Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1394.3 | -5.9 | -0.42% |
| Eurostoxx Index | 2468.1 | -28.6 | -1.15% |
| Oil (WTI) | 105.23 | -0.2 | -0.17% |
| LIBOR | 0.4682 | -0.002 | -0.32% |
| US Dollar Index (DXY) | 79.244 | 0.118 | 0.15% |
| 10 Year Govt Bond Yield | 2.16% | -0.04% | |
| RPX Composite Real Estate Index | 169.77 | 0.0 |
Markets are weaker as S&P warns that Greece may have to restructure its debt again and a disappointing report from H&M. Best Buy reported better-than-expected earnings this morning and will close 50 stores.
The third revision to 4Q GDP was released this morning, unchanged from the 2nd revision at 3%. Initial Jobless claims were slightly higher than expected at 359,000. Bloomberg Consumer Comfort and Kansas City Fed come out later this morning.
Bill Gross of PIMCO told Bloomberg that the Fed will probably concentrate on supporting MBS once Operation Twist ends in June. He referred to a “sterilized twist” where the Fed would buy current coupon MBS and simultaneously repo out the Treasuries. This would cause MBS spreads to tighten. So even if the sell off in Treasuries continues, mortgage rate may not rise as rapidly.
Bloomberg had a good interview with FHFA Acting Director Ed DeMarco regarding principal forgiveness on underwater homeowners. It certainly does not appear that a mass taxpayer-funded principal forgiveness, (or cramdown for investors) is in the cards. FHFA prefers to mod interest and term first in order to make an affordable payment. If they cut the principal and the house increases in value, the borrower gets all of the benefit. If they don’t cut the principal, then taxpayers share in that upside. Ed has been a pinata to the Left who want mass cramdowns.
American borrowers fear the Repo Man over everyone else, at least according to a TransUnion survey cited in the Washington Post. It used to be that the mortgage payment was the first priority, but with foreclosure pipelines so elongated, the car loan now takes priority.
Dealbook has been the go-to place for all things MF Global. Yesterday, regulators held a hearing with several top executives of MF, who took the Fifth. The CFO has apparently offered a proffer statement, which means he is negotiating to talk.
Filed under: Morning Report |
All Things in Moderation 
Worth a read:
“Sheila Bair is still not happy with Obama on housing
Posted by Suzy Khimm at 12:19 PM ET, 03/28/2012”
…
““Trying to do this on the cheap just didn’t work,” Bair says, referring to the administration’s mass refinancing program through Fannie Mae and Freddie Mac-backed loans. “They were relying on a voluntary program with weak economic incentives and the big servicers were not putting the resources that were needed into these big servicing operations.”
Bair still believes the only way for the housing recovery to happen would be “to restructure the mortgage to get the borrower paying again, or you have to repossess the property and put it back onto the market.” ”
http://www.washingtonpost.com/blogs/ezra-klein/post/sheila-bair-is-still-not-happy-with-obama-on-housing/2012/03/28/gIQAEzdcgS_blog.html
LikeLike
Good link, jncp. I wish LMS and ‘Goose were here to chime in on Bair’s proposal.
Also from Ezra today:
On Wednesday, Reps. Jim Cooper and Steve LaTourette managed to put Simpson-Bowles to a vote before the House of Representatives. It didn’t just fail. It got crushed. The final tally was 382-38. Twenty-two of the supporters were Democrats, while 16 were Republicans. But overall, the rejection was overwhelming, and overwhelmingly bipartisan.
I applaud the 22 Ds and 16 Rs who had the guts, audacity, and temerity to vote for the bill. All of us know a D HoR will never balance the budget and a R HoR will never balance the budget. Only something akin to S-B has a ghost of a chance of righting our ship, and wishful thinking about strangling the federal government except for expanding the military on the right, or about bold new social programs of untried and therefore dubious merit on the left is just that. If wishes were horses, beggars would ride.
