Fannie Mae reported that the Single-Family Serious Delinquency rate declined to 0.99% in August, from 1.00% in July. The serious delinquency rate is down from 1.24% in August 2016.
This is the lowest serious delinquency rate since December 2007.
These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.
The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.
Click on graph for larger image
By vintage, for loans made in 2004 or earlier (4% of portfolio), 2.65% are seriously delinquent. For loans made in 2005 through 2008 (7% of portfolio), 5.71% are seriously delinquent, For recent loans, originated in 2009 through 2017 (89% of portfolio), only 0.32% are seriously delinquent. So Fannie is still working through poor performing loans from the bubble years.
In the short term – over the next several months – the delinquency rate will probably increase slightly due to the hurricanes. After the hurricane bump, maybe the rate will decline another 0.3 percentage points or so to a cycle bottom, but this is pretty close to normal.
Central Banks: Monetary policy reviews scheduled in Australia, India, Iceland, Poland, Hungary, and Romania. Various Fed officials will be speaking publicly, including Yellen, Dudley, Powell, Williams, Bostic, Harker, George and Kapan. Minutes of the ECB Governing Council meeting to be published.
Holidays: China all week to commemorate Communist revolution victory in 1979. Hong Kong on Monday. German Unification Day on Tuesday. South Korean Full Moon Festival on Wednesday-Friday. Portuguese Republic Day on Thursday.
Australian Clocks: Return to standard time.
Purchasing Manager surveys: Manufacturing for the U.S., euro area, Japan, South Korea, The Philippines, Malaysia, Indonesia, Taiwan, Thailand, Vietnam, Russia, Germany, France, The Netherlands, Greece, Italy, Ireland, Poland, Spain, Turkey, Switzerland, Australia, Canada, South Africa, Singapore, Hong Kong, Norway, Hungary, and Sweden. Services: Japan, Ireland, Russia, Spain, U.K., Italy, France, Germany, Euroland, Brazil, the U.S., Australia and India. Construction: Britain, Germany, and Australia. Retail: Euroland, Germany, France and Italy.
Scheduled U.S. Statistical Releases: Nonfarm payroll employment, average hourly earnings, unemployment, construction spending, trade balance, ADP estimate of private jobs, motor vehicle sales, New York regional ISM (NAPM index), factory orders and weekly jobless insurance claims, mortgage applications, chain store sales, energy inventories, and consumer comfort.
Euroland: Retail sales and producer prices.
Members of the Euro Area: Italian retail sales and French current account. Austrian and Italian unemployment. German industrial orders. Dutch and Cypriot consumer prices. French and Greek trade balances. Irish industrial production and Austrian WPI.
U.K. and Switzerland: British shop prices and new car registrations. Swiss consumer prices.
Eastern Europe: Czech, Romanian and Hungarian retail sales. Czech trade and unemployment. Romanian producer prices and Hungarian industrial production.
Nordic Europe: Swedish, Norwegian and Danish industrial output. Norway’s current account.
Japanese Data: BOJ Tankan, a quarterly survey of corporate conditions and expectations. Also, the monetary base, labor cash earnings, international reserves, motor vehicle sales, consumer confidence and index of leading economic indicators.
Selected Other Asian Indicators: South Korean, Thai, Filipino, and Indonesian consumer prices. Thai and Filipino PPIs. Malaysian and South Korean trade balances. Hong Kong retail sales and Indonesia consumer sentiment.
Australia, New Zealand and Turkey: Australian retail sales, trade balance, motor vehicle sales and building permits. New Zealand business sentiment. Turkish consumer and producer prices.
Canada, Brazil and Mexico: Canadian labor statistics, trade balance, housing starts, building permits, and IVEY-PMI index. Brazilian trade, CPI, and industrial production. Mexican consumer confidence.
Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Economic Data Calendar
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A daily summary of high-profile members of several complexes.
Gold Dec Contract (GC, ETF: (GLD)) Fresh lows overnight fulfilled potential to test 1280.50. The probe under Wednesday’s lows was recovered by Thursday’s open. Ranging sideways all day doesn’t equate to stability, and another intraday fresh low is likely so long as 1298.50 isn’t recovered.
