Morning Report

Posted on February 14, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1344.3 -4.8 -0.36%
Eurostoxx Index 2486.5 -5.1 -0.20%
Oil (WTI) 101.08 0.2 0.17%
LIBOR 0.4976 -0.005 -0.99%
US Dollar Index (DXY) 79.279 0.144 0.18%
10 Year Govt Bond Yield 1.94% -0.03%

Markets are a touch weaker after a disappointing retail sales number. Advance retail sales for January were up .4% vs. expectations of .8%.  S&P futures sold off slightly on the number while bonds and mortgage backed securities rallied. For those who follow charts, the S&P is right up against resistance at the 1350 level.  If we break through, the next stop is 1600 or so.

European markets are flat in spite of Moody’s downgrades of Spain, Portugal, and Italy yesterday. The ratings agencies have been behind the curve for the whole crisis. European finance ministers are set to meet in Brussels tomorrow to approve a second Greek bailout.

Andrew Ross Sorkin has a good article on the Volcker Rule and the Costs of Good Intentions. At issue is where one draws the line between bona fide market making and proprietary trading. Bona Fide market making serves a purpose in that it keeps trading costs down and adds liquidity to the market. (FWIW, Paul Volcker doesn’t necessarily think this is a good thing). The crux of the issue is whether investment banks will be allowed to maintain an inventory of product. If they aren’t permitted to maintain any inventory of any size, then all trades will be agency trades.  In other words, if the bank can’t find the other side of your trade, you’re out of luck.

The CFPB has laid out a broad outline of some of the changes it expects to make for mortgage servicers. The initial steps will involve changes to billing statements – new rules to make it clearer when resets will occur, better contact information, and a statement from HUD.  An example of the new template is here.  The rules will also address forced-place insurance, where servicers can put a homeowner in a new, more expensive insurance plan if they fall behind in their payments.

Does anyone find it ironic that the rule which sets new tax rates on dividends is named after a guy who’s company doesn’t pay them?

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Happy Valentine’s Day!

Posted on February 14, 2012 by Michigoose

I’ve never been a fan of Al Sharpton, but who knew the man had such a sense of humor?  This had me laughing out loud:

The Rev on romance.

And too bad Scott’s busy this week.  A Libertarian economist’s POV on why FOX’s Megan McArdle is wrong on why brick-and-mortar universities will go away:

Assortative mating works best when the cognitive elites are able to combine signaling behaviors for their superior genes, particularly for doing economics, with the physical proximity that supplies bonding behaviors and oxytocin and also the opportunity to sniff the pheromes.

Since we got onto a first dance wedding song kick (a bit) on Mark’s Funny Valentine post last night, I’ve been listening to Al Jarreau , so here’s another one of my favorites:

After All

And, while I don’t count myself amongst the bitter folks, I thought that this story on NPR about three anti-Valentine’s Day books was amusing.

Happy Valentine’s Day, all ATiM-ers!!

Filed under: Uncategorized | 7 Comments »