Over the past decade, as interest rates declined, some homebuyers gravitated towards interest-only loans. However, times are changing, and borrowers should be careful in considering this kind of mortgage loan. During the past two years, many financial lenders have tightened credit standards across most loan types. The combination of the Coronavirus pandemic, supply shortages, inflation and the impact of the Ukraine war has created a drag on the U.S. economy. A slowing economy increases the risks of lending, thus tighter standards emerge. Fannie Mae and Freddie Mac, the two government-sponsored enterprises that back most mortgages, exclude interest-only mortgages. And while…
Insights & Advice
Bill Schmick
Investors prepare for the Fed
Investors are preparing for the Federal Open Market Committee (FOMC) scheduled for Wednesday, May 3-4, 2022. Stocks have been sold down to a level that may have discounted some of the bad news most expect. Is it enough? Could a couple of days around May 4th see a re-test of this year’s lows? It depends on how hawkish the Fed is prepared to be. Expectations are now for a 50-basis point hike in the week ahead, and two more in the next two monthly meetings. The markets are also expecting a substantial reduction in the Fed’s multi-trillion-dollar balance sheet. That…
Does this look smaller to you? Shrinkflation is here.
By now, you may have noticed that something doesn’t look quite right on your grocery shelves. Could it be that bag of chips, or maybe that roll of toilet paper, seems to have shrunk? Let me assure you it is not your eyes; we have all come down with a bad case of shrinkflation. Shrinkflation is an actual term, according to Wikipedia, which means “a rise in the general price level of goods per unit of weight or volume, brought about by a reduction in the weight or size of the item sold.” I must admit that, until recently, the…
Earnings matter, but the Fed trumps everything
The first quarter 2022 earnings season kicked off this week with mixed results. Thus far, the standouts were Netflix and Tesla. The two companies’ results could not have been more different, but in the end it didn’t matter. Netflix disappointed, reporting its first loss in subscribers in recent memory, while investors were expecting a gain in subscriber growth. There were many reasons for this including the loss of 700,000 Russian customers as a result of the Ukraine War. At last count, the stock lost 37% of its worth in three days and took the NASDAQ index down along with it….