Topley’s Top 10 – August 25, 2020

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1.Tech Saw Revenue Growth Q2 2020.

From Nasdaq Dorsey Wright  www.dorseywright.com

2. Two Charts on International Valuations From Invesco.

3. Global Stocks vs. S&P 500

https://twitter.com/CiovaccoCapital

4. Dow Industrials Kicks Out Exxon in Biggest Shake-Up Since 2013..Out with Energy in with Cloud.

Sarah Ponczek and Katherine Greifeld

Dow Industrials Kicks Out Exxon in Biggest Shake-Up Since 2013

More

(Bloomberg) — Exxon Mobil Corp, Pfizer Inc. and Raytheon Technologies Corp. were kicked out of the Dow Jones Industrial Average as part of the stock benchmark’s biggest reshuffling in seven years, actions that will boost the influence of technology companies that have dominated the 2020 stock market.

Salesforce.com, Amgen Inc. and Honeywell International will enter the 124-year old equity gauge a week from today, its overseers said. The moves were prompted when Apple Inc.’s stock split effectively reduced the sway of computer and softward stocks in the price-weighted average.

While any change to the Dow is notable, the ejection of Exxon Mobil — the world’s biggest company as recently as 2011 — marks a particularly stunning fall from grace, reflecting the decline of commodity companies in the American economy. Worth $525 billion in 2007 and more than $450 billion as recently 2014, the stock had fallen in four of six years before 2020 and is down another 40% since January.

“Those changes are a sign of the times – out with energy and in with cloud,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

The latest reshuffling is more testament to the ascent of technology companies, a trend amplified by this year’s Covid 19 lockdowns. While the Dow average is still 4.2% off its February record, the tech-heavy Nasdaq 100 is almost 20% above the pre-pandemic all-time high.

https://finance.yahoo.com/news/dow-industrials-kicks-exxon-biggest-220032220.html

5.  4 Out of 5 Working Age Households Have Retirement Savings of Less Than 1x Annual Income

Zerohedge

Lastly, only 4-0ut-of-5 working-age households have retirement savings of less than one times their annual income. This does not bode well for the sustainability of living standards in the “golden years.”

The 4% Rule Is Dead. What Should Retirees Do Now? https://www.zerohedge.com/personal-finance/4-rule-dead-what-should-retirees-do-now

6.  The Big Short on Malls.

‘The Big Short 2.0’: How Hedge Funds Profited Off the Pain of Malls–As the pandemic accelerated the demise of some brick-and-mortar retailers, a group of investors profited handsomely from their travails.

The CMBX 6 index is intended to track a basket of bond products, each of which contains bundles of individual mortgages to commercial borrowers, more than 2,000 in total. Those products are then sliced into brackets, known as tranches, and assigned credit ratings ranging from AAA to BB, according to their perceived level of risk.

The CMBX 6, which tracks the performance of mortgages issued in 2012, has been a target for short-sellers because of its relatively strong exposure to malls. According to an analysis by Trepp, 40 percent of the property loans tracked by the CMBX 6 are in the retail sector, giving it the highest exposure to retailers of any CMBX index. (The balance of the mortgages are in the lodging, residential, office and industrial sectors.) Of the retail mortgages the CMBX 6 tracks, 39 are in American malls, many of which have 10-year mortgages coming due in 2022.

Deer Park Road’s Mr. Burg, who specializes in complicated bond investments and said his firm had done well by betting heavily on risky home borrowers in the aftermath of the 2008 financial crisis, adopted the mall short before the virus hit. His research suggested similarities between the lax way that home loans were signed in the run-up to the last crisis and the underwriting of many retail mortgages. He also thought there were too many malls.

By the middle of May, the portion of the CMBX 6 with a BBB– rating, which had begun the year trading strongly but was especially popular with short-sellers, had fallen more than 30 points. It has recovered only a few points since then.