Eurodollar Dec Contract (EC, ETF: (FXE, UUP)) Already having fulfilled its objective to test 1.1745on Tuesday, extending the decline Wednesday morning to attack the next lower objective at 1.1760 was reversed to close higher on the day. That extended slightly into Thursday’s open, which ranged narrowly through the day up to 1.1850.
Silver Dec Contract (SI, ETF: (SLV)) Fresh lows overnight touched the prior low at 16.70 and bounced ahead of Thursday’s open. The reaction didn’t become a recovery that would otherwise hold 17.00, still likely to test at least 16.60.
30-year Treasury Dec Contract (US, ETF: (TLT)) Finally testing 153-14Wednesday trended down intraday to avoid forming a bottom. Extending down overnight gapped down to test fresh lows Thursday attacking 152-00. A second consecutive lower close from the multi-session range at 154-30 requires an eventual third lower close. In this pattern, immediately fulfilling the lower requirement would be bearish, where bouncing first would allow a bottom to begin forming.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short)) Surging before Thursday’s open gapped up above prior sessions’ highs to 52.65 resistance. Resistance triggered a reversal down under prior sessions’ lows to test 51.25. The outside day left unfinished business above at Thursday’s opening gap. Testing it before extending down to 51.65 would be bearish.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL)) [Rolling coverage forward to Dec, which trades at a 9-cent premium to Oct]… Greeting Thursday’s EIA from a position of weakness didn’t prevent an initially favorable knee-jerk reaction up. But that was after having gapped down from Wednesday’s close at 3.07 resistance. And the knee-jerk up snapped back down to fill the gap from Tuesday’s3.01 close. Now a bottom can form by closing above 3.08, targeting 3.17 and higher.
About the Author
Rod David develops analytical techniques that are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He primarily analyzes S&Ps, generating several round-turn candidates daily. Rod publishes “Trading Plan” and more each session at the blog http://IfThenSignals.com.
Take a look at the volume of stocks listed vs. indexes listed going all the way back to the days of bellbottoms, loud hair, and orange wallpaper.
Since 1995, the supply of stocks, particularly in the US, has been shrinking faster than Trump’s approval ratings. At the same time, the number of indexes have exploded like one of Kim’s shiny new missiles.
In a falling interest rate environment, the twin pressures of reduced returns and relative cost pressures have meant that investors, in order to make a buck, have flooded into the low fee structures offered by passive strategies. These include indexing, ETFs, and those truly insane creatures I’ve written about before: low volatility ETFs.
But what about those alpha generating hedge funds? Aren’t they meant to be smart and able to beat the market… any market?
Those alpha generating hedge funds have things called LPs. And though LPs may be smarter, and certainly wealthier than Joe Sixpack, they’re no less human. And human attention span and patience level has been in decline… correlated no doubt with the rise of social media and the Kardashian crowd. Like a virus, it infects everything.
As performance from hedge funds has been poor relative to the benchmarks, a self reinforcing situation where hedge funds, in order to ensure LPs don’t redeem, have landed up hugging the indexes.
This is the exact opposite of what hedge funds were meant to do, of course. In many cases, they themselves are simply buying the indexes, trying desperately to figure out how the hell they’re going to survive through the next quarter but determined simply NOT to underperform the index. It’s a losing strategy no matter how you slice and dice it.
For those hedge funds who refuse to chase the indexes… Well, they are now fighting the tidal wave of capital that has been shifting into passive investments, which forces those passive investments even higher.
This, in turn, leaves active hedge funds who refuse to get sucked in with increasingly substandard returns. They can explain until they’re blue in the face why certain indexes make no sense but when those indexes just keep rising day after day, month after month, it becomes a very tough stance to keep. Redemptions follow, and so by doing the right thing, they’re punished. And by doing the wrong thing (following the mob), they may get to stay alive just a little longer and this is what many have resorted to.
We all know that at some point there are no new buyers available to enter the market and hoo boy, do we then have a problem.
