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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Beware: Social Security numbers available online via indexed tax documents

As one who keeps up with the cutting edge of search engines and advanced search querying, it is with much reservation and disbelief that I bring you the results of my latest online investigative research. As of 4/10/2011, I have discovered in excess of 50 tax documents containing any given combination of Social Security numbers, credit card information, names, addresses, tax IDs, and phone numbers being made available online. However, unlike recent leaks of email addresses and password hashes being made available due to hackers compromising systems, these documents are being unknowingly made freely available to prying eyes by the very owners of said information.


Read more at http://www.zdnet.com/blog/seo/beware-social-security-numbers-available-online-via-indexed-tax-documents/2819?tag=nl.e539

The Department of Housing and Urban Development this week rescinded a controversial mortgagee letter that held homeowners or their heirs responsible for repaying, in full, a Home Equity Conversion Mortgage if they wished to keep the property.

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Weekly Market Preview

This Week not much in the way of economic reports. Interest rate markets will continue to take their lead from how the stock market performs each day. The bellwether 10  yr note, although likely to edge higher over the next few months, has twice found near term support when its yield climbs to 3.50% and in  turn is keeping mortgage interest rates from increasing. We continue our outlook that rates will increase but the level of increases won't be excessive; likely not over 4.00% for the 10 and another 40 basis points higher for mortgage rates for the rest of the year.
 
Tuesday the Fed will release the minutes from the FOMC meeting on March 15th; recently there has been an increase of the number of Fed officials that are wanting less easing and an end to QE 2. Global base lending rates are increasing and the Fed has to begin its moves to withdraw from easing. We do not expect the Fed will increase its base lending rate (FF) immediately, the first step will be ending QE 2, whether it ends prematurely is where the debate centers.
 
Two economic reports this week head up or focus; tomorrow the March ISM services sector index and on Thursday Feb consumer credit. Recent spikes in oil prices have likely caused consumers to cut back on other spending, the level of borrowing using credit cards should be watched. This week the ECB will meet with expectations that the bank will increase its base rate as inflation ion Europe has pushed up above the ECB target of 2.0%

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Facebook and Google Encroach on Banks' Turf

Facebook and Google are poised to go head to head with established financial services companies in online payments.

Both Internet companies have developed alternative payment networks that observers say could undermine the scale of dominant payments providers like MasterCard and Visa.

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Court Issues 11th-Hour Stay on Mortgage Loan Officer Pay Rule

An appellate court in Washington late Thursday night granted a stay delaying implementation of the Federal Reserve's loan officer compensation rule until April 5.

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Profit Opportunity: The Baby Boomers' Last Spending Spree

Don't even try to guess what the next big winner will be in the health care sector. Nobody knows which pharmaceutical company will come up with a blockbuster drug. Or which insurance company will benefit most from the new health care bill.

But you can make big profits by betting on just one thing: that the demand for health care will continue to increase. With the investment I mentioned yesterday, I believe you can make 10%+ gains and grab a 5%+ dividend every year for the foreseeable future.

As I said, the baby boomers are going to swamp the health care industry for the next 20 years.

So it makes sense to ride the coattails of this mega-trend.

And one of the easiest ways to do it is by investing in a health care REIT (real estate investment trust). Health care REITs own properties like senior housing, hospitals, skilled nursing facilities, and medical office buildings. And, like all REITs, they must pay out 90% of their taxable income in the form of dividends.

Why do I like REITs so much?

The main reason is that, because they own the health care facilities, they get paid no matter who the patient uses for insurance, what company manufactures their medication, etc.

And most of their properties are leased to health care providers for long periods of time, usually 10 to 15 years. So health care REITs aren't as worried about economic swings as, say, shopping mall REITs would be. If the economy drops, their retail tenants may go out of business. But because health care is virtually recession-proof, and their leases tend to be long-term, the health care REITs have a much more stable revenue stream.

The increasing demand for health care over the next 20 years means there will be an increasing need for more locations to deliver health care services. And with only 10% of health care real estate already owned by REITs, there's much more room for these REITs to grow.

But as an investor, you don't just get a great growth story. Because REITs have to pay out 90% of their income as dividends, you get a nice dividend check every quarter. And the yield on health care REITs (most average over 5%) is higher than that of most other investments.

Growth and income. The best of both worlds.

By Christian Hill

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