the country. "It's more overt now," says a senior NATO military officer, and NATO reports "well over" 1K Russian troops are inside Ukraine, with another 20K just across the border in Russia.
Keith Benes, a U.S. State Department lawyer who played a key role in the Keystone XL pipeline review is moving on, marking the latest senior official to depart from TransCanada's (NYSE:TRP) long-delayed project.
The move could spark some fresh conversations about Keystone XL, prior to the lawsuits and rulings that will come about later this year.
Benes' review concluded that the pipeline might encourage Canadian oil sands development, but would not meaningfully worsen global climate change.
Proposed new capital requirements for mortgage insurers made by the GSEs are likely to feed through to borrowers in the form of higher costs, according to a report from Moody's Analytics and the Urban Institute (something some mortgage insurers themselves have already said).
On average, borrowers could expect to pay an extra 15 basis points in mortgage insurance premiums, and those with lower credit scores maybe another 70 bps.
Balancing out possible higher M/I costs could be lower fees from Fannie and Freddie. Some suspect the GSEs charge higher fees to guarantee certain mortgages because they suspect mortgage insurers won't be able to make good. To the extent the new rules ease that worry, those boosted fees could slip back.
Comments on the draft rules are due by September 8.
"We're just not going to make those loans and there's going to be a whole bunch of Americans that are underserved in the mortgage market," says Wells Fargo (WFC +0.2%) chief John Stumpf, warning (in an FT interview) the GSEs to stop being so quick to accuse banks of faulty underwriting and then forcing them to repurchase soured loans.
Fighting the last war, regulators are demanding more rigorous underwriting and tighter lending criteria, but evidence is beginning to grow (especially if you ask banks!) that the pendulum has swung too far.
Stumpf: "If somebody makes a payment for - let’s say - three years, the risk ought to transfer then to the insurance company ... If you’re going to pick through each one looking for a technical fault not to pay your insurance policy we’re not going to be in that business.”
Jamie Dimon (JPM +0.8%) last month: "We want to help consumers there, but we can’t do it at great risk to JPMorgan ... We’re going to be very very cautious in that line of business.”