So… you either join the party or you leave the party.
The last to leave the party is Hugh Hendry and his baby Eclectica.
Hugh Hendry Murders His Hedge Fund
Hugh follows Eton Park and Perry Capital to name but a few more.
Paul Singer of Elliot Management fame put it well in his July investor letter to stakeholders.
“In a passive investing world, small shareholders have little-to-no voice and no realistic possibility of banding together, while the biggest shareholders have no (repeat, no) skin in the game so long as the money manager does not underperform the index.”
The rise of passive indexing is a bubble in dumb money.Click To Tweet
Make no mistake, the rise of passive indexing is a bubble in dumb money.
We have a situation where the market is becoming completely lopsided and increasingly so at a blistering pace.
If it gets anymore lopsided, it’s going to be upside down. What’s more, the market participants have no interest or even determination of valuations.
An index doesn’t give an isht what the P/E ratio of any stock included in the index is, and the investors buying it have even less idea. It doesn’t care if the aggregate of stocks sitting inside its womb are over or indeed undervalued. It’s just a dumb bloody index, and you can’t blame it anymore than I can blame my dog for not understanding Shakespeare.
Those investing in passive have done so partly due to relative fee differentials, partly due to performance. But now also dangerously so… due to increasing inflows, which have continued to push values higher.
Now, having markets or sectors get silly is obviously as normal as a peanut butter sandwich, and provided you’re aware of it, we’ve little to worry about.
But what’s more frightening than the Kardashians in skinny pants is that as capital has fed into passive, the usual countering forces (active managers) of the market have been leaving the party, which has left the passive world to increasingly swell like a neglected infected wound.
What we need to think about is that increasingly there is no active market to stabilise this. It’s akin to having a 5-year-old’s party, inviting a troop of the critters, and then promptly sending all the parents down to the pub for a few hours.
Just as short sellers provide a balance to a market so, too, active management (who incidentally typically have skin in the game) have always provided a stabiliser to the overall market. What happens when the stabilisers all leave the room?
We can see this manifesting itself in the volatility index. As more capital enters at a steady pace so, too, the volatility falls.
And here’s the thing. The algos constantly feed back the daily data to recalculate their probabilities (read this article on VAR shocks). Risk? Nah!
At the extreme of the passive world sits volatility.
Selling volatility works really well. Just ask Neiderhoffer who has made godawful amounts doing it over the years.
Look closely, though, and you notice that even Neiderhoffer, who knows what game he’s playing, blows himself up spectacularly from time to time… and I mean complete armageddon wipeout stuff. Until that blow up comes, though, you just keep plugging away at it day after day and it just keeps paying you… day after day. You make money, make money… and then, well…
It all turns to isht and blows up in your face.
My friend Mark Yusko from Morgan Creek Capital places capital with the smartest strategies and hedge funds – active capital.
Who’s willing to bet with me that over the next decade being long smart active strategies and short passive (low volatility ETFs) will be a winning trade?
“What could be more advantageous in an intellectual contest – whether it be bridge, chess, or stock selection than to have opponents who have been taught that thinking is a waste of energy?” – Warren Buffett, 1985 Berkshire Hathaway Letter to Shareholders
Among the companies with shares expected to trade actively in Wednesday’s session are , , , , and . Micron shares gained 6.1% premarket after the chip maker’s quarterly earnings and revenue beats. Shares of Nike fell 3.4% before the opening bell. The athletic apparel retailer warned that weak North American sales will weigh on […]
One thing I do that helps me to open good trades and avoid bad trades is a Forex Checklist. This checklist has a list of rules that must be in place before I enter a trade. I have found that by having a simple checklist in place it assists me in having the discipline to stick to my plan. The best part about having this list is that it is not complicated or difficult to remember. Actually, the list is very easy and after using it a few times, good trading habits begin to form. By using the forex checklist I have developed my trading profits has gone up because this technique has increased my trading winning percentage.
Our Recommended Forex Checklist
First I identify the trend and look for trades that fall within the direction of the trend.
