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 | 1437.0 | -2.5 | -0.17% |
| Eurostoxx Index | 2546.8 | -18.0 | -0.70% |
| Oil (WTI) | 97.32 | 0.3 | 0.32% |
| LIBOR | 0.389 | -0.006 | -1.40% |
| US Dollar Index (DXY) | 79.67 | -0.071 | -0.09% |
| 10 Year Govt Bond Yield | 1.73% | -0.02% | |
| RPX Composite Real Estate Index | 193.4 | 0.3 |
Markets are lower this morning after initial jobless claims ticked up to 382k and the Producer Price Index showed inflation in check. All eyes turn to the FOMC decision scheduled for 12:30 est. Here is the summary of what to look for. Bonds and MBS are both stronger.
Fannie Mae’s latest issue of Housing Insights does a deep dive into the latest employment statistics. While average weekly earnings have rebounded from the recession, aggregate weekly earnings have not. What did Keynes say about “sticky wages?” What this means is that wages have recovered for the people that have jobs, but is you add up everyone’s salaries, that number has not. Which pretty much tells us what we already know – wages are flattish and unemployment is high. They blame the construction sector for the weakness. As I have said before, we have under-built housing for the past 10 years. Tight credit and temporarily depressed housing formation has masked the effect on housing demand. That won’t last forever.
Census points out that median income fell 1.5% in the last two years. Interestingly 2010 was the peak of average or median wages and they have been falling ever since. The two reports do disagree somewhat – Fannie has average wages up about 2% since the recession began, while census shows them 8.1% lower. Both adjust for inflation, and I cannot imagine the difference between median and average would be that great, so I am not sure what is going on there. Census also notes the income gap is widening, so expect the study to be political fodder.
Rob Chrisman dissects the recent G-fee increase and its effect on the mortgage market. RTWT.
Is the rental boom reaching the end of the line? Maybe in Manhattan.
Filed under: Morning Report |
All Things in Moderation 
Rental boom should continue in TX cities:
http://www.statesman.com/news/texas-politics/state-tax-collections-soar-setting-up-chance-for-2456805.html?printArticle=y
Growth continues here with the influx of people from all over. That the state has gone from fiscal crisis to surplus is a big plus. The folks who come here looking for work and finding it are more often renters, first.
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What did Keynes say about “sticky wages?”
Wages are definitely far less sticky than they used to be. Just ask any former steelworker now working as a Walmart greeter.
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Housing still sucks here in Tampa:
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“yellojkt, on September 13, 2012 at 8:59 am said:
What did Keynes say about “sticky wages?”
Wages are definitely far less sticky than they used to be. Just ask any former steelworker now working as a Walmart greeter.”
My observation is that companies will prefer lay off staff and redistribute work to the remaining people rather than do across the board pay reductions for everyone. Among other things, salary costs are a lower percentage of the total cost of the employee than they used to be given the cost of their health insurance plans, so there’s a greater overall cost savings from layoffs versus trying to get the same reduction from salary adjustments.
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Time to place your bets.
I’m going with low interest rates until at least 2014 (or even 2015) and instead of bond buying, charging the banks for their excess reserves.
Anybody else want to wager their first born on the Fed?
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“Time to Bail Out on Treasurys?”
http://www.cnbc.com/id/48894332
We’ll know in about 45 minutes or so
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“The California Man Behind the Anti-Islam Film”
http://www.cnbc.com/id/49016321
Looks like in a few days, they’re be burning down Copt neighborhoods as this information works it’s way to Egypt.
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I thought everybody was expecting more QE and low interest rates through 2014 and rainbows?
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Nobody?
This is it folks. Other than FP blowups, this is the election right here. Not that the Fed is going to make Obama win or lose, but this is the last potential game changer in the election going forward.
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should have said “economic game changer”
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The excess reserves change could be a big signal that the Fed will do whatever it takes. I am expecting more of the same. – Op Twist, QE, extension of ZIRP.
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Lots of gold puts being bought today, indicating that investors aren’t expecting a big show.
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2015 and bond buying 40 billlion a month
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Meh
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all MBS, no termination date
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I wonder how classic liquidity preference will play out. For me, it is obvious that Rosanne and I will have to buy rental property as bonds mature. Forcing pension investors into riskier stocks [DJ had a term of art for this the other day] seems like another result. What else? I guess we could also buy in seller financed mortgages at a discount.
Addendum: Where will the insurers put their money?
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Stock market euphoria short lived. 10 year getting clocked…
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stall?
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“Pour Some Sugar On Me”
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Destiny’s Child, she’s not.
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Mark
High beta.