LikeLike
Worth a read:
“Natural gas, fueling an economic revolution
By Fareed Zakaria, Thursday, March 29, 12:44 PM”
…
“By now, the basic facts are well known. It was only a few years ago that most experts were warning of an imminent shortage of natural gas in the United States. But thanks to the efforts of a small private company, Mitchell Energy, combined with a horizontal drilling procedure called hydraulic fracking, it has become possible to extract vast quantities of natural gas from shale, which this country has in abundance.
As with so many stories of American ingenuity, Mitchell Energy had a little help. In the 1970s, the federal government initiated the Eastern Gas Shales Project and funded dozens of hydro-fracking demonstration projects. The Energy Department pioneered a technique known as massive hydraulic fracturing, a key step along the way. It subsidized Mitchell Energy’s first successful horizontal drilling in the North Texas Barnett Shale region in 1991. Between 1978 and 1992, the federal government spent $137 million to develop these technologies.”
http://www.washingtonpost.com/shale-gas-an-alternative-to-oil-that-is-bolstering-the-us-economy/2012/03/29/gIQAkIc7iS_story.html?hpid=z3
LikeLike
mark:
I’m pouting because you left me alone to deal with all these numbnuts psuedo attorneys today
LikeLike
A PERFECT example of someone with an incomplete understanding of the oil markets, posted on another blog:
“If we could push oil speculators into bankruptcy by releasing oil and driving the price down then I say go for it.”
ME: “wouldn’t that just make rich the speculators who were on the other side of the trade?”
LikeLike
“The Energy Department pioneered a technique known as massive hydraulic fracturing, a key step along the way.”
There’s that damn federal government, fouling things up again.
LikeLike
DARPA and ARPA-E are cool.
LikeLike
banned, why do you even bother with discussing markets with emotional people who don’t understand?
I finally gave up trying to explain why re-instating Glass Steagall will not prevent future bubbles. Plus Paul Krugman has a Nobel and I don’t, so I should just shut up about the Fed.
LikeLike
brent;
I’m a born contrarian, so in some ways blogging was made for me.
LikeLike
“bannedagain5446, on March 29, 2012 at 2:13 pm said: Edit Comment
mark:
I’m pouting because you left me alone to deal with all these numbnuts psuedo attorneys today”
When it comes to the Plum Line, it’s Caveat Poster. You have no reasonable expectation of quality posting commentary there.
LikeLike
“bsimon1970, on March 29, 2012 at 2:15 pm said: Edit Comment
“The Energy Department pioneered a technique known as massive hydraulic fracturing, a key step along the way.”
There’s that damn federal government, fouling things up again.”
It’s an interesting turnabout of roles, given that the environmentalists want fracking banned by the same Federal government that financed it’s development.
LikeLike
plus I come from an extended family where everybody is either a teacher or in transportation.
So I just do my teaching outside the classroom, sometimes with a blunt instrument.
LikeLike
File this under crazy talk:
“Community College to Charge More for Top Courses
By JENNIFER MEDINA
Published: March 29, 2012
SANTA MONICA, Calif. — For years now, administrators at the community college here have been inundated with woeful tales from students unable to register for the courses they need. Classes they want for essential job training or to fulfill requirements to transfer to four-year universities fill up within hours. Hundreds of students resort to crying and begging to enroll in a class, lining up at the doors of instructors and academic counselors.
Now, though, Santa Monica College is about to try something novel. This summer it will offer some courses for a higher price, so that students who are eager to get into a particular class can do so if they pay more.
The plan may be the first of its kind in the country, college officials and other higher education experts say, and if the college succeeds in implementing it, many other community colleges across the country are likely to follow. Since 2009, enrollment in California community colleges has fallen by 300,000 students, to 2.6 million, and many believe the difficulty of registering for classes is the most important deterrent. ”
…
“Officials in the California Community Colleges chancellor’s office said that they could move to block Santa Monica’s proposed tuition increase and expressed misgivings about the program. They said that it was not clear such a change was legal and that the program could limit access for students, particularly those who did not have enough money to pay for the more expensive courses.