“It’s an absolute perfect storm, unfortunately, for the commercial real estate market,” Mr. Burg said. “We see very little that the Fed or government can possibly do to prop this up when there’s so much excess supply.”

Scott Burg of the Deer Park Road fund compared the underwriting of many retail mortgages to the way home loans were approved before the 2008 financial crisis.Credit…Caleb Santiago Alvarado for The New York Times

To short any CMBX index — there are 13, each tied to a different origination year for commercial mortgages — investors pay various fees, including an annual amount to hold what is essentially an insurance policy that pays out if the mortgages the index tracks default. Those fees might be $300,000 to $500,000 a year for every $10 million of insurance the investor wants to hold.

Before making their bets, some investors who shorted the CMBX indexes engaged in labor-intensive research. Mr. Mudrick and his analysts walked all 39 malls in the CMBX 6 index, from the Northridge Fashion Center in Los Angeles to the Town Center at Cobb in Kennesaw, Ga. Wearing casual clothes, his group paced the perimeters and food courts, snapping photographs and taking notes.

7. New York and San Fran Only Places Where Home Inventory Increasing

John Burns

https://www.linkedin.com/in/johnburns7/

8. Boise ID Turning into Brooklyn.

People are flocking to Idaho during the pandemic. I spent 4 days in its capital city last fall, and a walk through downtown made it clear why it’s so popular.

Katie Warren 

downtown boise

Boise is having a moment. Katie Warren/Business Insider

·         -While some states have seen population losses during the pandemic, people are flocking to Idaho.

·         -194% more people moved into Idaho than left the state since March, according to data from moving marketplace HireAHelper.

·         -Its capital, Boise, was becoming a hot destination even before the pandemic: Its population grew by 18.2% from 2010 to 2018, and Forbes named it the fastest-growing city in the US in 2018.

·         –Microbreweries, luxury condos, and Brooklyn-esque coffee shops have been popping up in the Pacific Northwest city of 229,000 people.

·         -In November 2019, I spent four days in Boise’s thriving downtown area, which is full of locally owned bars and restaurants, microbreweries and cider houses, and new luxury apartments.

·         Visit Business Insider’s homepage for more stories.

Everybody wants to live in Idaho right now.

While states like New York and California have seen mass exoduses during the pandemic, others have seen a more people moving in than out. In Idaho, 194% more people moved in than left the state since March, according to data from moving marketplace HireAHelper.

Well before the pandemic, its capital city was experiencing a major growth spurt. Forbes named Boise the fastest-growing city in the US in 2018. Its population grew by 18.2% from 2010 to 2018, and by more than 3% from 2017 to 2018.

Most out-of-state transplants have been coming from California, primarily from the Los Angeles metro area. Almost 80,000 people moved to Idaho in 2018, and more than 21,000 of them were from California, according to US Census data.

According to locals, people are finally figuring out how great of a place Boise is to live. In 2019, Boise was named the best place to live for millennials, as well as the best US city to buy a house.

Last November, I spent four days in Boise exploring the city and talking to business owners and residents. As someone who lives in Brooklyn and works in Manhattan, I was curious to get a feel for Boise’s downtown and see what kind of lifestyle it offers for big-city transplants. After four days, I can, for starters, say this: Boise does not disappoint.

Keep reading for a look at its vibrant downtown area, which is bustling with breweries, farm-to-table restaurants, coffee shops, and new luxury apartments.

Boise, the capital of Idaho, is one of the fastest-growing cities in the US.

boise idaho

Katie Warren/Business Insider

Boise saw an 18.2% population jump from 2010 to 2018 and was the fastest-growing city in the country from 2017 to 2018, according to Forbes.

Roughly 25% of out-of-state transplants in Boise came from California, followed by Washington, Utah, Oregon, and Texas, according to the Boise Valley Economic Partnership’s marketing manager.

While many welcome Boise’s growth, some say the influx of new residents is pricing out longtime locals. The average home price in Boise jumped almost 12% from 2017 to 2018, and average rent has increased by roughly 7% in the past year. But wages haven’t kept up, leaving many residents struggling to afford their living costs.

