Bits & Pieces (Wednesday Night Open Mic)

Yeah, I know I’m barely around. Sorry! Work, and general efforts at self-improvement, have necessitated some tough decisions about how I use my free time.


Not that I’ve ever watched pornography, but if I ever had, I certainly wouldn’t now. Turns out it can be really, really bad for you. And easy access to infinite varieties of hardcore adult materials via high speed internet is giving young men erectile dysfunction. When they’re in their late teens and early 20s! Eeek.

Technology. It always has a dark side.

Free Cookies are Never Free

Free Cookies are Never Truly Free!


In a similar vein, I found myself engaged enough by his writing to read most of Athol Kay’s Married Man Sex Life blog (can’t imagine what interested me). There are 3 years of blog posts, so it represented a lot of reading.

He recommends the Captain and First Officer model for marriage (from Star Trek), with the husband being the Captain and the wife being the First Officer. Sounds good to me, but I can’t convince my wife.

He also recommends that couples have sex every night. I can’t convince the wife on that point, either.

There Is Nothing Safe in This Room . . .

The video for Billy Idol’s White Wedding, only with much more literal lyrics. It made me laugh.

The video for Tears for Fears “Head Over Heels” is really awesome, too.

Apparently, doing literal videos is a thing. Lots of different people, at varying qualities, have posted their own literal videos on YouTube. Hmmm.

Morning Report 6/20/12

Vital Statistics:

  Last Change Percent
S&P Futures  1352.0 1.4 0.10%
Eurostoxx Index 2198.5 0.5 0.02%
Oil (WTI) 84.09 0.1 0.07%
LIBOR 0.468 0.000 -0.05%
US Dollar Index (DXY) 81.24 -0.142 -0.17%
10 Year Govt Bond Yield 1.64% 0.02%  
RPX Composite Real Estate Index 180.5 0.2  

Markets are slightly firmer as Antonis Samaras looks to be sworn in as premier of the new coalition government in Greece. This is taking pressure off of Italian and Spanish borrowing rates as well. As we approach the end of the quarter, we begin preannouncement season, where companies that are going to miss their quarterly estimates fess up. Today’s victim:  Proctor and Gamble which is lowering its revenue and profit outlook on European weakness.  The earnings season officially kicks off in a couple of weeks with Alcoa announcing on July 9.

Other than Greece, markets will focus on the FOMC announcement later today, particularly with respect to Operation Twist, which is scheduled to end soon. There has been speculation that the Fed would continue Operation Twist, perhaps by buying mortgage backed securities directly instead of the 10-year. Don’t forget we have gotten 73 basis points worth of stimulation in the last 3 months courtesy of Europe, while mortgage rates have not participated fully.  That said, since the 10-year bottomed at 1.45% in early June, the underperformance has been correcting. See chart below:

 

 

The Fed is conducting Operation Twist because it wants mortgage rates down, not because it thinks the 10-year bond is too expensive. So the Fed will undoubtedly be focusing on the spread between mortgage rates and Treasuries as well as the overall level of interest rates. 

In its June Economic Outlook, Freddie Mac notes the strength in the rental market as vacancy rates fall. This is driving construction activity and Freddie estimates that multi-fam construction will add 200,000 units this year, the most since 2008. A drop in the homeownership rate is driving this demand as well as the high downpayments required for new homebuyers. Between the historically low housing starts of the last ten years (never mind population growth), the low household formation (as new grads move back in with Mom and Dad), and historic affordability we are creating pent up demand for housing that will be released into the market once the economy picks up some steam.