The Mess That Greenspan Made - Part 40

This item from three-and-a-half years ago somehow came up the other day and, after reading through the story of our 2010 short-sale odyssey, it seemed worth hoisting up again for old times sake. The first few days of May actually mark our four-year anniversary of both arriving here in Montana and making our original offer on the house we currently live in (we had looked around quite a bit before actually moving here, but had no idea we’d be living in a condo for six months). Anyway, a short trip down memory lane…

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After this rant from six weeks ago about what, at the time, was characterized as our unsuccessful attempt to purchase a short sale property here in Bozeman, Montana, it will surely come as a surprise to most of you to learn that, while we were on vacation over the last month, the deal somehow came back to life and it is now done.

We closed two days ago.

Five-and-a-half months after we made the offer.

Now, the reason for not saying anything about this until today is that, up until the very end, we really weren’t sure that the deal would get done.

Any of you who have been involved as a buyer in a short sale surely know that there are many twists and turns along the way to a 50-50 chance (at best) of actually completing the sale and, just when you think you’ve got a clear shot to the goal line, something comes up that either nixes the deal or sets it back by a couple months.

In recent weeks, we again had more painful waits for the bank to respond with final approval letters and there were thousands of dollars in closing costs that we thought sure they would try to stick us with and some repairs that were sorely needed, none of which we ended up having to pay for.

It’s as if the short sale gods smiled upon us.

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The latest issue of the Iacono Research Weekend Update has been posted to the website and is now available for subscribers here.

There will be no changes to the model portfolio or the buy ratings this week, but last week’s model portfolio changes are taken up in the following discussion topic:

The executive summary is as follows:

Better-than-expected economic reports in both the U.S. and elsewhere in the world helped to push global stock prices higher, although heightened tensions and new violence in Ukraine tempered some of the buying late in the week, boosting demand for safe havens in the process. The U.S. Dollar continued its recent downward trajectory, aided by a non-eventful Federal Reserve policy committee meeting.

REITs continued their winning ways and the natural resource sector was mixed as commodity prices were generally lower while share prices moved higher along with the broad stock market. Precious metals and related shares saw modest price declines after a furious late-week rally, but this was not enough to reverse earlier losses as the model portfolio rose just 0.04 percent, now up 5.0 percent for the year.

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The Labor Department reported that the U.S. economy created the most new jobs in over two years and the unemployment rate fell to the lowest level since late-2008, however, it is unclear how much of the improvement is due to improving fundamentals and how much was driven by a larger than expected spring bounce after a severe winter.

A simple 3-month average shows that jobs gains rose to 238,000, the highest level since March 2012 and the fifth best reading since the recession ended almost five years ago.

Upward revisions to recent data were key in this calculation as February job gains were boosted from 197,000 to 222,000 and March job creation rose from 192,000 to 203,000, indicating the bounce-back from December and January came earlier than first believed.

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Friday Morning Links

MUST READS
Economists expect rise in jobs in April report – USA Today
Inspector general: Jobless rate not manipulated – USA Today
Ukraine PM warns of ‘most dangerous 10 days’ – Financial Times
Rebels down Ukraine helicopters, Putin denounces city assault – Reuters
Ukraine Defies Putin as Troops Move on Rebel Stronghold – Bloomberg
Speculative fever is back to 2008, with compound interest – Telegraph
A China Story You Should Pay Attention to, and One You Should Ignore – Atlantic
How Canada’s Flirtation with a China Oil Market Soured – Bloomberg
ObamaCare Saved The Economy? Don’t Believe The Myth – Investors.com
Watch Obamacare Make Health-Care Costs Soar – Bloomberg
Why Economics Failed – Krugman, NY Times
Cassandras Everywhere – Slate
It’s Only a Million – NY Times

MARKETS/INVESTING
Stocks: All about the jobs report – CNN/Money
Searching for Yield, at Almost Any Price – NY Times
GMO’S Jeremy Grantham Remains Bullish on Stocks – Barron’s
Gundlach’s DoubleLine Capital sees third straight month of inflows – Reuters
‘Bond King’ Gross suffers twelfth month of Pimco fund outflows – Reuters
Treasuries Decline Before Payrolls on Bets Companies Added Jobs – Bloomberg
Gold set for weekly drop on funds selling ahead of U.S. data – Reuters
Half of Italy’s Gold is Held in New York Fed Vault; Is Repatriation Possible? – GoldCore
Is Gold Price Manipulation Good Or Bad For Gold Investors? – GoldSilverWorlds
Internationalization Renminbi Requires Increase In Gold Reserves – In Gold We Trus
Gold price drops as holdings of top ETF fall to 5-year low – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
What millennials don’t know about the job market – CNBC
Why the first-quarter GDP may get even uglier – Washington Post
Beware Of Misleading Monthly Economic Data – Comstock Funds
Japan’s Consumption Hangover Begins as Car Sales Decline – Bloomberg
Manufacturing produces small increase in April – China Daily
Euro Unemployment Holds Near Record Amid Factory Gains – Bloomberg
Australia plans to push retirement age to 70 – Channel News Asia
The Housing Rebound Stalls – Businessweek
Theories on Why Housing Is Stalled – NY Times
Another housing bust? – Washington Post
Yellen Fed Resigned to Slower Growth – Bloomberg
The Fed needs to tell us what’s really going on – Telegraph

 
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