French Jobseekers Surge To Record High, Global Sovereign Yields Fall

France has some unwanted (although expected) labor news. French jobseekers climbed to 3.424 million, a new record high.


And here is the chart of French jobseekers against the French 10 year government yield. Isn’t it supposed to be going in THE SAME DIRECTION?


Now here is something you don’t often see. ALL global sovereign yields are declining, not a sign of an improving global economy.


I’ll bet French Prime Minister Francois Hollande wishes this was a barrel of wine instead of herring.


Land Of The Dead: Mortgage Purchase Applications Rise Slightly, But Still Down 10.6% Since Last Year (End Of Year Approaching)

So much for the much anticipated housing recovery of 2014. Like Cinderella, end of the year is approaching and nothing is happening, at least in terms of residential mortgage lending.

Mortgage applications increased 2.8% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 22, 2014.


The NON seasonally adjusted Purchase Index increased 0.5% from the previous week, but remain down 10.6% since the same week from last year. AND just wait for the Labor Day slump coming next week!!


The seasonally adjusted Purchase Index increased 3% from one week earlier, but still remain at pre-bubble, 1995 levels.


And if I include the decline/stagnation of American incomes (coupled with declining labor force participation, we get the Land of The Dead (Tierra de los muertos) chart.


The Refinance Index increased 3% from the previous week, but remain in The Land of the Dead as well.


The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.28% from 4.29 percent, with points decreasing to 0.25 from 0.26 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Yes, the residential mortgage market remains in The Land of the Dead.


Argentina Suffers From “Peronitis” As Peso Hyperbolic Devaluation Continues

The ongoing slug fest over Argentina’s previous default and the likelihood of yet ANOTHER default are making the news again.

Argentina’s OFFICIAL Peso rate is being devalued at almost a hyperbolic rate.


But Argentina’s UNOFFICIAL (aka, black market) rate, Dolar Blue, makes the official devaluation look tame.


Argentina has never really gotten over the free spending ways of Juan and Eva Peron (known as Peronitis). Especially at FOREIGN bondholder expense.

Eva and Juan Peron Waving


Case-Shiller Home Prices Drop 0.20% In June, But Still Growing at 8.10% Annually (Even Though Wages Are Growing At 2%)

The S&P Case-Shiller repeat home sales indices are out for June. Home prices dropped 0.20% and slowed to an annual rate of 8.10%.

Chicago, Detroit and Las Vegas led the nation in month-over-month (MoM) change at 1.4% for May to June. None of the Case-Shiller 20 metropolitan areas dropped in price.


It is a shame that home price growth is 8.10% while average wage growth is only a dismal 2%.


And it is a shame that home prices are rising with growth in The Fed’s Balance Sheet while incomes remain stagnant.


It is a fun time for wealthy investors (domestic and foreign) who can purchase homes with all-cash.

“And you, you have potential … to get a mortgage loan if you have don’t have sufficient a DTI ratio.”


New Home Sales Decline 2.4% In July, Remain in “Death Valley” (Sales Rose ONLY In The South As Northeast Tanks)

Sales of new U.S. homes unexpectedly fell to a four-month low.

Aug. 25 (Bloomberg) -By Lorraine Woellert- New-home sales in the U.S. fell unexpectedly in July for the second month as the housing recovery makes only fitful progress.

Sales declined 2.4 percent to a 412,000 annualized pace, the fewest since March and weaker than the lowest estimate of economists surveyed by Bloomberg, after a 422,000 rate in June, the Commerce Department reported today in Washington.

Specifically, new home sales have yet to dig themselves out of “Death Valley” after the housing bubble burst.


Only in the South did new home sales rise.


If I throw in mortgage purchase applications (blue line), you can see that both new home sales and mortgage purchase applications remain in “Death Valley.”


Death Valley

Yields Plunge for European PIGS (Portugal, Italy, Greece and Spain) After Draghi Signals Euro QE – France’s Hollande Dissolves Government

The European banking system hangs by a thread and the vaunted “recovery” of Europe is a myth. One sign of the lack of confidence in the European economy is the plunge in sovereign bond yields this morning, particularly among the PIGS (Portugal, Italy, Greece and Spain).

Another sigh is that European Central Bank President Mario Draghi is signaling that the ECB will follow The Fed’s quantitative easing (QE) playbook.

Aug. 25 (Bloomberg) — A surge in European government bonds sent German two-year note yields below zero after European Central Bank President Mario Draghi signaled that officials are moving closer to quantitative easing.

Belgium’s two-year yield went negative for the first time, while the German rate slid to the lowest since 2012. Draghi said bets on price increases in the euro area “exhibited significant declines.” That boosted bonds across Europe, along with a report that business confidence in Germany, Europe’s largest economy, declined a fourth month. French yields also reached new lows even as the government resigned amid divisions over economic policy.

Whenever 10 yield sovereign yields move by 10 basis points or more, it is notable.


Also in today’s news, French President Francois Hollande dissolves his government after an alleged cabinet feud. French 10 year sovereign yields dropped 6.5 basis points this morning.


Almost 0% real GDP growth and high unemployment is not a winning formula for Hollande.

N’est pas?


Jackson Hole’d: 10Y-5Y Treasury Curve Flattens To Early January 2009 (Flattening NOT A Good Sign!)

Federal Reserve Chair Janet Yellen spoke this morning at the annual monetary policy cavalcade at Jackson Hole, Wyoming … where the Elite Come To Meet!


The end result? The Treasury 10y-5y curve flattened to its lowest level since early January 2009.


Here is the yield curve for today versus January 1, 2009.


Of course, a flattening yield curve is NOT a good sign for the global economy, where investors run for safety in the US Treasury Markets. And is reflected by the fact that this Jackson Hole cavalcade is the first won that was followed by a DOWNTURN in the S&P 500 index.


Yes, life is tough at the monetary cavalcade in Jackson Hole!