Currently, each community college class costs $36 per credit hour. Under Santa Monica’s plan, the more expensive courses would cost $180 per credit hour — just enough to cover the college’s costs, Dr. Tsang said. ”
…
“Janet Harclerode, an English instructor and president of the college’s Academic Senate, said that many professors viewed the new plan as having a “real ick factor,” but that few saw any real alternative. Many instructors have already accepted extra students in their classrooms, even allowing a few to sit on the floor when seats were too scarce.
“We hope that this is just a stopgap measure, before taxpayers step up and the state really starts to reinvest in the colleges,” she said. “The situation is certainly not going to get better anytime soon. I don’t know what other options we have.” ”
Clearly rather than pay for the cost of the education, the solution instead is for taxpayers to “step up”.
LikeLike
jnc:
Since 2009, enrollment in California community colleges has fallen by 300,000 students, to 2.6 million, and many believe the difficulty of registering for classes is the most important deterrent. ”
Isn’t this akin to the old Yogi Berra-ism…Nobody goes there anymore, it’s too crowded?
LikeLike
jnc:
Don’t get all uppity with me as I have seen you exiting the whorehouse upon my arrival sometimes and even shared a room with you on occasion!
LikeLike
jnc:
Do you see the op ed this weekend in the WAPO about college professors? MY God the whiing the like of which you don’t hear from lifers in prison.
LikeLike
I entered the fray on PL today and got from Liam, DDAWD, Cao, and some dude named Papagnello. Some things never change
LikeLike
“bannedagain5446, on March 29, 2012 at 2:34 pm said: Edit Comment
jnc:
Don’t get all uppity with me as I have seen you exiting the whorehouse upon my arrival sometimes and even shared a room with you on occasion!”
I’m not the one complaining about the service.
LikeLike
“bannedagain5446, on March 29, 2012 at 2:36 pm said: Edit Comment
jnc:
Do you see the op ed this weekend in the WAPO about college professors? MY God the whiing the like of which you don’t hear from lifers in prison.”
Yes, I commented on it in PL. The amusing part was Krugman’s reaction which was based on no actual economic analysis but mere assertion which is a method of arguing that he is usually quite dismissive of in other circumstances.
http://krugman.blogs.nytimes.com/2012/03/25/they-work-hard-for-the-money/
Of course there’s also the rejoinders that salaries have nothing to do with tuition increases, it’s all due to sports.
The other amusing part is the parallel between the growth of tuition costs and health care costs, especially given that most universities are “non-profit” and therefore you can’t blame for profit organizations as is common in discussions of health insurance as a “market failure”.
LikeLike
Glad I had work to do and missed all that, jnc and john.
I posted about UT’s budget here some time ago and sports are self sustaining.
jncp, I believe in public education and think every state that tries to have good schools gets long term benefits for that that outweigh the tax cost, although I cannot instantly find a statistical analysis to prove this. During the Bush 41 Admin, a bunch of Fed Reserve Bank statisticians did some work in the area. I’ll try to find it. This is background for my thinking that public tax support through 2 years post HS will also be to a state’s advantage. Austin definitely grows on the back of UT, and even Austin Community College, which provides lots of folks with certifications in useful areas like computer programming.
Since 2004, Austin has had the fastest job growth of any metro in America. Houston is second.
LikeLike
JNC
Damn LOL
LikeLike
I kept posting that you people don’t understand that you’re BRAGGING about incredibly inefficient you are and how poorly run your depts are, but nobody understood what I was talking about.
LikeLike
“bannedagain5446, on March 29, 2012 at 2:52 pm said: Edit Comment
I kept posting that you people don’t understand that you’re BRAGGING about incredibly inefficient you are and how poorly run your depts are, but nobody understood what I was talking about.”
You fail to truly appreciate how far and deep the entitlement mentality has penetrated.
LikeLike
Hell froze over at the NYT Editorial page – They actually said that Obama was worse than G.W. Bush:
“March 29, 2012, 2:52 pm
Secrets and Lies
By ANDREW ROSENTHAL
Governments have good reasons for keeping secrets – to protect soldiers in battle, or nuclear launch codes, or the identities of intelligence sources, undercover agents and witnesses against the mob. (Naturally that’s not an exhaustive list.) Governments also have bad reasons for keeping secrets – to avoid embarrassment, evade oversight or escape legal accountability.