You can’t go wrong with rental real estate in a college town like Austin I would guess, unless you’re a softy who doesn’t get a big deposit.
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Big pick up in foreclosures in August, that’s good for the housing market.
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The verdict is in, the market has spoken:
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Ezra on today’s Fed announcement:
“If you’re an investor or a business owner trying to decide what the market is going to look like next year, you just got a lot more optimistic.”
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/13/ben-bernanke-the-economys-tough-older-friend/
For myself, not so much.
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Won’t the equities market [tend to] respond positively because bonds won’t be paying [much]?
The CPAs are afraid that one of the proposed tax reforms is removing the tax exemption for munies. That would also [tend to] pump equities, would it not?
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Ezra doesn’t know a whole lot about being either.
However as discussed previously, if you held on to those assets sensitive to the Fed, you can eat at Olive Garden tonight instead of McDonalds.
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Sounds like whining to me.
Clearly they don’t know Nate’s work very well. Darn those facts and their liberal bias!
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“unable to grasp Romney’s message.”
Romney’s message consists of being the generic Republican alternative to Obama.
However, I expect that recent events will benefit President Obama given Romney’s knee jerk reaction to a news event. I suspect that the conclusion that independent voters will take away is that there are worse things than four more years of gridlock and slowly declining unemployment. As long as the economy doesn’t get any worse than it currently is, I expect that President Obama will be reelected.
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JNC, am I correct in having suggested that both you and I are votes lost to BHO for Johnson? I am not at all sure he will pull more potential WMR votes unless Ron Paul endorses him.
Without a Paul endorsement, I think Johnson’s vote in NM is more taken from BHO, and NM is not a sure thing for anyone.
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It’s almost as if the President “shoots first and aims later.
http://thecable.foreignpolicy.com/posts/2012/09/13/white_house_clarifies_obama_s_statement_that_egypt_is_not_an_ally
http://thecable.foreignpolicy.com/posts/2012/09/13/white_house_clarifies_obama_s_statement_that_egypt_is_not_an_ally
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Nate Silver has New Mexico as going to Obama with 96% certainty. Where Johnson and Goode could really hurt
ObamaRomney is in Virginia. They could be the Nader in Florida of this election.LikeLike
Yello:
Don’t you think they’re more likely to pull conservative votes than liberal ones?
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Clearly they don’t know Nate’s work very well. Darn those facts and their liberal bias!
Clearly, this advisor is not a baseball stathead either or s/he would know Nate’s not a journalist.
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“The CPAs are afraid that one of the proposed tax reforms is removing the tax exemption for munies.”
Never in a million years would that happen.
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“markinaustin, on September 13, 2012 at 1:04 pm said:
JNC, am I correct in having suggested that both you and I are votes lost to BHO for Johnson? “
Absent Johnson running, I would probably not vote for a candidate for President at all, however if you are referring to my vote in 2008 it was for Obama. Even had a yard sign.
If Ron Paul is going to endorse him, he should do so before the debates. The primary value of Johnson’s candidacy, besides advancing the long term project of building up the libertarian party as an actual viable entity, is to inject a different perspective into the Presidential debates.
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Agreed. Johnson must be in the debates or they will be talking points, only.
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Don’t you think they’re more likely to pull conservative votes than liberal ones?
Aaargh! I keep doing that. Of course they draw more from Romney. They will have their biggest draw in safe red states where a protest vote is fairly safe. It’s Ohio and Virginia where they will do the most damage to Mitt.
I always feel third party candidates over-poll before the election but I was way wrong about Perot.
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Clearly, this advisor is not a baseball stathead either
And even I knew that was how Nate got into the prediction business!
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george:
He was making the distinction that the current new Egyptian government has not committed to us, nor are they likely too, but I agree that he should be more careful.
Our allies and enemies are often dictators, not nations of people unfortunarely, so cue the next Middle Eastern strong man to emerge.
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“yellojkt, on September 13, 2012 at 1:23 pm said:
…
I always feel third party candidates over-poll before the election but I was way wrong about Perot.”
Imagine if Perot hadn’t dropped out first citing Republican conspiracies to sabotage his daughter’s wedding. Or if he was running this year for the first time.
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Johnson must be in the debates or they will be talking points, only.
No way Romney lets him get an invite. Doesn’t he have to poll over 5% nationally to qualify?
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They will have their biggest draw in safe red states where a protest vote is fairly safe.
Like UT. . .
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Banned,
Mmm hmm. No need for the clarification/walk back. Purely superfluous.
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george:
Did I miss the time limit? I typed as fast as I could.
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“yellojkt, on September 13, 2012 at 1:28 pm said:
Johnson must be in the debates or they will be talking points, only.