Some also say the growth has brought with it big-city-like traffic.

https://www.businessinsider.com/boise-idaho-downtown-breweries-coffee-shops-restaurants-2019-11

9. These schools have the largest endowments in the country — yet they’re still raising tuition during the COVID pandemic

By Jillian Berman

A MarketWatch analysis indicates that many colleges are going forward with planned tuition increases this year

In this photo provided by Jason Koski, Bryan Maley, right, a graduate student in the Master of Public Health program at Cornell University, interviews a student on campus about mask-wearing experiences as part of a public health survey, Friday, July 30, 2020, in Ithaca, N.Y. (Photo: Jason Koski/Cornell University via AP)

Christian Baran has been thinking about the value his college tuition is supposed to be buying since the spring.

Baran, 21, was a sophomore at Cornell University when the school, like most others, rushed students home and into online classrooms in March as the reality of the pandemic began to set in. Baran thought his family might get some sort of tuition refund, given that the experience was so different from what he thought his tuition was buying.

“But we didn’t get anything,” Baran said. Like almost every college in the country, Cornell didn’t give back any tuition money, but the school did provide rebates for housing and dining contracts.

Now, as the start of the fall semester at the school approaches, the school is moving forward with a planned tuition increase of 3.6% that was approved in January before the pandemic. Cornell, which is planning to bring students back to Ithaca and offer some in-person classes, is expecting to increase the amount of financial aid it awards, and will be drawing more than typical from its endowment in fiscal year 2021 to generate an additional $15 million.

Still, it’s not enough for Baran. “It seems ridiculous to keep paying the same amount for what seems to be an inferior hybridized education,” he said. And that’s a best-case scenario, assuming the school doesn’t end up shifting completely to remote instruction, as some have already done.

So instead of paying Cornell tuition, Baran decided to enroll in community college for the fall semester and hopefully return to Cornell in the spring. “I don’t think that it’s worth it,” he said.

Cornell is one of at least 39 U.S. institutions whose endowments are in the top 100, that is going ahead with a planned tuition increase for undergraduates this upcoming academic year, according to a MarketWatch analysis. We found that 35 others are planning to keep tuition the same as last year and five are discounting tuition from previously announced levels. (Of the other institutions in the top 100 endowments, four are based in Canada, four are institutions serving only graduate students and several did not provide the requested information by press time. We will update when we hear back).

Colleges’ tuition policies for the fall

Some schools are cutting tuition, while others are moving forward with planned increases. See the full list here:

https://www.marketwatch.com/story/at-many-schools-college-will-cost-more-than-last-year-despite-covid-disruptions-11598262606?mod=home-page

10. The Simplest Ways To Make The Best Of Your Life.

https://www.pinterest.com/pin/422281201654500/

Disclosure

Lansing Street Advisors is a registered investment adviser with the State of Pennsylvania..
To the extent that content includes references to securities, those references do not constitute an offer or solicitation to buy, sell or hold such security as information is provided for educational purposes only. Articles should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any securities or asset classes mentioned. Articles have been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Securities discussed may not be suitable for all investors. Please keep in mind that a company’s past financial performance, including the performance of its share price, does not guarantee future results.
Material compiled by Lansing Street Advisors is based on publicly available data at the time of compilation. Lansing Street Advisors makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to the use such data.
Material for market review represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
Indices that may be included herein are unmanaged indices and one cannot directly invest in an index. Index returns do not reflect the impact of any management fees, transaction costs or expenses. The index information included herein is for illustrative purposes only.

Topley’s Top 10 – August 21, 2020

Daily Top Ten No Comments

1. Stock Buybacks Down 46% In 2nd Quarter…Lowest Since 2012.

Dave Lutz at Jones Trading —Provisional figures show the total spent on buybacks by companies in the S&P 500 was about $89.7bn, according to S&P Dow Jones Indices, down 46 per cent from the same quarter last year.

