Insight and Action

When Bernanke Has a Problem, So Do the Banks

Mortgage applications are down for the seventh week in a row:

We know exactly what's causing potential borrowers to rethink their purchasing decisions. The national average rate on a 30-year fixed mortgage has risen to 4.36 percent from 3.40 percent in May, according to Bankrate.com. This equates to an extra $256 per month on a $500,000 mortgage. Blame Bernanke for suggesting the Fed may slow its bond-buying program.

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Bringing Money Back Home

The Tax Man Cometh... to Chattanooga, Tennessee

Half the companies in the S&P 500 have reported earnings, and consumer companies selling products like clothes and movies are expanding the bottom line 12 percent from last year (more than double the average for the S&P 500).

"What about banks' 35 percent earnings growth" you ask? Their gains are coming from lower loan loss provisions and higher trading activity. Record low default rates mean the accretion of lower loss reserves is running out. So we look to cash earnings due to higher sales, and the consumer discretionary sector is selling plenty to willing buyers. U.S. personal consumption is near an all-time high $11.39 trillion on an annualized basis.

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Half-Time, and We Already Have a Winner

Insight & Action

R&D Investments Return Dividend for U.S. Companies

Insight & Action

Citigroup's Surprise Index Lives Up to Its Name

Insight & Action

Where Is the Pick of the Emerging Market Crop?

Refining Made Simple: Refining 101

Oil Investments May Not Need Refining

Insight & Action

A Bottom-Line Solution for a Top-Line Problem

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About Insight and Action


Insight & Action identifies trends across global markets and finds ways investors may profit. We crunch our own numbers, spotlight commentary from influential thinkers and try to arm investors with insights into what's moving and what's not. Analyses or commentary are the views of the author, and do not necessarily reflect the views of Bloomberg News.

Contributors

  • Adam Johnson
    Adam Johnson