Morning Report 9/28/12

Vital Statistics:

Last Change Percent
S&P Futures 1433.2 -7.9 -0.55%
Eurostoxx Index 2470.5 -35.6 -1.42%
Oil (WTI) 91.65 -0.2 -0.22%
LIBOR 0.359 -0.002 -0.49%
US Dollar Index (DXY) 79.56 0.009 0.01%
10 Year Govt Bond Yield 1.61% -0.05%
RPX Composite Real Estate Index 194.5 0.0

Markets are weaker on no real news.  Personal Income came in weaker than expected and personal spending was in line with estimates. The .5% increase in spending was driven by a .4% increase in prices. Bonds are up about half a point and MBS are up 1/4.

On the back of the puzzling statistic showing a 17% increase in new home prices, BLS is now saying an additional 453k jobs were added in 2011, bringing the hiring estimate up from 1.9 million to 2.3 million. Is the obama administration playing jiggery-pokery with the economic data?  Well, that is one way to fix the economy.

Amidst all of the usual theories about the cause of the financial crisis (Glass-Steagall, nefarious bankers, Fannie and Fred) we have another – flaws in democracy itself.  He does sound a bit like Thomas (Flathead) Friedman in that he envies more authoritarian societies that are able to push through policies without much opposition.

Is QEIII going to do much for the real estate market? According to Thomas Flexner, global head of real estate at Citi, it won’t “do very much at all.”  Blame tight lending standards. Also, as g-fees increase that will offset part of the lower interest rate effect.

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