PKW Buyback ETF -11% vs. SPY +5%

www.yahoofinance.com

2. High-Yield Bond Trading Volumes Have Returned to Normal Levels.

Guggenheim

https://www.guggenheiminvestments.com/perspectives/sector-views/high-yield-and-bank-loan-outlook-august-2020

3.  U.S. Dollar Weakness….Dollar About to Break Thru 200 Day Moving Average on Chart…Falling Back to 2018 Levels.

UUP-Dollar right on 200 day moving average long-term weekly chart

www.stockcharts.com

4. Technology Equipment Spending Rose to a Record 50% of Total Capital Spending During 2nd Quarter

https://www.linkedin.com/in/edward-yardeni/

5.  How Much 19 Major Car Brands Make Every Second….Tesla 19th with Largest Market Cap.

Visual Capitalist

https://www.visualcapitalist.com/visualized-how-much-revenue-automakers-generate-every-second/

6. American City Budgets Under Major Erosion.

Philly Biz Journal

Editor’s note: This story is available as a result of a content partnership with The New York Times. Subscribers will see stories like this every day on our website (and in our daily emails) as an added value to your subscription.

The coronavirus recession will erode city budgets in many insidious ways. It will slash the casino revenues that Detroit relies on. It will squeeze the state aid that is a lifeblood to Rochester and Buffalo in upstate New York. It will cut the sales tax revenue in New Orleans and Baton Rouge, Louisiana, where a healthy government depends on people buying things.

The crisis has arrived faster than the damage from the Great Recession ever did. And it will cut deep in the fiscal year ahead, with many communities likely to lose 10% or more of the revenue they would have seen without the pandemic, according to a new analysis. That’s enough for residents to experience short-staffed libraries, strained parks departments and fewer road projects. The hardest-hit cities like Rochester and Buffalo could face 20% losses.

“The Great Recession was a story of long, drawn-out fiscal pain — this is sharper,” said Howard Chernick, a professor emeritus of economics at Hunter College and the Graduate Center at the City University of New York, who worked on the new analysis estimating revenue shortfalls for 150 major cities across the nation.

These numbers give a sense of the possible economic pain for cities if Congress and the White House fail to agree on a new relief package that includes aid to state and local governments. It also rebuts some of the prevailing, largely Republican arguments that have stalled those negotiations: that federal help will bail out only blue cities and those that have mismanaged their finances.

Many cities facing steep losses are in states represented by Republican senators, like Florida or Louisiana. And the analysis found little relationship between whether a place was fiscally healthy before the pandemic and the most dire projections of revenue shortfalls.

The recession is about to slam cities. Not just the blue-state ones. 

https://www.bizjournals.com/philadelphia/news/2020/08/18/the-recession-is-about-to-slam-cities.html?ana=e_ae_set1

7.  50% of Residential Real Estate Markets Strong….18% Very Strong.

https://www.linkedin.com/in/johnburns7/

8. Covid Hospitalizations Down -26% in 23 Days…Dropping 1% Per Day.

Zerohedge

There’s more: as BofA also points out, “we continue to see clear signs the Coronavirus is rolling over in the US as the number of people hospitalized due to COVID-19 declines at a rapid pace of about one percent a day (26% in 23 days).”

Extrapolating, this rate of decline means that there will be zero covid-related hospitalizations around the Nov 3 election day, a feat that if marketed properly, could mean the differnce for Trump between victory and defeat.

The COVID-19 Pandemic Is Rolling Over: The Number Of US Hospitalizations Is Declining By 1 Percent Per Day by Tyler Durden

https://www.zerohedge.com/medical/coronavirus-rolling-over-number-us-hospitalizations-declining-1-percent-day

9. Mental Fitness Pyramid. 

 

Mental Fitness | Physical health, Holistic health, Healthy lifestyle

 

https://www.pinterest.com/pin/219198706848234748/

10. Four Steps To Repair Broken Trust

The pandemic could break the bond of trust with your people. Here’s how to fix it.

