Morning Report 9/10/12

Posted on September 10, 2012 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1435.6 -2.6 -0.18%
Eurostoxx Index 2528.4 -10.2 -0.40%
Oil (WTI) 96.16 -0.3 -0.27%
LIBOR 0.404 -0.004 -0.86%
US Dollar Index (DXY) 80.35 0.100 0.12%
10 Year Govt Bond Yield 1.68% 0.01%  
RPX Composite Real Estate Index 192.9 0.0  

Markets are down slightly on no some disappointing economic data out of China. Treasury plans to sell $18 billion worth of shares in AIG. Bonds are down 1/2 a point, while MBS are flat.

In spite of the disappointing Chinese data, the Street is heavily long commodities. Chart:  GSCI Index:

 

Italian Prime Minister Mario Monti told CNBC over the weekend that he does not expect Italy to participate in the ECB’s bond buying program, at least initially.  Remember, the individual states have to request the ECB to purchase their debt. 

JP Morgan is out this morning with a note saying they expect the FOMC to extend the low rate guidance through 2015, and initiate a small asset purchase program (maybe $300b) primarily focused on MBS. The FOMC decision is scheduled to be released Thursday at 12:30 est.

The NAR is reporting that housing affordability continues to increase in spite of the fact that prices are up 9.4% YOY.  Decreasing mortgage rates are able to offset the price increases. 

SIFMA and others have provided a formal response to FHFA regarding the Eminent Domain issue in San Bernardino.  They provide a helpful table lining out the trade and who makes / loses money. Basically the winners are the hedge fund behind this and the borrower.  The table doesn’t break out what the state gets, but presumably they will get something out of this as well.  The lender gets slammed.

 

 

 

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3 Responses

  1. jnc4p's avatar
    jnc4p, on September 10, 2012 at 7:41 am said:

    It will be interesting to see how this plays out:

    “Chicago teachers to strike for first time in 25 years after talks with school district fail

    By Associated Press, Published: September 9 | Updated: Monday, September 10, 1:47 AM

    CHICAGO — Chicago teachers went on strike Monday for the first time in 25 years after their union and district officials failed to reach a contract agreement despite intense weekend negotiations that the union said were productive but still failed to adequately address issues such as job security and teacher evaluations.

    The two sides were not far apart on compensation, but were on other issues, including health benefits — teachers want to keep what they have now — and a new teacher evaluation system based partly on students’ standardized test scores, Chicago Teachers Union President Karen Lewis said.”

    http://www.washingtonpost.com/business/chicago-teachers-and-school-district-officials-halt-strike-talks/2012/09/09/f73a4364-faf2-11e1-a65a-d6e62f9f2a5a_story.html?hpid=z1

    My own take is that there is no greater gift for Republican governors like Scott Walker than news footage of Democratic elected officials denouncing public employee unions as intransigent and unreasonable.

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  2. jnc4p's avatar
    jnc4p, on September 10, 2012 at 9:25 am said:

    Worth noting:

    “Lord Camden on NSA Surveillance
    September 5th, 2012 ·”

    http://www.juliansanchez.com/2012/09/05/lord-camden-on-nsa-surveillance/

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  3. markinaustin's avatar
    markinaustin, on September 10, 2012 at 9:49 am said:

    That loan arrangement is too sweet for the new investors, I think.

    I have watched WJC and BHO speak through the miracle of my ‘puter to the DNC.

    I could explain at length, but I want to register here that I think BHO’s speech amounted to 38 wasted bullets.

    WJC had set him up for much more. He did nothing with the opportunity.

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