Phil Grossfield's Blog

A LITTLE EXTRA…

American Idol Moment; 2012 Tax Returns; Fed Minutes Translation

American Idol Update.  Last night was unbelievable for Candace Glover…she brought the house down…she had a moment.  I have no doubt she will go on to become one of the best singers of our time…she’s that good.  She’s in the likes of the greats…Aretha, Stevie, Luther….  If you hate American Idol and even if you hate music in general, I challenge you to deny the talent here:  Candace Glover: Don’t Make Me Over and Candace Glover: Lovesong.  Kree Harrison also sang beautifully:  Kree Harrison: Help Me Make It Through The Night.

candaceandkree

2012 Tax Transcripts. For now, unless you need 2012 income to qualify, 2012 transcripts are not required.  However, effective with applications dated on or after May 16, Interbank will require the 2012 tax return transcripts. If a borrower has filed an extension, we will require:

  1. Evidence in the file that the extension was filed;
  2. A 2012 Tax Transcript showing “No record of return filed;
  3. For salaried borrowers a 2011 transcript, a current pay-stub, and 2012 W-2;
  4. For self-employed borrowers a 2011 transcript and a P & L for 2012; and
  5. For retired borrowers in cases where the borrower is not required to file, transcripts are still required.

If “No Results” feedback is received, provide a copy of the feedback in the file with supporting income documentation.

My Market Watch:  
Pricing is 0.125 better than yesterday but there is concern over the results on the 30-year auction which will be reported around between 10-11a.  The last couple auctions did not go well. Check out the following interpretation of the Fed minutes released…I got this information from Barry Habib’s MBS Highway:

“The labor force participation rate was a bit below its fourth-quarter average.”

English translation:  the participation rate was the lowest in OVER FOUR DECADES !!!
“The rate of long-duration unemployment remained high.”
English translation:  the number of people unemployed for 27-weeks or longer (who have not dropped out of the labor force) is 4.611 million, or MORE than FOUR TIMES the number prior to the 2008-09 crisis (1.132 million, May-2007)…and the number of people not in the labor force has risen by MORE than 11 million, since the beginning of 2008.
“To the extent that asset purchases push down longer-term interest rates, they potentially expose financial markets to a rapid rise in those rates in the future, which could impose significant losses on some investors and intermediaries.”
English translation:  we might not be able to keep the bond market bubble ‘floating’ forever, and when it burst, watch out, it will likely be UGLY.
“A few participants noted that they already viewed the costs as likely outweighing the benefits, and so would like to bring the program to a close relatively soon. A few others saw the risks as increasing fairly quickly with the size of the balance sheet, and judged that the pace of purchases would likely need to be reduced before long.”
English translation:  the Fed’s ‘staying power’ is waning

My Schedule:  I have a meeting at noon and should otherwise be available.  If you recall, I rarely answer my phone before 10:30a as I use this time to catch up on the previous day’s business and prepare the remainder of the day….

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