BY PETER COHAN, FOUNDER, PETER S. COHAN & ASSOCIATES@PETERCOHAN

This moment is a high-stakes test for business leaders. While the Covid-19 pandemic threatens the financial viability of many organizations, an even more fragile and vital resource is at risk: the trust between the leader and the employees.

It is very easy for a leader to lose trust when people are feeling fear. A simple question such as “Will the organization provide daily reports on the health of employees and others working on our buildings?” can erode or build trust. As I wrote in Value Leadership, the leader can build trust by promising to provide such information and then — crucially — fulfilling that commitment.

Other responses — such as writing down the question and hoping it does not recur or promising to provide the information and not following through — can result in an abrupt erosion of trust. When trust is lost, employees will start looking for a way out.

The good news is that leaders can rebuild lost trust through a formula. According to First Round Capital,

Trust = (Credibility + Reliability + Authenticity) / (Perception of Self Interest)

What does this mean? Simply put, people trust you more if they believe that you know what you are talking about, if you do what you promise to do, if you are easy for others to know, and if they see you as putting the organization’s interests above your own.

If you have lost trust with your people, here are four ways to use this formula to help you rebuild it.

1. Diagnose and rebuild lost credibility. 

Credibility comes from having the knowledge, experience and familiarity to perform a particular role well. The pandemic has certainly put leaders in a situation in which they are forced to deal with problems that require knowledge and experience that they lack.

Leaders who are perceived as losing credibility should ask their employees to explain why. If that loss of credibility comes from a lack of expertise in dealing with a new problem created by the pandemic, the leader should simply admit that weakness and move quickly to hire a colleague who can supply the needed expertise.

2. Jump start your reputation for reliability. 

If you’ve made promises to people and then failed to deliver, you are in a precarious position. If you are lucky, people who depend on you will give you a serious tongue-lashing to make sure you understand that you have made a huge mistake that could cost you your leadership role.

In response, you should admit that you made a mistake and ask for forgiveness. Then begin rebuilding your reputation for reliability. As I wrote in Value Leadership, the key is to promise a measurable outcome for your organization by a specific time and deliver on that promise. Only if you repeat this process consistently can you rebuild your reputation for reliability.

3. Make yourself easier for others to know. 

The term authentic leadership gets thrown around frequently these days — but what does it really mean? In my view, others will perceive you as authentic if you reveal to others what makes you tick by telling stories about yourself.

Last month I had lunch with the CEO of a tech startup who did this well. He was a base guitar player in a punk rock band who had a child and needed to make a living fast. He found his way into a sales job which he loved because all he had to do to excel was to make his sales targets.

In a few minutes, this CEO shared his essential values — a rebellious, independent nature who does what it takes to take care of people for whom he feels responsible.

4. Act more for others than for yourself.

A leader should be the opposite of command and control — meaning that the organization revolves around satisfying the ego and obeying the orders of the one in the big office.

For leaders to sustain trust, they must serve the people in the organization. How can you do that? Start by articulating a clear and inspiring purpose that attracts and motivates people. Next, listen to the people you’ve attracted to your team and remove the obstacles that creep up to impede their initiatives to realize that inspiring mission..

If your interactions with people make them feel that you are putting the organization’s interests above your own, you will further enhance the trust you need to lead effectively.

AUG 16, 2020

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

https://www.inc.com/peter-cohan/four-steps-to-repair-broken-trust.html?cid=sf01003

Disclosure

Lansing Street Advisors is a registered investment adviser with the State of Pennsylvania..
To the extent that content includes references to securities, those references do not constitute an offer or solicitation to buy, sell or hold such security as information is provided for educational purposes only. Articles should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any securities or asset classes mentioned. Articles have been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Securities discussed may not be suitable for all investors. Please keep in mind that a company’s past financial performance, including the performance of its share price, does not guarantee future results.
Material compiled by Lansing Street Advisors is based on publicly available data at the time of compilation. Lansing Street Advisors makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to the use such data.
Material for market review represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
Indices that may be included herein are unmanaged indices and one cannot directly invest in an index. Index returns do not reflect the impact of any management fees, transaction costs or expenses. The index information included herein is for illustrative purposes only.

