Wednesday, July 30, 2008

Big Picture Update

The MBA market composites finished down for the week ending July 25, 2008. The market index fell by 14.1% for the week. Most of this fall was due to the refinance index, which fell by 22.9%, but the purchase index also lost significant ground with a 7.8% loss. Activity on the demand side of mortgage markets remains at a near comatose level thanks to the continued deflationary trend and to relatively high contract rates.


Ford's Finance Arm Tightens Lease Terms on Trucks, SUVs


In a debt-laden society, it is imperative that the exponential growth of debt inflation continue or we will witness a deflationary unwinding of all assets.  One of the keys in the big picture is home prices.  Home prices continue to fall in value in the US and as we all know, it is spreading around the world.  


AMEX OIL INDEX attached,


On another note the commodities cycle and oil picture continue to confirm that the deceleration in global growth. If we have seen the high for oil this cycle then inflation numbers will peak over the coming quarter.  That will allow central banks the headway to aggressively lower interest rates and for governments bonds to outperform other assets.



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These are my own views, please enjoy these insights