No way Romney lets him get an invite. Doesn’t he have to poll over 5% nationally to qualify?”
Yes. The only scenario I see that happening, absent a major Super PAC backed ad campaign or Romney LSD meltdown is via a Ron Paul endorsement.
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McWing:
From your first link:
I’m not even an Egypt watcher, and I have to admit I was scratching my head over the wording of the President’s comment about Egypt not being an ally. Just goes to show that even The One isn’t perfect.
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Troll:
It’s almost as if the President “shoots first and aims later.
I think BHO was sending a signal, not putting his foot in his mouth like WMR did.
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Seemed a rebuff to Egypt for Egypt neither condemning the Cairo incident nor providing more security. Libya was very apologetic and promised more local help. Apparently there were NO MARINES in the temporary Libyan compound. Apparently this had been planned for 9-11 by the bad guys.
Apparently the Libyan cops did help a lot, and finally were able to clear the premises.
So HRC and BHO praise Libya and are silent about Egypt. I think JNC’s rule might work for Egypt, but we give Libya some rope.
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It was a Kinsley gaffe.
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Courtesy of Shrink on PL:
“Fiddling at the Fire
Nouriel Roubini
Sep. 13, 2012 ”
http://www.project-syndicate.org/commentary/fiddling-at-the-fire-by-nouriel-roubini
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I don’t think Goode or Johnson will have much of an impact. it’s NoVa — and to a lesser extent — norfolk turnout.
http://elections.nytimes.com/2008/results/states/president/virginia.html
check out Fairfax. Obama beat McCain by more than 100k votes. almost 50k in Arlington. The keys for GOP statewide wins it to not get crushed up north.
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I think BHO was sending a signal,
It was a Kinsley gaffe.
Perhaps a bit of both. I said yesterday that there must be some armtwisting going on with foreign aid to make the Egyptian military crack down on the mobs. This may have just been a smoke signal that went too public.
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How to idiot proof your finances
The investments I have for my daughters have consistently outperformed my own mainly because I only buy them real estate and commodities on the downturns and then forget about them the rest of the time.
You’d think that I would learn from this, but unfortunately there’s always those one or two stocks that look like great opportunities to me at any given time and then that I lose faith in on another day. If I only had internet one day a month, I tihnk I would be a rich as Harry Reid even without the government salary!
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*Cough* Facebook *Cough*
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jnc:
You and shrink are always the little rays of sunshine, aren’t you?!
In other words, maybe the Mayans were right, after all.
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not yet, be like Sean Connery in The Hunt For Red October, talk about vacations when the torpedo is closing on you.
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Are you thinking of this scene?
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Warning counter-narrative! May offend some!
http://bigstory.ap.org/article/fact-check-obama-doesnt-think-egypt-ally
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One minute Republicans are criticizing Obama for being too friendly, sympathetic and apologetic to Muslims. When he makes a comment saying saying a Muslim nation is not an ally they …. well I’m sure you can figure out what happens then.
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McWing, I think we addressed that up thread. . . or is there another point that I’m missing here?
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michi:
Yes I confused that with another scene where he was talking with Sam Neiil about Montana though.
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george
yes poorly said.
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poor sam neill. got shot before he could live the libertarian dream of moving to Montana with his RV and many wives.
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nova:
He was too far behind in guns anyway. It would’ve taken all his rubles to catch up.
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We should all be happy today. The debtors won a clear victory over the creditors. I’m guessing that we all are on the winning team for the most part.
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Don Juan/Nova:
One of my all-time favorite movies; I’ve lost track of how many times I’ve seen it.
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A short but very good read:
“Three Things Fed Did Today It’s Never Done Before”
http://www.cnbc.com/id/49022934
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Michi — my dad and I have running joke about “one ping only please.” it’s been going of for, (I just checked) 22 years. Ugh. I was 12 when we saw it in the theater.
Also, the “Personally, I’d give us one chance in three. More tea anyone?”
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“One minute Republicans are criticizing Obama for being too friendly, sympathetic and apologetic to Muslims. When he makes a comment saying saying a Muslim nation is not an ally they …. well I’m sure you can figure out what happens then.”
I'd like to figure out what's going to happen to the State Department person who said this: "Asked about Egypt's status, State Department spokeswoman Victoria Nuland confirmed Thursday that the administration still considers it a major non-NATO ally of the United States."
Anybody else curious what happens to her?
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You’re only 34? Wow that seems impossibly young.
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“”Ryan, be careful what you shoot at. Some things in here don’t react well to bullets.” Yeah, like me!”
