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 | 1337.7 | 2.2 | 0.16% |
| Eurostoxx Index | 2246.3 | 4.4 | 0.20% |
| Oil (WTI) | 84.94 | 1.0 | 1.23% |
| LIBOR | 0.456 | -0.002 | -0.33% |
| US Dollar Index (DXY) | 83.24 | -0.161 | -0.19% |
| 10 Year Govt Bond Yield | 1.51% | 0.01% | |
| RPX Composite Real Estate Index | 183.7 | 0.1 |
Markets are rebounding after yesterday’s bloodbath. Market participants await the minutes of the FOMC meeting later this afternoon and will look for more granularity regarding the economic outlook for 2H and the possibility for further quantitative easing. Bonds are down 1/4 point while MBS are flat.
On the way into work, Bloomberg had a depressing interview with TCW strategist Komal Sri-Kumar. He is predicting a recession in 2H, driven by Europe, political uncertainty over the election, and fears of taxmageddon. His forecast is a 15% to 20% drop in the S&P 500 and a 10-year bond yield of 1.25%.
Earnings season has started out as a mixed bag. Alcoa beat estimates, while Applied Materials, Advanced Micro and Cummins missed. Later this week we have some financials with JPM, Wells, and Citi reporting. The season gets into full gear next week.
CNBC points out that the overall increase in house prices has been driven by dynamics in the distressed market that make the growth somewhat artificial. The demand has been coming from the most fickle of investors – pros and the first time homebuyer – and one characteristic of these transactions is they are one-sided – investors and first time homebuyers aren’t selling one home to buy another, they are just buying. This effect, along with the fact that the banks are dragging their feet releasing inventory into the market, is driving price increases at the low end which is masking weakness in the non-distressed end. FWIW, I believe housing is fundamentally cheap and pent-up demand is building, however housing cycles are very long and markets can remain fundamentally cheap or expensive for a very long time.
San Bernardino County (the ones taking an expansive view of eminent domain) has filed for BK.
Filed under: Morning Report |
All Things in Moderation 
Brent:
I think it is the city of San Bernardino that is filing for bankruptcy, joining Mammoth Lakes and Stockton. I don’t think they’ll be the last either.
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Swaps get defined.
“A definition of swaps required by the Dodd-Frank Act and approved by U.S. regulators will bring government scrutiny to a $648 trillion global market that has been largely unchecked since it emerged three decades ago.
The U.S. Commodity Futures Trading Commission and Securities Exchange Commission, the agencies charged with overhauling financial regulation following the 2008 credit crisis, laid out for the first time when interest-rate, credit, commodity and other derivatives will be considered swaps. The designation approved yesterday activates rules to increase collateral requirements and bolster public trading of the products by companies such as JPMorgan Chase & Co. (JPM) (JPM), Goldman Sachs Group Inc. (GS) (GS) and Cargill Inc.”
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O/T, but please bear with me as I brag a bit. Another NIH grant I work closely with but that is coming to an end soon got some great local publicity. This is the second NIH-funded grant I work with in my department that is researching assisted mobility for infants or young children with disabilities and how mobility improvement at that age increases cognitive and other functions. See mobility study.
Somebody please tell me again why we should not be funding more research and why us government workers are freeloaders.
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I thought overseas investments were bad and proved you were Out. Of. Touch?
http://hotair.com/archives/2012/07/11/pelosi-made-up-to-5-million-by-offshoring/
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Mitch McConnell is truly an artist:
“Democrats block Senate vote on Obama tax plan
By ALAN FRAM, Associated Press – 1 hour ago
WASHINGTON (AP) — Democrats blocked a Senate vote Wednesday on President Barack Obama’s plan to extend expiring tax cuts for a year for everyone but the highest-earning Americans, as the two parties maneuvered to try embarrassing each other on one of the election year’s foremost issues.
The move came just two days after Obama urged Congress to vote on his proposal. Democrats plan to take up the president’s proposal before Congress’ August recess.”
http://www.google.com/hostednews/ap/article/ALeqM5hQSmqG0afZPbUWN-zJpzVqT8DZvw?docId=c800104615d4449da1d34189b3f820a4
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Okie – Congrats on the success of your project and the grant.
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File this under reported savings in the ACA may appear larger than they actually are.
