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.

58 Responses

  1. I don’t think the administration skewed the BLS numbers, however I wouldn’t be surprised if they may have conspired with Ben to delay the announcement until after the Fed meeting, as they undermine the case for QE3.

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  2. Obama made a big mistake on Afghanistan but he has a Teflon coating for various reasons, (a lot of them named Romney) and so it won’t make any difference.

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  3. I don’t think the administration skewed the BLS numbers

    After reporting that new home prices are up 17% a couple of days ago, I am starting to get suspicious. I certainly wouldn’t put it past him.

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  4. I think the Democratic Party is operating under a false dawn theory of the election. Much of what I have read by Dionne and others suggests that the expectation is for the GOP to be more amenable to legislation after the election. I would guess that the opposite is true.

    As we are already seeing, the lead story in GOP circles is that it’s the candidate who is at fault, not the policies. So I would guess that you will see a Republican Party that is even more dug in after the election on the theory that Romney was not conservative enough.

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  5. “so it won’t make any difference.”

    shame on us.

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  6. brent

    why is it that home prices in particular would arouse your suspicions?

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  7. nova

    Shame on Romney, a bad candidate.

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    • banned:

      Shame on Romney, a bad candidate.

      No. The electorate gets the candidates, and presidents, it deserves. The electorate is to blame for the Obama debacle of 2009-2012, and will be to blame for whatever happens from 2013-16. If you vote for Obama again, then own it. Don’t blame Romney.

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  8. why is it that home prices in particular would arouse your suspicions?

    Everything.

    First, the home builders (KB Homes, Lennar, and Toll Brothers) are reporting mid / low single digit price increases in their earnings releases. Case-Schiller and Radar Logic are showing minimal price increases for existing houses.

    If prices were increasing 17%, we wouldn’t have housing starts at half the historical average.

    It can’t be cost driven – lumber is flat YOY and wages aren’t increasing.

    Nothing about that number makes any sense to me.

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  9. brent

    thanks

    scott

    I think Bob Corker or Jud Gregg would be giving Obama fits by now I think even Romney, had he just still been the Romney of Masschusetts would be in better shape, but he lacks the charisma and quick thinking to explain away all the different stances he has taken in the last 6 years.

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  10. Well this is fun.

    It took me a minute to get that. Perhaps after he loses, Gary can endorse that series of beach tee shirts.

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  11. yello:

    It took me a minute to get that.

    I had to click on your link to get it. Guess it just goes to show how pure-as-the-driven-snow my mind is!

    (*snerk*)

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  12. michi — you’re former military? totally OT — is there any way that you can be retired after 6 years active duty. not medically retired. my understanding is that you need 20 years. i’m working a pro bono case.

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  13. NoVa–

    Not as far as I know, other than (as you said) medical. I got out with 8 and it wasn’t retiring; 6 sounds like merely fulfilling the basic Active Duty obligation.

    Rules may have changed if this is a post-9/11 service, though. I’ll e-mail a friend of mine who’s still in and see if he knows.

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  14. is there any way that you can be retired after 6 years active duty.

    Reserves

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  15. thanks, but please don’t do to any trouble — this guy has been out of USAF since 1983.
    brent, how do you mean?

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  16. meaning he could have spent 6 years on active duty, and 14 years in the reserves, and he would be eligible for some kind of retirement,

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  17. gotcha. that makes sense, but isn’t applicable for me.
    thanks

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  18. Hey, NoVA–

    No problem. Neither one of us can find anything less than 14 1/2 years.

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  19. Thanks for looking!

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  20. Be careful what you wish for:

    “The Drones Are Coming…And Americans Are Scared”

    http://www.cnbc.com/id/49212482

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  21. “Is the obama administration playing jiggery-pokery with the economic data? Well, that is one way to fix the economy.”

    Sounds like a heads I win, tails you lose argument. Weak jobs numbers are accurately reported,* but a good number is evidence of potential fraud. The jobs numbers from spring through summer were mediocre at best.

    *edit: Or at least not reported with similar editorial snark in the past. It’s par for the course to complain about the numbers coming out of the administration of the opposing party. I suspect that any serious attempt to do so would be enormously difficult, particularly since us government drones are far from a monolithic block.