The Bush administration kept secrets largely for bad reasons: It covered up its torture memos, the kidnapping of innocent foreign citizens, illegal wiretapping and other misdeeds. Barack Obama promised to bring more transparency to Washington in the 2008 campaign, but he has failed to do that. In some ways, his administration is even worse than the Bush team when it comes to abusing the privilege of secrecy.
One example of this abuse is the government’s effort to block public scrutiny of its “targeted killing” policy – the use of drone aircraft to kill specific people identified as threats to the United States. The most notorious case is the Sept. 30, 2011, drone strike in Yemen that killed Anwar al-Awlaki, an American citizen, who United States officials say was part of Al Qaeda’s command structure. Another American was killed in the strike, and Mr. Awlaki’s 16-year-old son, also an American citizen, was killed in an attack two weeks later.
The Obama administration has refused to make public the legal documents underpinning the president’s decision to order the killing of an American citizen without any judicial review before or after the attack. So far, it has not even made those documents available to the Senate Judiciary Committee.
Accordingly, the American Civil Liberties Union has filed two lawsuits aimed at forcing disclosure. One predates the Awlaki killing, the other followed the attack. The New York Times is party to the latter: Our paper wants the government to release the legal reasoning behind the attack. The ACLU is asking for more: It also wants to see the factual information that led to the decision to kill Mr. Awlaki.
But the government is blocking any consideration of these petitions with one of the oldest, and most pathetic, dodges in the secrecy game. It says it cannot confirm or deny the existence of any drone strike policy or program.
That would be unacceptable under any condition, but it’s completely ridiculous when you take into account the fact that a) there have been voluminous news accounts of drone strikes, including the one on Mr. Awlaki, and b) pretty much every top government official involved in this issue has talked about the drone strikes in public.”
http://loyalopposition.blogs.nytimes.com/2012/03/29/secrets-and-lies/?ref=opinion
LikeLike
“I spend 70 hours a week working and there are 300 applicants for every job if I don’t want to do it!”
Not exactly a bright talent pool I would say.
LikeLike
“The Obama administration has refused to make public the legal documents underpinning the president’s decision to order the killing of an American citizen without any judicial review before or after the attack”
You mean there’s a judge somewhere that can authorize a hit?
LikeLike
mark:
Thought about this when I was working out, and came up with a prediction we can all laugh at come June.
There will be no clear majority holding in this case. It will be a plurality opinion.
3-4 justices will say that an individual mandate is always legal and the same number will say it is never legal.
However some combination of opinions will conclude that this particular mandate as written is not legal because it is overly broad and the remedy does not address the harm concerned.
In other words if the harm involved is to the health care system’s fiscal stability nothing changes by this mandate. The individual still does not have health care. The providers who lost money by treating them have not been reimbursed. The fine is a percentage of income, going into the general fund, not a derivative of the cost, or reimbursement of the providers.
On the other hand, some justice might suggest that retroactively placing the individual into a plan, charging them a fine equal to 200% of the cost of the plan and distributing the money to the providers or the high risk pool would be constitutional.
That’s my story, and I’m sticking to it until the ruling in June.
LikeLike
“It’s an interesting turnabout of roles, given that the environmentalists want fracking banned by the same Federal government that financed it’s development.”
Indeed.
The last story I saw on groundwater contamination claimed that its not the fracking, per se, that contaminates ground water, but if the well lining is not done properly. Perhaps there’s a compromise in re-re-re-regulating the drillers, including periodic testing of well integrity to ensure there is no groundwater contamination; coupled with heavy fines for companies found to be operating substandard wells.
LikeLike
I agree, Brian – it’s a technical problem with a technical solution and the solution is probably known in the industry and is probably already the “best practice”. The issue with regulating is that the regulators will have to know what the industry knows, and I am not sure they do. But they could.
LikeLike
“The issue with regulating is that the regulators will have to know what the industry knows, and I am not sure they do. But they could.”
I’d be ok with draconian rules like, if you are ever found to be the source of contamination in groundwater, you lose your license to operate.
LikeLike