Tag Archive for: oil prices

Peace Deal Dies; Rates Up; Why Trump Can’t/Won’t “Finish The Job!” NOT GOOD FOR RATES…

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Iran ended negotiations in response to ceasefire violations and Israel’s renewed attacks on Hezbollah in Lebanon. Iran is also threatening to close the Strait of Hormuz. As a result, oil prices spiked, and interest rates followed. Per the likes of Luke Gromen, Exxon’s CEO, Peter Zeihan, and Doomberg – energy prices are only going to continue to climb now because so much production is now offline or restricted. And – more importantly – prices will also spike because much of the world is now running off its energy reserves, which will soon run out. And worse, myriad other prices will spike because so many other products need to travel through the Persian Gulf (making the midterm elections pretty scary for Mr. Trump).Read More

Gorgeous $1.2M Home In $4M Area Is Not Lendable; Many No Income Verification Loans

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Oil and bond traders clearly believe a legit Iran peace deal is in the works (despite skepticism from almost everyone else), as both oil prices and interest rates have fallen.Read More

Expect Higher Rates In The Near Term; Two Huge Takeaways

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I predicted mid to low 5% mortgage rates later this year several times in blogs and talks – but I did not expect three things: Ukraine to get so good at attacking Russian oil facilities. The Iran war, and its continuance. And Too fast of an increase in the money supply. As recently as two weeks ago, I discussed energy analyst Doomberg’s reminder that oil producers always overproduce in response to high oil prices, which always results in gluts later on. Doomberg predicts that oil will drop to as low as $30 per barrel (from $105 today). But that could take several years to play out. High oil prices push up all other prices, sparking the inflation concerns that have been pushing rates way up since the Iran war started. Iran’s resistance and Trump’s escalatory language pushed oil prices up to a new high today, and rates are up again as a result.Read More

Uh Oh…Oil’s Up; Credit Scores – A Brief, Fascinating History – Pointing To Where We’re Going

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Oil was way up this morning, as were gold prices – and I was very worried about the ceasefire collapsing! But… oil prices just fell again, suggesting that something is signaling to oil traders that the ceasefire still has a chance to work out (whew!). A few interesting factoids: Every time oil prices double, America goes into a recession. High oil price recessions are confusing for bond investors – do they demand low yields because of slow growth or high yields because of oil-induced inflation? Oil prices QUADRUPLED from 1973 to 1974 (a fact I’ve shared before because it is so interesting) – brutalizing the American economy.Read More

Ceasefire Pushes Rates Way Down; Will It Hold? Ask The Markets, NOT The Pundits

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It was an amazing thing to behold! I watched the 10-year Treasury yield fall almost 15 basis points or 0.15% (a huge drop) very quickly when the ceasefire was announced yesterday. I also watched oil prices drop from $117 per barrel to only $92 per barrel – and I was gleeful. But then I saw “Iran’s 10 Point Plan” (copied below) – and my heart sank. I thought and still think … “NO WAY WILL THIS CEASEFIRE HOLD…given Iran’s demands.”Read More

Why We Could See 9% Rates By June

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Uh oh… There is a real risk we could see 8%+ mortgage rates over the next few months. Economist Steve Hanke is on the warpath, sharing post after post about the enormity of the threats to the world’s oil supplies. Here is a post in which commodity markets guru, Jeff Currie, explains that we’re facing one of our biggest oil supply shocks EVER, but we have not yet felt it because countries are still able to draw down reserves.Read More

Can Non-Citizens Still Get Mortgages?