    BB

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  22. The Times of Israel categorizes Netanyahu’s speech at the UN yesterday:

    “Netanyahu’s cartoon bomb wasn’t meant for world leaders, and not even for ObamaPM is hoping to convince American voters Iran is an immediate threat. Perhaps that way, the president will get the message”

    http://www.timesofisrael.com/analysis-netanyahus-cartoon-bomb-gimmick-wasnt-meant-for-world-leaders-and-not-even-for-obama/

    One commenter on CNN noted that it looked like something out of a Boris and Natasha cartoon. The only thing missing was Rocky J. Squirrel.

    My own view is that it must have been that part of the American public that finds Fox News too sophisticated, and gets their information from the Cartoon Network.

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  23. Stupidly off topic but one of the sites I visit every day went through a big makeover by switching from blogger to wordpress and launched their 3.0 version yesterday. One of the additions to the new format is a pet page and John Aravosis asked readers to share their stories and pictures of pets. Our very own Penny Lane is featured today…..lol.

    http://pets.americablog.com/2012/09/pet-post-penny-lane.html

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  24. ♪ Penny Lane the barber shaves another customer ♪

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  25. lms,
    Very adorable dog and what a wonderful story. I hope internet fame doesn’t go to Penny’s head.

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  26. Thanks you guys………….she’s the best dog we’ve ever had and we’ve had a lot of them. Don’t worry though, I won’t start a pet parade at ATiM…………..hahahaha

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  27. “My own view is that it must have been that part of the American public that finds Fox News too sophisticated, and gets their information from the Cartoon Network.”

    Now that’s what I call tolerance.

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    • McWing:

      Now that’s what I call tolerance.

      And somewhat ironic to me, given the number of liberals I know who actually do get their information from Jon Stewart and The Daily Show.

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  28. george

    So at the UN of all places, you hold up a cartoon bomb and draw a red line with a magic marker and expect somehow THAT will be greeted with an “oh, now we understand” moment?

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    • banned:

      So at the UN of all places…

      What’s so special about the UN?

      and expect somehow THAT will be greeted with an “oh, now we understand” moment?

      I suspect that McWing’s comment was directed at the assumptions underlying your comments, not Netanyahu’s. But to answer your question, I’m guessing that Netanyahu knows that there is a large, anti-Israel contingent for which understanding is beyond reach. He wasn’t talking to them.

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  29. scott

    because the UN is populated almost exclusively with career diplomats who presumably were not impressed with a cartoon bomb and a red magic marker

    additionally, while some are of course anti-Israel permanently many if not the majority i suspect are anti-Netanyahu a different thing.

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    • banned:

      because the UN is populated almost exclusively with career diplomats who presumably were not impressed with a cartoon bomb and a red magic marker

      I think the UN is largely populated with career diplomats whose feelings about Netanyahu in general and his presentation in particular probably have almost nothing at all to do with the cartoon bomb and a red magic marker.

      Besides which, I think magic markers and cartoons are a particularly suitable presentation for the clowns that make up the UN.

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  30. The Obama adminstration decides that everyone and everything are expendable in an effort to cover up the intial lies about Libya:

    “In a Friday afternoon statement, the intelligence community sought to clarify why Obama administration officials gave incorrect and misleading information following the September 11th attack on the U.S. consulate in Benghazi, Libya.

    “As the Intelligence Community collects and analyzes more information related to the attack, our understanding of the event continues to evolve,” Director of Public Affairs for National Intelligence Shawn Turner said in a statement.

    “In the immediate aftermath, there was information that led us to assess that the attack began spontaneously following protests earlier that day at our embassy in Cairo. We provided that initial assessment to executive branch officials and members of Congress, who used that information to discuss the attack publicly and provide updates as they became available. Throughout our investigation we continued to emphasize that information gathered was preliminary and evolving,” Turner said.

    The Obama administration has come under heavy fire for initially blaming the violence in Benghazi on an anti-Islam film that also sparked riots in Egypt and other countries in the region. While Obama himself alluded to the attack as an “act of terror” in a Rose Garden statement shortly after the attacks, it took the administration nine days to acknowledge a connection to terrorism.

    And on September 16th, U.S. ambassador to the U.N. Susan Rice called the attack “spontaneous” rather than “premeditated” on ABCs “This Week.”

    The intelligence community formally retracted her words Friday, with the Director of National Intelligence saying that they now believe it was a “deliberate and organized terrorist attack.” The Daily Beast’s Eli Lake has also reported that intelligence officials inside the administration almost immediately suspected a connection to regional al-Qaeda affiliates and other groups.

