Archive for April, 2010

Lost Wallet in NY (4/27)

April 27th, 2010 Michael McDonough Comments off

I  lost my wallet on 2nd ave between 51st and 53rd on the evening of 4/27 in NY.  If anyone has found it I will be extremely grateful if we can be reunited.  Please shoot me an email at  Thanks! -Michael McDonough


Mortgage Rates Begin To Climb

April 7th, 2010 Michael McDonough Comments off

As expected mortgage rates have begun to climb.  On March 31st, as planned the Fed terminated its mortgage backed securities (MBS) purchase program after buying $1.25trn of the instruments–keeping mortgage rates artificially low.  According to the Mortgage Bankers Association (MBA), the average rate for a 30Y mortgage already climbed to 5.31%  the week ending 4/2, compared to 5.04% a week earlier.  I expect rates will continue to climb peaking somewhere between 5.5% and 6.0%, before leveling off.  This will of course but a strain on any housing recovery.  The chart below highlights the Fed’s net MBS purchases and 30Y mortgage rates:

Source: Bloomberg


Weekend Musings: High Tech Stein Keeps Beer ‘Frosty’ For Days

April 3rd, 2010 Michael McDonough Comments off

Source: Bloomberg

As a fan of beer, technology, and business I may have stumbled upon the perfect article this morning on Bloomberg to write a quick weekend note.  Apparently, a nuclear scientist–who looks like he would feel quite at home in any brewery–crafted a beer mug designed with the same technology used to store liquid nitrogen.  The effect beer, that will stay ‘frosty’ for days once placed inside the mug.  The problem , the stein doesn’t come cheap, currently they are being sold for $375 (the gallon size).  However, considering I recently purchased a $400 vacuum as a gift for someone, the high price point for a magic beer stein doesn’t seem so bad!

Apparently, Phil Broughton–the creator–presently an employee of UC Berkeley, came up with the idea while on forced furlough in September due to California’s state budget problems.  Prior to working at Berkeley, Phil had positions at the Lawerence Livermore Lab and the Amundsen-Scott South Pole Station (suffice to say he is a bright guy).  It was reported that while working at the South Pole station he twilighted as a bartender and would increase the alcohol content of drinks by removing excess water with liquid nitrogen.  I am beginning to think if there was a Nobel Prize for the art of drinking, then this guy would be a serious contender.  The steins can be purchased here, but look to be presently sold out.   I do not receive any commission, or any advertising revenue for the link, but nevertheless if you have the money I think you should buy this.

And in case you missed it you can buy this miracle stein here:

As a side note, to see my most recent column on Bloomberg please click here (I wish the topic was as interesting!)


Payrolls Indicate to Markets; Strong Labor Recovery Not Just Yet

April 2nd, 2010 Michael McDonough Comments off

Payrolls moved up by +162K in March, compared to a forecast of +184K.  Combined January and February revisions totaled an additional 40K jobs created.  March added 48K census workers making the ex-census change in payrolls a modestly strong +136K.  It is impossible to determine to what extent weather had on this report, but I expect payrolls should maintain modest growth, at best, over the next several months (ex-census).  The unemployment rate remained steady at 9.7%, as the workforce continues to increase.  This report is essentially neutral for the market.  Long term unemployment continued to tick up, while average hourly earnings fell -0.1% from last month.  Hours worked remain relatively low at 34.0%, and will likely move up a bit more before we see a big turn in hiring.  While overall these modest gains are positive, it is unlikely it will have a significant effect on Fed policy over the short-term.

On another note, temp employment continues to tick up, however, it has begun to come off of its recent highs.  This index tends to be a good forward looking indicator toward the overall payroll number:

Source: BLS

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