{"id":8704,"date":"2009-06-01T08:13:15","date_gmt":"2009-06-01T15:13:15","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=8704"},"modified":"2009-06-01T08:13:15","modified_gmt":"2009-06-01T15:13:15","slug":"mortgage-market-update-what-difference-does-gm-make","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8704\/mortgage-market-update-what-difference-does-gm-make\/","title":{"rendered":"Mortgage Market Update &#8211; what difference does GM make?"},"content":{"rendered":"<p>Well, here we are on the morning many people thought would never come.&nbsp;&nbsp;&nbsp; Many people said they never expected that GM would actually go under.&nbsp;&nbsp; Well, under they are with approximately $178 Billion in liabilities and only $82 Billion in assets (and I think the $82 Billion includes the money that you and I gave them.)<\/p>\n<p>So what difference does that make for the mortgage market?&nbsp; A couple of things:<\/p>\n<ul>\n<li>It&#8217;s not a positive thing for the housing market because it &#8220;solidifies&#8221; what we all knew anyway.&nbsp;&nbsp; There are going to be additional job losses and as we all know, additional job losses equates to additional mortgage delinquencies and housing losses which is bad for the mortgage backed securities market.<\/li>\n<li>I don&#8217;t know the exact amount but there is a LOT of money out there in GM bonds.&nbsp;&nbsp; Those bonds are now essentially worthless (from what I understand, they were &#8220;exchanged&#8221; for stock &#8211; stock that&#8217;s currently trading at 75 cents per share).&nbsp;&nbsp; This is spooking the entire bond market and pushing rates higher.<\/li>\n<li>The government announced that as the &#8220;only one who would lend to GM right now&#8221; (not exactly what they said, but close) they are putting an additional $30,000,000,000 into GM.&nbsp;&nbsp;&nbsp; This makes the GM bailout the largest individual company bailout and increases the risk by the government going further in debt thereby pushing up on rates.<\/li>\n<\/ul>\n<p>So, GM, the one company that was supposedly too big to fail, failed and failing isn&#8217;t a good thing for the mortgage rate market.<\/p>\n<p>What else is happening? <\/p>\n<ul>\n<li>The ISM (Industrial Supply Management Index) showed that manufacturing is still contracting but once again it&#8217;s the &#8220;less bad&#8221; type of thing.&nbsp;&nbsp; It was slowing but not as rapidly in May as it did in April.<\/li>\n<li>Personal income rose and personal spending fell in May.&nbsp;&nbsp; That means that we all made a little bit more and guess what, we didn&#8217;t go out and spend it!&nbsp;&nbsp; For the long term health of the market, this is actually a good thing that we aren&#8217;t &#8220;over consuming&#8221; but short term, it&#8217;s quite painful because so much of our economy is based on consumers <a href=\"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8704\/mortgage-market-update-what-difference-does-gm-make\/#more-8704\" class=\"more-link\">Read more<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Well, here we are on the morning many people thought would never come.&nbsp;&nbsp;&nbsp; Many people said they never expected that GM would actually go under.&nbsp;&nbsp; Well, under they are with approximately $178 Billion in liabilities and only $82 Billion in assets (and I think the $82 Billion includes the money that you and I gave [&hellip;]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[62,29,26],"tags":[365],"class_list":{"0":"post-8704","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-dirty-laundry","7":"category-group-therapy","8":"category-lending","9":"tag-mortgage-market-update","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":3648,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3648\/mortgage-market-week-in-review-4\/","url_meta":{"origin":8704,"position":0},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"August 1, 2008","format":false,"excerpt":"Is it just me, or do Fridays keep coming around faster and faster? Maybe it\u2019s because I\u2019m so young! Any way, it\u2019s time for our \u201cMortgage Market Week in Review.\u201d We\u2019re going to focus on a couple of main topics for today: Jobs - the ADP report came out on\u2026","rel":"","context":"In &quot;General&quot;","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":13664,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13664\/i-just-feel-that-mortgage-rates-could-drop-for-a-short-period-of-time\/","url_meta":{"origin":8704,"position":1},"title":"I just &#8220;feel&#8221; that mortgage rates could drop, for a short period of time","author":"Brian Brady","date":"November 18, 2010","format":false,"excerpt":"Didn't I just tell you mortgage rates will be rising,\u00a0 ten days ago? I sure did, and I think I offered a pretty solid, fundamental explanation of how the bond bubble will pop.\u00a0 That hiss you heard, directly after my post, was the rapid escape of helium from the bond\u2026","rel":"","context":"In &quot;Investment&quot;","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8620,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8620\/what-happened-what-does-it-mean-and-where-do-we-go-from-here\/","url_meta":{"origin":8704,"position":2},"title":"What Happened, What Does it Mean, and Where Do We Go From Here?","author":"Tom Vanderwell","date":"May 27, 2009","format":false,"excerpt":"Wow!\u00a0 What a day in the mortgage and bond markets today.\u00a0\u00a0 I think it's a good thing to say that while a lot of us saw this coming, very few of us expected that it would happen today.\u00a0\u00a0\u00a0 Let's walk through what happened, what it means and where we go\u2026","rel":"","context":"In &quot;Dirty Laundry&quot;","block_context":{"text":"Dirty Laundry","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dirty-laundry\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7372,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7372\/ive-taken-the-liberty-of-posting-my-mortgage-market-week-in-review-here\/","url_meta":{"origin":8704,"position":3},"title":"I&#8217;ve taken the liberty of posting my &#8220;Mortgage Market Week in Review&#8221; here&#8230;..","author":"Tom Vanderwell","date":"March 7, 2009","format":false,"excerpt":"The Week We Woke Up I'm going to deviate from the normal format this week, because I believe that this week has deviated from the normal that we've been experiencing lately.\u00a0\u00a0 I'm calling it the Week We Woke Up. What did we wake up to?\u00a0 A couple of things: The\u2026","rel":"","context":"In &quot;Group Therapy&quot;","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9293,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9293\/whats-an-exit-strategy-and-why-does-it-matter-to-the-housing-market\/","url_meta":{"origin":8704,"position":4},"title":"What&#8217;s an &#8220;Exit Strategy&#8221; and why does it matter to the housing market?","author":"Tom Vanderwell","date":"July 24, 2009","format":false,"excerpt":"I originally wrote this and posted it on my new site, Straight Talk About Mortgages - The Bigger Picture, but I've been urged to post it here as well.\u00a0\u00a0\u00a0 So, I'm doing that.\u00a0\u00a0 Why have I set up another site?\u00a0\u00a0 It's pretty simple..... The financial and real estate world that\u2026","rel":"","context":"In &quot;Real Estate&quot;","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":13025,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13025\/lucha-libre-mortgage-reform\/","url_meta":{"origin":8704,"position":5},"title":"Lucha Libre Mortgage Reform","author":"Don Reedy, San Diego, CA","date":"August 18, 2010","format":false,"excerpt":"Last week there was some discussion about what was to have happened today in Washington. This discussion centered around whether the government would or would not take certain steps to protect the housing market through a mandated deficit funded mortgage bailout. Today, we have some new information on what Tim\u2026","rel":"","context":"In &quot;General&quot;","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/8704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=8704"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/8704\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=8704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=8704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=8704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}