    “As we learned more about the attack, we revised our initial assessment to reflect new information indicating that it was a deliberate and organized terrorist attack carried out by extremists,” Turner said.”

    http://www.politico.com/politico44/2012/09/intelligence-community-explains-false-benghazi-information-136967.html

    This is the terrible everything I do must be right because I do it side of Obama

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  31. James Clapper either an idiot (not too likely i would hope) or a man who is repeatedly being asked to make a fool of himself in public to protect his boss. Remember last year:

    “Clapper told the Senate Armed Services Committee that the rebels are “in for a tough row” against Gadhafi, who still commands warplanes, an air-defense network and loyal army brigades against the opposition forces. He cautioned that the situation is “very fluid,” but added, “I think, longer term, the regime will prevail.”

    “I do believe Gadhafi is in this for the long haul,” Clapper said. “I don’t think he has any intention, despite some of the press speculation to the contrary, of leaving. From all evidence that we have — which I’d be prepared to discuss in closed session — he appears ”

    and before that:

    “News of 12 terror-related arrests in Britain sped across the 24/7 cycle Monday. But the U.S. director of national intelligence, James R. Clapper Jr., somehow missed it.

    In an interview that aired Tuesday but was taped on Monday, ABC’s Diane Sawyer chatted with Clapper, Homeland Security chief Janet Napolitano, and John Brennan, the president’s assistant for homeland security and counterterrorism.

    She asked Clapper about the incident.

    “First of all, London,” Sawyer said. “How serious is it? Any implication that it was coming here? … Director Clapper?”

    Clapper was initially bewildered and Brennan jumped in to acknowledge the arrests.

    Sawyer said to Clapper she was “a little surprised” that he “didn’t know about London.”

    He replied “I’m sorry, I didn’t.”

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  32. So a couple of us have been discussing voter ID laws on a previous thread and what got me thinking about this issue again was a piece I read yesterday about an outfit in FL working for the RNC submitting bogus registration forms. Now I find out it’s even more widespread than originally thought and the guy was previously investigated for destroying Dem registration forms. I keep thinking back to the ACORN controversy……….lol

    TALLAHASSEE, Fla. (AP) — What first appeared to be an isolated problem in one Florida county has now spread statewide, with election officials in nine counties informing prosecutors or state election officials about questionable voter registration forms filled out on behalf of the Republican Party of Florida.

    State Republican officials already have fired the vendor it had hired to register voters, and took the additional step of filing an election fraud complaint against the company, Strategic Allied Consulting, with state officials. That complaint was handed over Friday to state law-enforcement authorities.

    Paul Lux, election supervisor for Okaloosa County, said questionable forms in the Florida Panhandle appear to have all come from Strategic’s effort based at the local Republican Party headquarters. He said his office has turned up dozens of suspect forms.

    Lux said there have been forms that listed dead people and were either incomplete or illegible. He met with local prosecutors on Friday, but added that his staff was still going through hundreds of forms dropped off by Strategic employees.

    Lux, who is a Republican, said he warned local party officials earlier this month when he first learned the company was paying people to register voters.

    “I told them ‘This is not going to end well,'” Lux said.

    http://news.yahoo.com/voter-registration-problems-widening-florida-154156242–election.html

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    • lms:

      an outfit in FL working for the RNC

      According to your link, they were working for the Republican Party of Florida, not the RNC.

      Like

  33. Scott:

    lms is right, they were working for the RNC.

    Election officials in six Florida counties are investigating what appears to be “hundreds” of cases of suspected voter fraud by a GOP consulting firm that has been paid nearly $3 million by the Republican National Committee to register Republican voters in five key battleground states, state officials tell NBC.

    This is another one I’ve been following for a couple of days to see how it develops. . . but since the Dems never paid ACORN I think this is worse.

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  34. Doesn’t this Florida fraud make a good example of the need for voter id?

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  35. Here’s more from the LATimes and apparently the same firm is working, or was working, in other states, all swing states.

    Florida elections officials said Friday that at least 10 counties have identified suspicious and possibly fraudulent voter registration forms turned in by a firm working for the Republican Party of Florida, which has filed an election fraud complaint with the state Division of Elections against its one-time consultant.

