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Taper Time – No matter what the Fed says today, markets are probably going to get crazy

This morning, the S&P 500 Index e-mini futures (ES-U3) are trading higher by just 0.50 points to 1705.50 per contract. Most institutional traders and investors are eagerly awaiting the FOMC announcement. Later today, the Federal Reserve is expected to start tapering its QE-3 program. QE-3 is a program where the central bank buys $85 billion a month of U.S. treasuries and mortgage backed securities. How much money will the Federal [...]

“Crash Alert”! S&P 500 Fell 50% Last Two Times Margin Debt Was This High! Bank of America: Three “Shocks” That Could Set Off The Next Crisis

Bank Of America: “We Hope None Of These Three Shocks Reaches A Crisis Level”

…Unfortunately, we seem to be entering another of those periods of elevated risk. Three concerns are emerging.

Interest rate shock: The Fed’s tapering talk has caused about a 100 bp rise in longer term interest rates. Clearly this puts economists on high alert for signs of weakness in interest-sensitive sectors such as autos, housing, and capital goods investment. On [...]

The U.S. ‘Recovery’ Is Coming To An End?

Nearly half of modified mortgages are in default

 

Nearly half of the mortgages modified in 2009 under the Obama administration’s signature homeowner rescue effort are in default again, according to a report on Wednesday that raised concerns about the program’s effectiveness.

 

The report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the watchdog for the aid effort, said 46 percent of the struggling homeowners who received loan modifications [...]

While homebuilder confidence has been coming in strong, we’ve had some disappointing housing data more recently

The FHFA home price index climbed 0.7% month-over-month in May.

 

This was just shy of expectations for a 0.8% rise.

Meanwhile, April’s reading was revised down to show a 0.5% rise in the HPI, down from an initial estimate of 0.7%.

While homebuilder confidence has been coming in strong, we’ve had some disappointing housing data more recently.

Housing starts fell in June and the previous month’s numbers were revised down as well. Existing home sales missed expectations as well. [...]

This Week’s Economic Data Was Okay, But Two Big Leading Indicators Have Turned Negative

May monthly data reported this past week included the Index of Leading Indicators, up 0.1 and showing no imminent recession, the Empire State and Philly manufacturing indexes, both of which improved, consumer prices up slightly, housing starts and existing home sales up, and permits down. The 6 month trend in housing is up, but at a more muted pace than over the previous year.

Prof. Geoffrey Moore identified 4 long leading [...]