For any underwriter or agent who’s done a “tenants-in-common” loan, you might want to add this story to your files. It gives a new definition to “halfway house”: http://www.breitbart.com/article.php?idØQ1UDG80&show_article1

In 1849 Abraham Gesner devised a method to distill kerosene from petroleum, thus saving more whales than Greenpeace ever will. Up until that time whale oil was the predominant source of lighting and heating energy, but it became too expensive and was replaced by petroleum-based products. Will the same thing happen with oil now? Although the amount of oil in the ground hasn’t changed much, the ability to refine the crude oil has declined relative to the demand for the product, so gas prices have increased to over $70/barrel. Ethanol is commonly mentioned as a substitute – which is causing problems of its own: just look at the price of some foods!

Is the term “blood bath” over-used and lost its impact? "It's a blood bath," said a VP at PIMCO about the current market conditions. Yes, rates have crept up. Yes, property values have gone down in some over-inflated, speculative areas of the nation, and the national median home price may have its first annual decline since the 1930’s.  Yes, some portions of the economy are slower than others: confidence among homebuilders fell in June to the lowest since February 1991, according to the National Association of Home Builders/Wells Fargo index. But overall consumer confidence is stable, rates are still low by historical standards, and property values in many parts of the US are constant or rising.

Speaking of which, in a move that surprised no one and didn’t move the markets too much yesterday, the Federal Open Market Committee (FOMC) decided to keep its target for the federal funds rate at 5.25%. Economic growth is “moderate”, despite the housing market, and the Fed feels that the economy seems likely to continue to expand at a moderate pace. So, growth is rebounding after a slowdown earlier in the year, while inflation has eased from its level in February, which matched a four-year high, and rates are on hold. We started off with a 10-yr yielding 5.09% this morning, and after Personal Income (+.4%) and Personal Consumption (+.5%) were released, it went to 5.07%. Mortgage prices are a touch better. Ahead of us we still have the Chicago Purchasing Manager’s survey, Construction Spending, and the Michigan Consumer Sentiment survey.

If you’re looking for some good summer reading, check out “Deep in Debt” by Owen A. Lott. After that I am going to read “Where are the Animals?” by Darin DeBarn. Have a good weekend!