    The controversy in Florida — which began with possibly fraudulent forms that first cropped up in Palm Beach County — has engulfed the Republican National Committee, which admitted Thursday that it urged state parties in seven swing states to hire the firm, Strategic Allied Consulting.The RNC paid the company at least $3.1 million — routed through the state parties of Florida, Nevada, Colorado, North Carolina and Virginia — to register voters and run get-out-the-vote operations. Wisconsin and Ohio had not yet paid the firm for get-out-the-vote operations it was contracted to do.

    Strategic Allied is run by an Arizona-based man named Nathan Sproul, who has been dogged by charges in the past that his employees destroyed Democratic registrations. No charges were ever filed.

    But his reputation is such that when Sproul was tapped by the RNC to do field work this year, officials requested that he set up a new firm to avoid being publicly linked to the past allegations, Sproul told The Times. The firm was set up at a Virginia address, and Sproul does not show up on the corporate paperwork.

    http://www.latimes.com/news/politics/la-pn-voter-registration-florida-republicans-20120928,0,7654954.story

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  36. Doesn’t this Florida fraud make a good example of the need for voter id?

    McWing, like Mark said earlier if they want to do some sort of National ID that’s linked to National elections with enough time and money to implement it I have no problem, but selectively targeting voters of certain demographics in swing states just before a Presidential election is slightly, to be kind, suspicious.

    And what this proves to me is that just like with ACORN, the system works and voter fraud on any kind of large scale is stopped in it’s tracks.

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  37. Registration fraud is not voter fraud which is the argument you guys can use, but fair warning, we made the same argument during the ACORN brouhaha and it was rejected by the right. Good luck.

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  38. McWing:

    Doesn’t this Florida fraud make a good example of the need for voter id?

    No. This is registration fraud, which wouldn’t be stopped with an ID at the polls. All you’d have to do is show the same ID that you used to register (if you were asked to show one then).

    The ID laws are to stop people from being able to vote on election day, and have no effect on absentee ballots (which traditionally skew R).

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  39. Scott:

    they used taxpayer money instead

    In case you haven’t noticed, taxpayer money is bipartisan.

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    • Mich:

      In case you haven’t noticed, taxpayer money is bipartisan.

      Exactly. That’s precisely what makes it worse, not better.

      Like

  40. Should Florida be permitted to do anything to ensure that voters are who they say they are and legally able to vote? If so, what should they be permitted to do?

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  41. McWing:

    They should go back to the laws that were on the books in 2010. In-person voter fraud is non-existent.

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  42. Quit, McWing. You’re being facetious. I answered your question and you know it.

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  43. Good night y’all. I have a busy weekend so I’ll see ya on the other side of it. Enjoy your football. We’re still watching the Angels try to beat Oakland for the wild card spot………………not very likely but we’ll watch ’till the end.

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  44. A quick comment, before I get busy today, in relation to the FL voter registration snafu. I’ll give credit where credit is due but you can’t help but appreciate the irony.

    The ability of officials to track back registration applications to their source is an ironic twist to an election year that has been dominated by talk of voter fraud.

    Republicans in the Florida Legislature, inspired by successful Democratic registration drives by groups like ACORN that they likened to fraud, pushed through a controversial and sweeping elections law during the 2011 session.

    The law required third-party organizations to register with the state and created a database that would help track new registration forms back to the group that submitted them. The bill also limited the amount of days that can be used for early voting, required people who change their address at the polls to use provisional ballots and required third-party groups to turn in registration forms within 48 hours or face hefty fines.

    Republicans argued the bill was needed to reduce voter fraud, even though there was scant evidence of any in Florida.

    A host of lawsuits were filed in response to the new elections law, although most of the provisions have been upheld. One that didn’t stick: the 48-hour registration requirement.

    It’s because of the law that Florida supervisors of elections know instantly if a voter registration form was turned in by a third-party organization and, if so, which one.

    “Before that law, there would be no way to know where these voter registrations were coming from,” Cate said.

    http://www.miamiherald.com/2012/09/28/3024723_p2/gop-firm-fired-for-flawed-voter.html#storylink=cpy

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  45. And one more from a partisan lefty (not me, the author) on the electoral prospects in the Senate. I’m not counting chickens but it’s definitely not what we expected earlier this year.