“Study: Medicaid patients aren’t using the emergency department for routine care
Posted by Sarah Kliff on July 11, 2012 at 2:11 pm
Policymakers frequently point to Medicaid patients high use of the emergency room for routine care as one factor driving up health-care costs.
There’s just one problem with that claim: A new study finds it’s not true.
The majority of Medicaid visits to the emergency room are for urgent or serious issues, according to research published Wednesday by the Center for Studying Health System Change.
Both those covered by Medicaid and those on private insurance use the emergency department at the same rate for both emergency and non-urgent care.”
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/11/study-medicaid-patients-arent-using-the-emergency-department-for-routine-care/
The ACA is not going to reduce the Federal budget deficit. It costs more to cover more people.
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Ol’ Mitch scares me, I will admit that much. How we ended up with Harry Reid as the Majority Leader has had me scratching my head for the last few years. . . and why he’s still in that position when he’s been consistently out-maneuvered by Mitch is beyond me.
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Somebody please tell me again why we should not be funding more research and why us government workers are freeloaders.
I think the argument is that (a) we fund as much research (and much else) as we can afford and that (b) not all such research has to be funded on the tax payer dime, and much of it might get funded through other means (private or corporate philanthropy, fund raising, etc) if tax payer money weren’t funding such research.
The reality is (and will likely remain) that we do and continue to fund such research. Folks trying to reign in spending may argue against funding, or funding increases, or advocate cutting funding, but that doesn’t necessarily mean it will happen, and such people serve as a check (if an insufficient one) on waste and fraud and misallocation of scarce resources. There a million things that, in the abstract, merit subsidy and funding, but limited time and resources, and opposition and critics (perhaps even the absolutist, wild-eyed ones) serve an important role in determining the allocation of those resources.
Working in county government myself, I certainly wouldn’t argue that government workers are freeloaders (generally, the freeloaders are regarded as those receiving entitlements and contributing very little to the economic pie from which they partake, though there are certainly those who see every government job as superfluous).
If a thing is worthy of doing (and certainly the mobility research must be), then a strong counter-argument can be made to critics, and funding secured. As was apparently the case. As regards to the need for more funding: everyone at every level needs more funding. 😉
Our school system needs more funding. Most research could use more funding. The entire government, if one judges by our debt, needs more funding.
Valuable resources will always be scarce (that is, not infinite), so there is always going to be competition for them, and sometimes things we consider more worthy will lose out to things that we consider less worthy. It’s an imperfect system, but as one for allocation of scarce resources, it seems to work well enough that some important research is done, and some valuable progress is made each year, every year.
Congrats on your success as well!
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Question: Who has ever gone to the emergency room, and believes that significant number of people would choose the emergency room for routine care?
The emergency room is not a place to go for routine care.
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George:
Our overseas investment in GM and Chrysler has yet to live up to expectations. Perhaps not enough money was sent?
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Mich:
Reid got the job because he was the youngest Dem available!
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“Somebody please tell me again why we should not be funding more research and why us government workers are freeloaders.”
I would venture to say that nobody has an issue with government funding basic research. It would be very difficult (and expensive) to find private funding for basic research, so it makes perfect sense for the government to step in and fill that void.
I think the objection comes in more when the government attempts to pick commercial winners and losers, whether we are talking about a Japanese-esque government industrial policy (a la MITI) or government subsidies (a la Solyndra). In these cases, there is a large an liquid market from which established companies can access capital. Plus, in most cases, the government favors the incumbents at the expense of the emerging.
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michi — Reid started locking down votes for minority leader as soon as he became whip. he was big in getting jeffords to bolt the gop.
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So now that we know for sure that Romney, Pelosi, Wasserman-Schultz, Buffett, Cao, and even Obama on behalf of taxpayers, and every American that owns a big-screen tv or an “I-anything” have invested overseas, how soon can we get this hanging of Romney started because we are clearly wasting too much time.
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“okiegirl, on July 11, 2012 at 11:22 am said:
…
Somebody please tell me again why we should not be funding more research and why us government workers are freeloaders.”
At 1% of the Federal budget, NIH isn’t the problem. Entitlement spending is.
http://www.thirdway.org/taxreceipt
I’m fine with shifting more existing government spending to NIH, provided something else is cut in an equal amount to off set it.