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Oil prices – which have been sparking inflation fears and driving rates higher – rose again over the weekend. But rates fell sharply today in the face of rising oil prices. Rates fell because the prospect of a weaker economy outweighed inflation concerns. The University of Michigan Consumer Sentiment Index came in very weak, particularly regarding employment concerns; 61% of participants expected unemployment to increase over the next 12 months.Read More

Seller Rent Back Rules; Two Forces That TERRIFY & BEAT Trump and All Presidents

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President Trump was panicking last night. Guaranteed. Sheer panic. This is because, in what was the most interesting weekend in finance in the last 18 years, there were two forces that brought Mr. Trump to his knees. I will explain why below, but first, a quick reminder: Sellers can rent back a property they just sold (and remain in the home) for up to 60 days after close of escrow.Read More

Watch Oil Prices For War Status; Danger: Arterial Through Streets!

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When I want to know how the Iran war is going, I don’t check CNN (“We’re getting crushed! WWIII Is Here! Trump eats babies!”), and I never check Fox (“We’re kicking ass and taking names! The war was over last week, and high oil prices are propaganda! Trump walks on water!”). In other words, I don’t trust war updates that involve people, because people invariably have agendas that influence their reporting, and even the best journalists can be swayed by propaganda. What I do trust, though, is the oil markets. The reason, as I have explained several times, is that oil buyers and sellers can never afford to have an agenda. They have to look only at reality, or they can lose tens of millions, or even billions, of dollars.Read More

Fed Day! Should The Fed Cut Rates To Offset High Oil Prices?

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Today is “Fed Day” – when the Fed announces whether or not it will cut rates. And – given that PPI (Producer Price Inflation) came in hotter than expected today, the Fed will very likely not cut. PPI is from February too, BEFORE the Iran war and the run-up in oil prices, so we can expect an inflation-leery Fed to be very concerned.Read More

Irony: Today’s Very High Oil Prices Will Result In Very Low Oil Prices & 4% Mortgage Rates (A Very Bad Thing)

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Prior to the Iran war, the average mortgage rate was 5.99%. Today’s average is closer to 6.4%, and our brief purchase-and-refi boomlet has come to a screeching halt. Rates shot up so quickly because oil prices shot up so quickly – from about $65 per barrel (WTI) to about $94 per barrel today. So that is why loan officers and real estate agents should care so much about oil prices; they have an enormous influence on rates.Read More

Woohoo! Another Financial Crisis Is Coming – And It’s Gonna Be Bad!

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“What’s good for General Motors is good for America!” That is a slight bastardization of a quote famously uttered by GM’s CEO in 1953 – and he was largely right. What is ironic, though, is that the opposite is true for the mortgage industry (and for real estate).Read More

Oil & Rates Spike WAY UP Again…Then Plummet; We Now Know When The War Will End; Whew!

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All hell broke loose in the financial markets yesterday – in what had to be one of the most interesting weekends ever. First of all, WTI (oil prices) spiked to almost $120 per barrel – nearly double the $65 price we saw before the war (and $30 higher than the $90 price we saw Friday). Needless to say, interest rates spiked too in response – and the world (especially mortgage guys, the Trump administration, and Asian countries dependent on oil imports) panicked. Oil spiked because of direct attacks on Iran’s oil facilities, because the Strait of Hormuz remained closed (choking off oil shipments), and because countries near Iran shut down their oil and liquid natural gas production.Read More

Should Buyers Wait For Lower Rates To Buy?

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Oil prices (WTI) spiked up to $90 per barrel (from only $66 prior to the war), and rates rose again in response. Interesting thing number #1: Inflation fears trump weak labor markets. A very weak jobs report surfaced today, which would normally have caused rates to plummet. But higher oil prices outweighed the very weak job numbers, and rates rose. Interesting thing number #2: Oil spiked far higher when Putin invaded Ukraine. WTI oil prices were in the $80 range when Putin started to build up his forces in anticipation of his Ukraine invasion in early 2022. After the invasion, prices spiked up to almost $116 in a few weeks – a $36 increase. What is interesting, though, is that Russia was only responsible for about 10% to 12% of the world’s oil production in early 2022, vs. 20% for the Persian Gulf region. This implies that the markets thought the Ukraine war would last longer and be more severe.Read More