Re-Fi index plunges

The Refinance Index decreased 24.6 percent from the previous week. The Refinance Index has declined six straight weeks and is at its lowest level since the week ending April 30, 2010. The seasonally adjusted Purchase Index decreased 2.5 percent from one week earlier.
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The average contract interest rate for 30-year fixed-rate mortgages increased to 4.85 percent from 4.84 percent, with points decreasing to 0.96 from 1.33 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

Home Inventories

Click on graph for larger image in graph gallery.

Although inventory decreased from October to November, inventory increased 5.4% YoY in November. 

The year-over-year increase in inventory is especially bad news because the reported inventory is very high (3.71 million), and the 9.5 months of supply in November is well above normal. 

IEA Raises Oil Forecast to the Second biggest increase in 30 yrs.

IEA raises forecast for global oil demand

ByJavier Blas, Commodities Editor

Published: December 10 2010 09:53 | Last updated: December 10 2010 09:53

Global oil demand will grow more this year than previously expected, the International Energy Agency said on Friday, putting pressure on the Opec oil cartel to boost supplies and stop prices from hitting $100 a barrel.

The western countries’ oil watchdog said that “against a backdrop of much-stronger-than-expected global oil demand”, Opec “may come under pressure to increase supplies to the market in the new year if prices continue their relentless rise”.

Opec meets on Saturday on Quito, Ecuador, to discuss its production policy. The warning is the first clear indication that after two years restraining output to avoid a decline in oil prices during the global financial crisis, the cartel’s next job will be to decide when to open the spigots and by how much to control rising oil prices.

The IEA revised upwards its estimate for global oil demand for this year and 2011 on the back of stronger-than-expected demand in North America and China.

The Paris-based agency forecast consumption rising this year by 2.5m barrels a day, the second-highest annual increase in at least 30 years, and about 130,000 b/d more than the figure given in last month’s update. For 2011, the IEA forecast oil demand would rise by 1.3m b/d, or about 260,000 b/d above its previous forecast.

“Although economic concerns remain skewed to the downside – not least if current high prices begin to act as a drag on growth –, more immediately demand could surprise to the upside,” the IEA said in its monthly editorial comment. “Recent harsh northern hemisphere weather, allied to electric power rationing in China, if sustained, could push short-term demand higher and tighten market balances further,” it added.

CMI metrics turn sharply higher

http://www.consumerindexes.com/commentary_2010_contraction_watch_full.png

EUROPE has to start thinking about the Nuclear Option

this is worth your time....by Ambrose Evans Pritchard.

Click Here to read article.

Pulse of Commerce Index

Last Week

Positives

1) Oct payrolls surprise big to the upside
2) Fed lights another fire under asset prices but are we really wealthier as a result?
3) Emerging markets continue to rally as investors seek non $ assets
4) Oct auto sales rise to best since Sept ’08 ex clunkers
5) ISM services and mfr’g indices both above forecasts
6) RBA and RBI raise rates to cool inflation pressures
7) Fed to allow healthy banks pay dividends.

Negatives

1) Huge printing of money has turned our central bank into a 3rd world one
2) Asset priced induced wealth effect is an illusion if a debased currency and higher inflation is the side effect
3) Deeper the Fed gets, the more difficult it will be to reverse
4) Commodity inflation as measured by CRB index rises to 2 year high
5) Ireland, Portugal and Greece financial concerns continue to grow
6) German Sept factory orders fall sharply
7) Sept Pending Home Sales unexpectedly fall.