Monday Market Notes

A few casual observations on the market over the past few days:

Observation #1: Alan Greenspan has really lost his juice. 

The Maestro says in plain English that a recession is possible -- nay, likely -- and the markets barely bat an eye.  This is the man that once moved markets with a single word.  This reminds me of when Stan Ross stepped back in the batting box after nine years.  He looked the same, but the fear he invoked in others was gone.

Observation #2: Iran is a mortgage rate wild card

Iran has said that they can't "turn off" the nuclear program that they've started.  Some folks in international political circles think that the United States is planning a strike.  This is creating a subtle flight-to-quality in the markets right now and is putting downward pressure on mortgage rates.

Observation #3: Sub-prime lending fears are misdirected

Sub-prime lending is getting a ton of press right now but the focus is on credit quality and the "contagion" into other lending market.  It won't happen.  More importantly, the Human Interest story is getting missed.  There will be more than a few tales of homeowners that couldn't remortgage out of their adjusting mortgages because their individual credit profile is no longer served by Wall Street.

Observation #4: Humiliation can be a great teacher

If the airline industry can be embarrassed into self-regulating, why not the mortgage industry?