Topley’s Top 10 – August 20, 2020

Quarterly No Comments

1. Hottest Momentum ETF in U.S. is QMOM

(Alpha Architects)  https://alphaarchitect.com/

QMOM +26% vs. MTUM +15.5% vs. SPY +5%

www.yahoofinance.com

Concentrated MO MO  50 Holdings

https://etfdb.com/etf/QMOM/#holdings

2. Five Year Inflation Expectations Well Off Bottom

Markets were paying close attention to minutes from the Fed’s recent meeting due later in the day for any hints on what the Fed could announce in September – Some investors speculated the Fed will adopt an average inflation target, which would seek to push inflation above 2% for some time.

The $20 trillion U.S. Treasury market is giving the Federal Reserve a thumbs-up for its efforts to revive inflation after the coronavirus pandemic threatened to inflict a damaging bout of deflation on the U.S. economy – The best measure of that is inflation-adjusted interest rates on 10-year Treasury bonds, which have plunged well below zero as nominal yields held fairly steady. Other signs of success include rising expectations for future prices among U.S. households

Dave Lutz at Jones Trading

3. Utilities Dividend Vs. 10 Year at 25 Year High.

Liz Ann Sonders-Schwabhttps://twitter.com/LizAnnSonders

Utilities Still Well Below Highs

www.stockcharts.com

4. I Agree with Ben Carlson…The Chart Almost Looks Fake….TSLA

https://twitter.com/awealthofcs/status/1296100869998616582/photo/1

5. Gold at Historically High Levels in Real (Inflation Adjusted) Terms

Larry Swedroe

As you can see in the following table, the recent rally in gold has it trading at historically high levels in real terms.

How important is the real price of gold in terms of future returns? In their 2015 study “ The Golden Dilemma,” Claude Erb and Campbell Harvey found that “the real price of gold was a more important driver of future nominal and real gold returns than the realized rate of inflation.” With that in mind, is now a good time to buy gold? Erb, Harvey, and Tadas Viskanta, authors of the August 2020 paper “ Gold, the Golden Constant, COVID-19, ‘Massive Passives’ and Déjà Vu,” analyzed the historical evidence to help investors determine the answer to that question.

Now Might Not Be A Good Time To Buy Gold  https://seekingalpha.com/article/4369361-now-might-not-be-good-time-to-buy-gold

6. Millennials Not Going for Big Oil Careers

By Rebecca Elliott-WSJ

https://www.wsj.com/articles/oil-industry-frets-about-recruiting-its-next-generation-of-workers-11597763882?mod=itp_wsj&ru=yahoo

7. Number of Patents Issued Since 1999 Has Doubled.

Jim OShaughnessy

8. Lots of Good News on Housing Starts But We Are Seeing Spike in Mortgage Delinquencies.

Adam Tooze, @adam_tooze

Mortgage delinquencies spiked in the second quarter. As the unemployment crisis deepens, will the surge continue? Data from the invaluable

@SoberLook, https://thedailyshot.com/2020/08/18/the-ongoing-shift-to-suburbia-in-search-of-home-office-and-classroom/

https://twitter.com/adam_tooze/status/1295757939018358784/photo/1

9.Your Mortgage Refinance Could Cost Thousands More Thanks To New Fee

Natalie Campisi, Forbes Staff

Refinancing is set to get more expensive this fall. A new fee, known as the “adverse market refinance fee” (Fannie Mae) or the “market condition credit fee” (Freddie Mac), will be assessed to most refinance mortgage loans sold to Fannie Mae and Freddie Mac starting Sept. 1. The fee is a flat 0.5% or 50 basis points of the total loan amount, adding hundreds or even thousands of dollars to the cost of a refinance.

