Dow finishes down 140 points after S&P lowers outlook on U.S. debt.

This is just the beginning. It will get a lot worse if we can get rid of the fiat currency system that this country is enslaved to.

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Weekly Market Preview

Trade likely will be quiet with the religious holiday. Most all of the data points this week are centered on the housing sector; starts and permits for Mar, new and existing home sales, the NAHB housing market index Monday and the FHFA housing price index on Thursday. The only other releases are weekly claims on Thursday and the and the April Philadelphia Fed business index also on Friday. That's it for the week. Markets closed on Friday.
 
Until a week ago the overwhelming consensus in the markets was that the US economy would have a strong Q1 and optimism for the rest of the year was being touted as continued improvement. Over the past week investors were beginning to re-think the economic outlook and lowering expectations. It started with the IMF saying it is revising lower GDP Q1 growth from 2.0% to 1.5%; markets had accepted growth in Q1 at +3.0%. The Fed's Beige Book out last week, while remaining optimistic, showed indications that growth isn't as powerful as markets were thinking. The National Federation of Independent Business overall index fell in April, taking the optimism that had improved since last Oct totally away. Small businesses account for the majority of jobs. This is also earnings season with companies reporting Q1; so far earnings have been a little disappointing. 
 
Consumer spending declining, until recently, have been ignored by investors. Even with gasoline and food prices increasing markets generally didn't pay much attention----until last week. $4.00+ gasoline and rapidly increasing food prices will, as we have continued to mention, slow consumer spending. Bernanke out there saying the increase in energy and commodity prices are "transitory" may not be; markets beginning to understand that. With consumer spending less than expected and the housing markets still showing no signs of stabilizing, let alone improving, investors are getting a little nervous.  

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Loan Officer Compensation

The National Association of Independent Housing Professionals is throwing in the towel on its lawsuit against the Federal Reserve. However, NAIHP chief Marc Savitt promised that he's not done fighting the loan officer compensation rule. More to come on this for sure.

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Federal Reserve sanctions 10 banks for mortgage practices

The Federal Reserve said it's taken enforcement action against 10 banks over "a pattern of misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing. These deficiencies represent significant and pervasive compliance failures and unsafe and unsound practices at these institutions." The banks are
Bank of America (BAC), Citigroup (C), Ally Financial, the HSBC North America unit of HSBC Holdings (HBC) , J.P. Morgan Chase (JPM) , MetLife (MET) , PNC Financial Services (PNC) , SunTrust Banks (STI) , U.S. Bancorp (USB) and Wells Fargo (WFC) . In addition to the actions against the banking organizations, the Federal Reserve on Wednesday announced formal enforcement actions against Lender Processing Services, Inc. (LPS), a domestic provider of default-management services and other services related to foreclosures, and against MERSCORP, Inc., which provides services related to tracking and registering residential mortgage ownership and servicing, acts as mortgagee of record on behalf of lenders and servicers, and initiates foreclosure actions

From MarketWatch

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Closely Held Banks Still Waiting on SBLF Terms

There are 7,604 banks and thrifts in this country, and the core mission of nearly all of them is to lend locally. As currently structured, however, nearly 40% of these institutions are barred from taking part in the Small Business Lending Fund, the government's latest attempt to stimulate the national economy from the community level on up.

Cursed by its status as a subchapter S corporation, Riverside Bancshares Inc. is one of that sidelined minority.

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Japan upgrades nuclear-crisis assessment to level 7, on par with Chernobyl disaster
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Delinquency Rates & Foreclosures

BY THE NUMBERS - Lender Processing Services, Inc., a leading provider of integrated technology, data and analytics to the mortgage and real estate industries, reports the following "first look" at February 2011 month-end mortgage performance statistics derived from its loan-level database of nearly 40 million mortgage loans.

- Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 8.80%

- Month-over-month change in delinquency rate: -1.2%

- Year-over-year change in delinquency rate: -18.4%

- Total U.S foreclosure pre-sale inventory rate: 4.15%

- Month-over-month change in foreclosure pre-sale inventory rate: -0.2%

- Year-over-year change in foreclosure pre-sale inventory rate: 7.4%

- Number of properties that are 30 or more days past due, but not in foreclosure: 4,659,000

- Number of properties that are 90 or more days delinquent, but not in foreclosure: 2,165,000

- Number of properties in foreclosure pre-sale inventory: 2,196,000

- Number of properties that are 30 or more days delinquent or in foreclosure: 6,856,000

- States with highest count of non-current loans: FL, NV, MS, NJ, GA

- States with the lowest count of non-current loans: MT, WY, AK, SD, ND
BLAME IT ON THE ARMs - Not so surprising, the report noted that "February's data also showed a 23 percent increase in Option ARM foreclosures over the last six months, far more than any other product type. In terms of absolute numbers, Option ARM foreclosures stand at 18.8 percent, a higher level than Subprime foreclosures ever reached."

The WSJ blames the housing dip is part caused by the disappearance of first-time homebuyers.

NAR reports that existing home sales dropped 9.6%, and the median price hit $156,100, a 10-year low. Taking this into account the WSJ says that the stage set for steep discounting in the spring market, according to the WSJ.

THE SILVER LINING - But good news can be found in the rental market, as it heats up. The average US apartment vacancy rates dropped to .5% last year from 8%. This has developers saliva ting over the potential for a multiyear rental boom, since the glut of foreclosed SFRs isn't proving much competition.

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