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Please share in the comments below any type of checklists that you have developed that have helped you in your trading. Do you have a pre trading checklist? What does your forex checklist contain?That will help all of us become better traders as we share tips with each other.
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Casey Stubbs is the founder of Winners Edge Trading, which is one of the most widely read forex sites on the web.
Winners Edge Trading has trained thousands of people to trade the Forex markets.
Since last week’s monstrous dip, bitcoin has been trying to breakout above $4,000, but ample sideways trading, has kept extreme volatility at bay these past few days. With approximately 3 weeks elapsing from the $4,979 all-time and monthly high, the $4,122.7 weekly high is going to have to be cracked beforehand, if we are to see a new rally well above $5,000. The November fork is still far from being resolved, but it could serve as a catalyst moving forward.
Trading volume is trending higher and increasing on Bitstamp, with intersecting trend lines pointing toward the $3,514 weekly low, as a crucial point of interest and strong short-term support. The $2,972.01 monthly low stands out as well, and needs to hold, in case we end up witnessing another reversal before the months end. Furthermore, the $2,979 June all-time high is in close proximity to the monthly low and almost overlaps.
Secondary supports are at $3,516.92 and $3,461.38. If $3,000 breaks, then we can look forward to all of the support levels that are vertically lined up below the $2,935.55 horizontal price support. $2,884.05, $2,823.26, $2,650.82, $2,614.11, $2,573.55, $2,524.98, and $2,399.81 are levels to watch out for, especially if all of the previously mentioned sub $3,000 supports, end up being demolished in rapid succession.
Resistance levels are plentiful, but the $4,122.7 weekly high is of primary concern for now. Prior secondary footholds are at $4,045.87, and $4,001.64 respectively. If the weekly high is lambasted, then the $4,166.68, $4,377.91, $4,481.47, $4,676.44, and $4,700.06 secondary resistance levels are next on the agenda, right before the final push past the $4,979 all-time high.
Fibonacci levels drawn out for the existing trading range show close supports ($4,005.83 & $4,001.64) around the 0.5 fib ($3,977.22), in addition to the 0.618 fib ($4,213.57), which is neighboring the $4,166.68 support.
If we use the $1,832.56 July monthly low from the prior trading range, as the starting Fibonacci level (fib 0), then the different fibs begin to overlap on a much wider number of supports. Of special notice are the 0.236 ($2,572) and 0.382 fibs ($3,032.59), which are bordering countless support levels. The $2,573.55 and $2,981.30 price points, remain the most interesting for further observation.
Bollinger bands on the daily chart are expanding, so heightened price volatility is to be expected. If the median line is crossed, then this can be taken as a short term bull flag. However, the 4-hour is quite a bit different, and the gap between the bands is contracting, this is normally a signal for less trading volatility, although the upper band has been breached a short while ago. The hourly is echoing similar conditions to the 4-hour for now as well.
After a bearish crossover, of the 30-day MA over the 180-day MA during the last price correction, the prevailing circumstances seem to be signaling for another crossover, this time of the bullish kind, so it is reasonable to expect a rise of the 30-day MA in the near-term future. The 365-day MA looks like it has just about concluded a trend decline, another probable bull signal.
The VWMA is trending slightly ahead of the 30-day MA, while the 180-day MA has been touched, and may very well end up being surpassed soon. The EMA has jumped up above both, and is earnestly ascending higher, additionally confirming price movement and momentum.
The MACD has had two bearish (marked in red above) and two separate opposing bullish (marked in green) crossovers within the past 2 days. The RSI & %R Williams indicators are exhibiting severely overbought conditions. OBV has begun to gain traction, and is trending upward in accordance with rising volume.
Bitcoin began trading from the currently unbroken $4,122.7 weekly high on September 18 (GMT 23:00), and after a steady decline, managed to bottom out at the $3,514 weekly low on September 22 (GMT 16:00). The price has since then, risen higher and closer toward the $4,000 psychological resistance level, and may break this foothold by the day’s end.
If you have any questions and comments on bitcoin today, use the form below to reply.