Are Insurance Companies Watching Your Facebook? | Where the Money Is - 9/5/13 | The Motley Fool

TL;DR

Jumbo mortgage rates drop, insurance companies may use social media to investigate claims, and Floyd Mayweather has $123 million in a single bank account.

Transcript

jumbo mortgage rates are a bargain our insurance company is sneaking around on your social media and Floyd Mayweather has a whole lot of cash you're in the right place folks because this is where the money is welcome to the show folks I'm Matt copen heer and as always right beside me is David Hansen we've got a great show today folks on the kickoff... Read More

Key Insights

• 📔 The Federal Reserve's beige book report suggests continued moderate economic growth.
• 🚗 Increased US auto sales benefit banks in the auto lending space.
• ☠️ Jumbo mortgage rates dropping below conforming loan rates is an unprecedented trend.
• 😘 PNC Financial's stock has potential for growth due to its expansion and low valuation.
• 💳 Discover Financial's opportunities lie in gaining market share in the credit card industry.
• 👨‍💼 Marshall McLennan's risk consultancy business presents opportunities in the insurance industry.
• ❓ Universal Insurance Holdings' performance is positively impacted by the absence of major hurricanes in Florida.
• 👨‍💼 White Mountain Insurance focuses on underwriting results and has a solid business model.

Questions & Answers

Q: What does the Federal Reserve's beige book report reveal?

The beige book report shows moderate economic growth in most of the nation, indicating a steady and stable economy.

Q: Why is the increase in US auto sales good news for banks in the auto lending space?

Banks benefit from increased auto sales as it leads to more demand for auto loans, providing an opportunity for banks to generate higher interest rates and expand their customer base.

Q: Why are jumbo mortgage rates falling below conforming loan rates?

The drop in jumbo mortgage rates is due to several factors, including changes in Fannie Mae and Freddie Mac's standards and banks' focus on making loans to creditworthy borrowers. Banks have ample deposits and are looking for attractive investments, leading to lower rates on jumbo mortgages.

Q: What are the key factors to consider in PNC Financial's stock pick?

PNC Financial has expanded its operations and acquired RBC Bank, resulting in a diversified business mix. The stock has a relatively low valuation and potential for double-digit returns on equity. However, there may be concerns related to its stake in BlackRock and potential regulatory issues.

Summary & Key Takeaways

• The Federal Reserve's beige book report reveals moderate economic growth in most of the nation.

• US auto sales have increased in double digits in August, which is good news for banks in the auto lending space.

• Jumbo mortgage rates have fallen, with rates on jumbo mortgages lower than rates on conforming loans.

• The hosts review their round four picks in a fantasy stock draft, discussing PNC Financial and Discover Financial.

• The hosts play a game of "rank it" with insurance stocks, ranking Marshall McLennan, Genworth Financial, Universal Insurance Holdings, White Mountain Insurance, and China Life Insurance.