    If you can believe the Democrats’ internal polls, Heidi Hetkamp is on pace to retain Sen. Kent Conrad’s North Dakota seat. There are a lot of close Senate races this year, but it looks like the Democrats are ahead in Massachusetts, Connecticut, Virginia, Pennsylvania, Ohio, Indiana, Michigan, Wisconsin, Missouri, North Dakota, and Nevada, and Angus King has the advantage in Maine. The Arizona race is too close to call. Other than Pennsylvania, none of these races are in the bag, but we could be looking at a really strong result on election day.

    Currently, the Dems have 53 senators caucusing with them. If things stand as they are, the Dems would lose their seat in Nebraska, but pick up seats in Maine, Massachusetts, Indiana, and Nevada. That would be a three-seat pick up. Winning Arizona would make it a four-seat pick up. The Dems could wind up with 56 or 57 seats. Add in that Joe Lieberman will be replaced by an actual Democrat, and the shift is even better.

    Women would have something to celebrate, too. We could add the following women to the Senate:

    Deb Fischer (R-NE)
    Elizabeth Warren (D-MA)
    Tammy Baldwin (D-WI)
    Heidi Heitkamp (D-ND)
    Shelley Berkley (D-NV)
    Mazie Hirono (D-HI)

    Of course, the Senate is losing Olympia Snowe and Kay Bailey Hutchison, both of whom will be replaced by men. By that’s still a potential net addition of four women to the upper body. That three of them are strong progressives is a big plus, too.

    I should have added that Jon Tester of Montana is in a real fight and could easily lose. That would be a shame because he’s a good fit for his state and has represented them well. Adding him into the mix makes it a little less likely that the Dems can get to 57 seats.

    The last race to keep an eye on is Nebraska. I don’t think Bob Kerrey can pull it off, but it’s not impossible. I hear he had a good debate, for what it’s worth.

    In any case, the assumption has been that the Dems would lose control of the Senate. That is still a real possibility. But it’s actually looking more likely right now that the Dems will add a seat or two or four.

    That’s a testimony to the compelling nature of Mitt Romney’s campaign themes.

    http://www.boomantribune.com/story/2012/9/28/185033/921

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  46. Speaking of Senate races, looks like there still might be hope for Todd Akin, which supports Scott’s view of the voters rather than mine. We’ll see.

    The problem for Akin is that in the shock following his legitimate rape comments, many voters in the more moderate, Republican-leaning areas were repulsed, leading to his precipitous drop in the polls.

    But Connor and others said many voters have gotten over that initial shock. Rather than focus on the absurdity of Akin’s statement, they’ve turned back toward the traditional positions of anti-abortion versus pro-abortion rights, as well as remembering how little they like McCaskill or President Barack Obama.

    “At the end of the day, nobody who supported Congressman Akin is going to say ‘Oh Jeez, what a jerk.’ They’re so divergent on such a plethora of issues,” Connor said. “It really has moved back into the right-to-life discussion, and there’s not a lot of gray area there.”

    “If you run well enough Outstate [in rural Missouri] and don’t get shattered in the city and suburbs, you can win,” said Rupp.

    Still, Akin is damaged, and needs to deflect attention from his self-inflicted wound.

    “He basically has to remind everybody that he’s the Republican alternative to Claire McCaskill, and he has to try to shift the focus onto her, rather than him,” said University of Missouri political scientist Peverill Squire, who said he thinks McCaskill has the inside track. “The problem for him right now is it’s not clear he’s going to have the financial resources to do that.” Akin is running on a shoestring, and can barely afford TV advertising, Squire said.

    “McCaskill was very smart, and saved all her money until 5:01 Tuesday afternoon,” Squire said. “She wasn’t going to do anything to push him out of the race, so she’s got a lot more stashed away right now and she’s already beginning the bombardment.”

    McCaskill had nearly $3.5 million in cash at the end of the last reporting period, compared with Akin’s $532,000, according to data maintained by the Center for Responsive Politics.

    http://www.huffingtonpost.com/2012/09/29/todd-akin-legitimate-rape_n_1924096.html

    Have a great weekend all!

    Like

  47. Scott:

    Exactly. That’s precisely what makes it worse, not better

    Only if you think that working to register all voters, advocating for safe neighborhoods and affordable housing is a bad thing. Oh, right, those people are part of that 47% that will never take responsibility for their lives.

    Like

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