The Big Picture

Succinct Summations of Weeks Events 10.24.14
How Many Ebola Patients Have Been Treated Outside Africa?
Bankers Learned All the Wrong Lessons From the Financial Crisis
10 Friday AM Reads
Ferrari California T

Succinct Summations of Weeks Events 10.24.14

Posted: 24 Oct 2014 12:30 PM PDT

Succinct Summations week ending October 24^th

Positives:

1. S&P 500 rose ~ 4% for the week — amazingly is now down less than 1% for the month.
2. Initial jobless claims came in slightly higher than expected but the 4-week moving average fell to the lowest levels since 2000.
3. Mortgage refinance applications rose 23.3% w/o/w as 30-year mortgage rates fell to their lowest levels since May 2013.
4. Consumer prices, bot headline and core rose 0.1% vs flat estimates.
5. Existing home sales came in at 5.17mm, the highest since September 2013.
6. New home sales rose to 467k, the most since '08.
7. Japanese manufacturing PMI rose to 52.8, a 7-month high.

Negatives:

1. Despite the lowest 30-year loan rates in over a year, mortgage applications fell 4.8% w/o/w.
2. New home sales in August were revised down by 38k.
3. Consumer confidence in Italy fell to an 8-month low.
4. Markit's US manufacturing "new orders" fell to a 9-month low.
5. Chinese GDP came in at 7.3%, down from 7.5% in Q2.

Thanks, Batman!

How Many Ebola Patients Have Been Treated Outside Africa?

Posted: 24 Oct 2014 10:30 AM PDT

Source: NY Times

Bankers Learned All the Wrong Lessons From the Financial Crisis

Posted: 24 Oct 2014 06:45 AM PDT

Under normal circumstances, approving my mortgage application should be a no-brainer: High income, no debt, high credit score. The missus also makes a good income, has an almost-perfect credit score and has been working for the same business for 28 years.

But these are not normal circumstances.

Let me jump to the end: Yes, we got our mortgage. We put 20 percent down, bought a house that appraised for more than the purchase price and got a 3.25 percent rate on a mortgage that resets after seven years. We moved in last month.

But the process was surreal. Indeed, it was such a bizarre experience that I started hunting for explanations from people in the industry about why mortgage lending has gone astray. I spoke to numerous experts, many of whom spoke only on background. Today's column is about what I learned.

By just about any measure, credit is tighter today than it has been in decades. Although former Federal Reserve Chairman Ben Bernanke's inability to refinance a mortgage is merely anecdotal, consider instead the gauge CoreLogic developed. It used 1998 as a baseline and considered six quantitative measurements to evaluate how loose or easy mortgage lending is. By those metrics, this is the tightest credit market for mortgage lending in at least 16 years.

The absurdities of my experience are worthy of its own rant, but rather than do that, I wanted to focus on what went wrong. The factors that led to the financial crisis were many, but let's focus on three areas:

Continues here

10 Friday AM Reads

Posted: 24 Oct 2014 05:00 AM PDT

Is this insane week nearly over already? Get set for your weekend, with our expertly curated morning train reads:

• Revenge of the mom and pop investors (Fortune) see also You’re Not Listening To Robert Shiller If His CAPE Ratio Has You Scared Of Stocks (Business Insider)
• Helicopter money (Mainly Macro)
• Nobody Knows Nothing (Irrelevant Investor) see also Lies Investors Tell Themselves (A Wealth of Common Sense)
• Investors Growing Skeptical of Hedge Fund Benefits (CIO)

What are you reading?

Continues here

Ferrari California T

Posted: 24 Oct 2014 03:00 AM PDT

Hey, look, my new Birthday present is here (and in the right color, too!):