שנה טובה ומתוקה‎

A good and sweet year to you all.

Today is a happy celebration for me and my family. But it begins the ten days of penitence, in which I am to find the people I mistreated during the previous year and ask their forgiveness. I am to do this so that I can seek God’s forgiveness ten days from now on Yom Kippur, the Day of Atonement. If I have not honestly sought forgiveness from those I have injured first then it is thought my prayers for forgiveness to God will not be heard.

This exercise has been mirrored in the Twelve Steps of AA, btw.

Let me add that I have only once seriously pursued this outside my family and close friends in 69 years. It is difficult, and not so much for the reason one would anticipate, the discomfort in making the request. It is difficult because we never know whom we mistreated inadvertently unless they tell us, and then we clean it up at the time, as best we can. Further, it is difficult to recall whom we mistreated purposefully if the emotion that caused the outburst or action is long gone, or if we don’t think of what we did as “mistreatment” at all.

We only trade words here, so I do not recall mistreating any of you save one, and that was inadvertent. I offered my regret at the time. You are welcome to correct me on my faulty memory of mistreatment of others by email to me.

In the Jewish version, it is unnecessary that the the one I mistreated forgives me. It is, however, required that the request by me be sincere.

Morning Report 9/17/12

Vital Statistics:

  Last Change Percent
S&P Futures  1457.1 -1.9 -0.13%
Eurostoxx Index 2583.8 -10.7 -0.41%
Oil (WTI) 99.07 0.1 0.07%
LIBOR 0.381 -0.005 -1.17%
US Dollar Index (DXY) 78.91 0.063 0.08%
10 Year Govt Bond Yield 1.85% -0.01%  
RPX Composite Real Estate Index 193.6 -0.1  

Expect a quiet market today and tomorrow for the Jewish holidays. S&P futures are down a couple of points and bonds / MBS are up a few ticks. There is not much on the economic calendar this week.

The Empire State Manufacturing Survey showed manufacturing in the New York region contracted more than expected. Just more evidence that the economy is losing steam going into the election. The diffusion index is now at the lows of late 2010. FWIW, I am hearing initial forecasts for 3Q GDP growth coming in around 1%. Meanwhile, several business owners testified last week that regulatory uncertainty is driving a lot of the inaction.

Paul Krugman has yet another editorial ridiculing anyone who disagrees with ZIRP and QE.  Nobody attacks a strawman with more savagery than Dr. Cowbell, who imagines he is debating with someone who honestly fears Zimbabwean style inflation (yes, he actually did say that).  Right now, commodities are soaring along with the stock market.  Wages are flat to falling.  So, a combination of flat wages and increased food and energy prices equals lower disposable income. I suspect a lot of middle class people would prefer not to have this “help.”  Or seniors, for that matter, who receive meager interest income from Treasuries and high quality corporate bonds.

Rick Santelli (kind of the anti-Krugman) raises some good points about why QE might not end up influencing mortgage rates to the consumer.  Why?  Because we are raising the guarantee fee on conforming mortgages, and the banks will respond to the GSE’s round of put-backs by increasing borrowing costs. His view on ZIRP – the government needs to borrow a lot of money and needs interest rates as low as possible. He also notes that a lot of the floor traders have become mortgage bankers.

Investors in foreclosed properties now have a new source of funds – banks! Waypoint Real Estate Group got $65 million from Citi to buy foreclosed properties. Citi is also working on a way to issue securities backed by rental income streams. This is very good news for the housing market.

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