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DJ:
From your link:
So how will they (that nebulous “they”) decide what the UE level should be to cease the LSAP? I think that the historical figure for “0” unemployment is 4%, but I seem to remember reading somewhere that that’s considered an unrealistic goal nowadays.
John Carney seems to be an excellent financial writer, btw.
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“novahockey, on September 13, 2012 at 2:27 pm said:
Michi — my dad and I have running joke about “one ping only please.” it’s been going of for, (I just checked) 22 years. Ugh. I was 12 when we saw it in the theater.
Also, the “Personally, I’d give us one chance in three. More tea anyone?””
Best is:
“Adm. Painter: What’s his plan?
Jack Ryan: His plan?
Adm. Painter: Russians don’t take a dump, son, without a plan.”
as delivered by Fred Thompson.
http://www.imdb.com/title/tt0099810/quotes?qt0458304
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I suppose this is appropriate given the Fed’s action:
“A great day comrades, we sail into history!”
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I suppose this is appropriate given the Fed’s action:
“A great day comrades, we sail into history!”
Or inappropriate because it was said (I think, I was only 11 when I saw it in a theater in Mt. Pleasant, Michigan) as a group of Russians were sailing towards a glorious, economically fruitful and free future and I’m guessing you think we’re headed in the opposite direction.
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“as a group of Russians were sailing towards a glorious, economically fruitful and free future and I’m guessing you think we’re headed in the opposite direction.”
For the officers anyway. They never had any intention of bringing along the
99%crewLikeLike
To juxtapose two topics:
“And the Fed will grant each trader new hope”
http://www.imdb.com/title/tt0099810/quotes?qt0458292
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also, who’s going to pull their DVD* off the shelf tonight? be honest.
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“novahockey, on September 13, 2012 at 2:50 pm said:
I suppose this is appropriate given the Fed’s action:
“A great day comrades, we sail into history!””
Or:
“This business will get out of control. It will get out of control and we’ll be lucky to live through it. ”
http://www.imdb.com/title/tt0099810/quotes?qt0458293
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“novahockey, on September 13, 2012 at 2:51 pm said:
also, who’s going to pull their DVD* off the shelf tonight? be honest.”
I have after work drinks scheduled followed by the hot tub, so not tonight.
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“The hard part of playing chicken is knowing when to flinch.”
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also, who’s going to pull their DVD* off the shelf tonight? be honest
Netflix, baby!!
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“You arrogant ass. You’ve killed *us*! “
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also, who’s going to pull their DVD* off the shelf tonight? be honest.
Bears-Packers tonight, with a side helping of USF-Rutgers …
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netflex and Plex. the way to go. expect it means i don’t have cable to watch bear-packers.
http://plexapp.com/
catch you all tomorrow
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Bears-Packers tonight, with a side helping of USF-Rutgers
How in the world could I have forgotten about Thursday night football (because all day long I’ve kept thinking it was Wednesday, that’s how!)? Thanks for the reminder, Mike
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NoVA:
In case you drop back in, check out wiziwig. They carry all of the pro games (and most of the college ones) and you can stream them. Just ignore the ads at the beginning of the stream telling you to download the player and you can close the ad after about 10 – 20 seconds.
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When the hell did Rutgers get a football team?
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yello:
When the hell did Rutgers get a football team?
Dunno. But it was long enough ago that the Buccaneers hired away their head coach.
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BTW, ashot, when do we get an updated avatar with ashot v2.0?
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Michi,
I actually tried to do change my phot the other day, but I couldn’t find a more recent photo on my work laptop which is odd because I have a great one as my background. So anyway…soon.
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WTF? Market looks a whole lot different this morning than it did yesterday afternoon.
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How does the market look different and why is oil pushing up toward $100 again?
edit: I assume mkt change is reaction to Fed, but hasn’t this action been previously assumed by the mkt?
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Yesterday on the fed announcement, 10yr bonds sold off, out to a yield of about 1.81%, but then spend the rest of the afternoon settling back in to where it started the day, around 1.72%. I come in this morning and it is up to 1.83% (now about 1.82%). Not sure why. Rumors of Chinese selling going on, but nothing for sure.
Plus swap spreads have tightened considerably. 10yr spreads down to 5.5 bps, the lowest we have seen since March. A lot of pressure on spreads from mortgages and insurers, trying to grab yield in the long end I guess.
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I believe that Rutgers played in the first college football game ever. So they have been around.
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Mark:
The saying goes that you can’t fight the Fed, and everyone believes it to a more or less degree.
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I should get a t-shirt made up that says
PROFESSIONAL INVESTOR
(If you see me running from Treasuries, try to keep up)
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