The new fee comes at a time when mortgage rates are falling to record-breaking lows and refinance activity is on the rise. Mortgage refinance activity last week was up by 9% from the prior week and was 47% higher than the same time last year, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 7, 2020.

The reason for the fee is to offset higher risk due to a shaky economy, both Fannie Mae and Freddie Mac said in bulletins issued Wednesday night. Most refinances, including cash-out refinances, would be subject to the fee. 

“As a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty, we are introducing a new Market Condition Credit Fee in Price,” according to a statement by Freddie Mac.

New Fee Runs Counter to Fed’s Efforts to Keep Costs Down

For a borrower refinancing a $350,000 mortgage, the fee would tack on an additional $1,750. For someone with twice that mortgage, the fee would add $3,500 on a $700,000 refinance.

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For some, this fee is counterproductive to efforts the Federal Reserve has made since the start of the pandemic to encourage lending activity while making loans affordable by keeping mortgage interest rates low.

“The housing market has been able to withstand many of the most severe effects of the COVID-19 pandemic,” MBA President Bob Broeksmit said in a statement. “The recent refinance activity has not only helped homeowners lower their monthly payments, but it is also reducing risk to the (government-sponsored enterprises) and taxpayers. At a time when the Federal Reserve is purchasing $40 billion in agency (mortgage-backed securities) per month to help reduce financing costs for mortgage borrowers to support the broader economy, this action raises those costs and undermines the Federal Reserve’s policy.”

Fee Also Applies to Most Specialty Loan Refinance Programs 

Both Fannie Mae and Freddie Mac have loan programs designed to help a wide variety of borrowers in need. These programs have caps on the total amount of fees that can be assessed, however, the new adverse market refinance fee would apply to all of these programs, regardless of the cap:

·         Fannie Mae’s HomeReady refinance program is designed for borrowers facing financial challenges, and its high loan-to-value (LTV) refinance program offers a chance for borrowers making on-time payments to refinance their mortgages even if their LTV exceeds the maximum for standard cash-out refinances. 

·         Freddie Mac’s Home Possible mortgage refinance program is for low-income homeowners, and its Enhanced Relief Refinance mortgage program was created for borrowers who can’t refinance because of a drop in property values. 

The only loans that are exempt from the new fee are home loans that qualify for single-closing interim construction financing and permanent financing, which is one mortgage for borrowers who are building new homes. This end-to-end loan covers buying the land, through the construction phase into the permanent home loan.

What You Should Do If You Want to Refinance

Despite the new fee, some borrowers will still be able to save money on their monthly mortgage payments, as well as the total interest paid on their loans, by refinancing. Mortgage rates are currently tracking below 3%, which puts nearly 18 million people in line to save money by refinancing, according to Black Knight, a mortgage technology, data and analytics provider.

Along with the new fee announced on Wednesday, there are closing costs that should be factored into your decision. Typically, these costs are about 2% to 3% of your total loan amount. Closing costs usually include title and insurance fees, appraisals, application fees and, in some areas, attorney fees. 

Other things to consider before you refinance is whether you plan on moving. If you’re going to sell your home within a few years, you likely won’t save enough money refinancing to make up for the amount you spend in closing fees. 

Finally, make sure your credit score is high enough to snag the interest rate you need to save money. Although many lenders are advertising sub-3% rates on 30- and 15-year mortgage refinances, usually only borrowers with above average credit scores (in the 700 and above range) will qualify.

Follow me on Twitter or LinkedIn. Send me a secure tip. 

Natalie Campisi

https://www.forbes.com/sites/tmobile/2020/08/13/mobility-with-a-conscience-how-seattle-goodwill-gives-marginalized-communities-hope-in-a-pandemic

10. Ten habits of bad management

 Image from Shutterstock.com

200

Jan 282019by Andre de WaalPrint This Article

If you’re looking to run a high-performance organization, you need to be able to be able to recognize the signs of bad management. If low-performing managers are not dealt with, an organization will never be able to become excellent. Here are ten habits to look out for that no organization should put up with:

Bad managers clean up the mess of their predecessors – even when there is no mess.