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No, it’s the people who don’t buy health insurance because they’re healthy that are freeloaders. Not sure why everyone has trouble with this.
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“No, it’s the people who don’t buy health insurance because they’re healthy that are freeloaders. Not sure why everyone has trouble with this.”
And they must be made to pay. Sweet Jeebus, should they pay!
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I paid $350 to the NIH last year. Go get ’em okie!
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Nova: so now we know that there are at least four of us on this blog (me, okie, Mike and FairlingtonBlade) who make our livings off of the(federal) government trough. How much would it cost us to hire you?
🙂
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P.S. WOOHOOO, okie!!!
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Does the government even have any interest in non-PhDs that aren’t already working for the govt?
When I was unemployed, I applied to all sorts of govt jobs for financial economists, etc. Gulf War vet, MBA, CFA and 15 years on the Street and I was ignored.
I figured the govt only wanted academics and career civil servants. Which IMO is part of their problem economically. The unintended consequences of their policies make me think they just aren’t getting advice from the right people.
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When I was unemployed, I applied to all sorts of govt jobs for financial economists, etc. Gulf War vet, MBA, CFA and 15 years on the Street and I was ignored.
As inviting of a wisecrack as that comment is, I do recognize how seriously skewed that hiring pattern must be. Seems almost impossible.
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Today’s PL highlight at 4:56 PM EDT, wherein Bernie becomes a libertarian.
http://www.washingtonpost.com/blogs/plum-line/post/republicans-vote-to-repeal-medicare-cuts-they-voted-for-and-are-campaigning-against/2012/07/11/gJQAIh0edW_blog.html#comments
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Brent:
Does the government even have any interest in non-PhDs that aren’t already working for the govt?
Interesting question; I don’t know. I do know that the academic requirements for getting funding are often ridiculous (i.e., they require a Ph.D. when an M.S. or even B.S. would do). I suspect that this is a throwback to the ’40s and ’50s when getting a Ph.D. was more rare than it is now, so it was the sign of somebody who already had significant experience and knowledge in a given field. Nowadays kids are learning in high school genetics and molecular biology that I didn’t learn until years after I’d graduated.
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Bill Gross makes sense, needs to be stopped:
“Unemployment Will Be Higher in a Year: Pimco’s Gross”
http://www.cnbc.com/id/48148693
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With regards to government funding basic research, there was an interesting article in this week’s Post.
http://www.washingtonpost.com/national/health-science/us-pushes-for-more-scientists-but-the-jobs-arent-there/2012/07/07/gJQAZJpQUW_story.html
There is much interest in funding a solution to a problem that has been discovered NOW. There’s much less interest in putting money into something that could solve a problem that comes up in ten years. I was just moved from doing 6-1 research to 6-2/3 research for just such reasons.
BB
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FB:
What’s 6-1 and 6-2/3 research?
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In these cases, there is a large an liquid market from which established companies can access capital.
If there is a plausible argument that the company can be successful and turn a profit. Thus why companies like Solyndra have to depend on the government, because, clearly, they likelihood of their failure was high, given that, despite the huge amount of money received, they failed so quickly.
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who make our livings off of the(federal) government trough.
Hey, I work for a county government. What am I, chopped liver?
When we’re all working for the government, though, who are we going to tax? 😉
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No, it’s the people who don’t buy health insurance because they’re healthy that are freeloaders. Not sure why everyone has trouble with this.
When individuals making rational economic decisions based on their circumstances are freeloaders, I think that bodes ill. 😉
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Kev:
Of course you aren’t chopped liver! As I’ve said before (I think to Scott), you’re a fine paté. 🙂 I specified federal government because I think we need a lobbyist to get the four of us some funding, and since NoVA’s right there in town. . .
Do county governments get lobbied??
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Do county governments get lobbied??
Not as such. Can’t squeeze blood from a stone. City councils and various county boards get lobbied when budgets are being drawn up, but, no, it’s not the same, and the money is always tight (unless you’re good friends with a council member).
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no, but counties and municipalities hire lobbyists to lobby the feds.
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So, NoVA–how much would it cost us to hire you as a lobbyist to get some of those research $$$? 🙂
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you really don’t want to know.
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Michi:
Considering that FASEB pays all of ~$100K per year on lobbying efforts, nova is way out of our league.
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