When appointed in a new position, the bad manager claims that the predecessor has made such a big mess of the department that it will take at least one year, if not more, to get everything in order, and of course the bad manager cannot possibly work yet on achieving the departmental targets this year…maybe next year too.

Bad managers are always busy, busy, busy

They are involved in many, many projects; in fact, they’re so busy that there isn’t enough time to work on regular tasks! And because these projects are vital for the success of the organization (or so they say), bad managers cannot possibly be expected to work on their departmental targets. They will get to that when their other projects are finished…which they never are.

Bad managers know how to play the goals game

They know that departmental goals should be loose, with lots of slack, which means the targets will be very easy to achieve. Bad managers will never get optimal results from their departments; but that doesn’t matter to them, bad managers would rather have low performance than run the risk of punishment for falling short of ambitious targets.

Bad managers only manage from a distance

Bad managers love to use performance indicators because these make it possible to practice hands-off management. This in turn makes it easy for bad managers to avoid the day to day department activities altogether. And of course, if anything goes wrong, they can dodge accountability: they weren’t there, after all!

Bad managers always blame somebody else

Bad managers have a host of excuses at their disposal when they don’t achieve departmental targets. They blame the management reports because these do not accurately reflect performance; their own reports show that they did achieve the targets.

Bad managers blame the outside world: the economy was going down, it has rained too much, it hasn’t rained enough, whatever – but that is the reason everything was going against the department and therefore it was just impossible to achieve the targets! Next year, they say, will be better. They blame the weakest colleague, it was his or her fault the department floundered. So the organization first needs to hire someone new before they can be expected to work on achieving their targets.

Bad managers make lengthy, impressive plans

When writing up the latest game plan, bad managers know that expansive, wordy, and complex plans always impress top management because it gives the impression that they are on top of their game and have thought of everything.

They also know that you can bury all kinds of assumptions and preconditions in these verbose plans, which function as safeguards when top management starts complaining that goals have not been achieved (“Well, you knew that could happen, we put it on page 237, section 3, line 5 …”).

An additional advantage is that employees will not read nor understand these, so it will take a lot of time before the department can actually start working on realizing the plan, if ever.

Bad managers only communicate in one way

Bad managers are all capable of holding an open forum for employees to voice concerns, questions, and suggestions. This sounds like the mark of a good manager, right? However, the bad manager only feigns interest in employee feedback, and won’t actually act on what he or she hears. Instead, bad managers stick to their own plans. If people complain, the bad manager will use open forums against the participants, claiming that any incompetency is the fault of everyone.

Bad managers only have eyes for the shareholder

Bad managers know who butters their bread: the shareholder. Therefore, bad managers work diligently on satisfying these shareholders, even it this works to the detriment of the organization’s long-term interests.

Bad managers are real Machiavellians

They have Machiavelli’s book, The Prince from 1513 on their bedside table and turn to it often for advice on how to practice effective “divide and conquer” strategies: manipulating colleagues, employees and bosses. As a result, the targeted members in the organization become preoccupied with guarding their backs instead of focusing on growing the department.

Bad managers have an exit strategy

When the organization is on the verge of holding a bad manager accountable for his or her (in)actions, the bad manager moves on to another organization. In fact, the bad manager had plotted his or her exit strategy for a long time, and always has a fall-back organization where he could flee.

It goes without saying that these ten habits don’t exist in HPOs! But as most organizations are not HPO yet, it is good for you to be able to recognize the signs of bad management. This way you can deal with these ‘bad managers’ quickly…which is, after all, also a characteristic of a HPO manag

https://www.management-issues.com/opinion/6398/ten-habits-of-bad-management/

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