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 |
1368.0 |
8.2 |
0.60% |
|
Eurostoxx Index |
2461.2 |
33.8 |
1.39% |
|
Oil (WTI) |
88 |
1.1 |
1.24% |
|
LIBOR |
0.312 |
0.000 |
0.00% |
|
US Dollar Index (DXY) |
81.06 |
-0.193 |
-0.24% |
|
10 Year Govt Bond Yield |
1.61% |
0.03% |
|
|
RPX Composite Real Estate Index |
191.4 |
-0.4 |
|
Stocks are higher this morning on optimism the fiscal cliff can be averted. The new buzzword in Washington is “constructive” The pattern lately has been a strong opening, and then a late-day sell-off. This is a holiday-shortened week, so you can expect lower volumes and not much activity. We have a sparse economic calendar as well. Bonds and MBS are down.
Even if we reach a deal with the fiscal cliff, taxes are going up next year. Hurricane Sandy has been expected to lop a point or so off of 4Q GDP. Between the two, we are probably looking at a flat-to slight GDP growth in Q113. To add insult to injury, businesses are halting capital expenditures. While “constructive” is the operative word for Washington, “Uncertainty’ is the buzzword for business. While it is certainly possible that a deal in Washington will remove the uncertainty, it feels like the business will simply find something else to fret about. The stock market is telling you that as well. FWIW, Elmer Fudd is sanguine about the whole thing, saying a recession is a small price to pay to get our fiscal house in order.
HUD has announced some changes to help FHA get through its rough patch – the punch line is that FHA loans are about to get more expensive. Fun fact: FHA loans were about 2% of the market pre-boom. Now they are 40%. The biggest changes involving borrowers will be an increase in the insurance premium, and removing the insurance cancellation program.
Redwood sold another $300 million of high quality jumbos last week, their sixth this year. Two Harbors apparently is close to a securitization as well. In the past two years, Redwood has securitized $900 million of jumbo mortgages. To put that in perspective, in 2005 and 2006, private label issuance was $1.2 trillion. That said, the private label securitization market is coming back, slowly but surely.
Leave it to Paul Krugman to link Twinkies and marginal tax rates.
Filed under: Morning Report |
All Things in Moderation 
Odd. I’m glad you can post now. Wonder what happened …
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Krugman’s point is that in the 1950s we had broad-based economic growth and the income and wealth inequities were at historic lows. For a half-century we have been fed Randian philosophy which worships ‘wealth creators’ to the detriment of the broad American public. Not to go all Kenyan Marxist on everybody, but there is a case to be made for living wages, broad benefits packages, a strong social safety net and good pay for skilled jobs.
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The primary result of the marginal rates of the 1950’s was to classify everything as a business expense. If they were actually effective, then the GDP percentage of revenue would have been higher.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205
Regardless, France should prove an excellent case study in the effectiveness of increasing marginal income tax rates, along with other progressive proposals such as a wealth tax and a financial transaction tax.
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In the 1950s, we have no international competition. Once Europe and Japan rebuilt in the 1970s, the game was up.
Not only that, government was a lot smaller in the 1950s.
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Brent has it exactly. Let me add that when GM negotiated the huge CBA with UAW in the mid 50s everyone was happy. The potential that the ratcheting up of auto industry retirement benefits would become a disaster just was not on the horizon, pre-VW taking a chunk of the market in the early 60s. And I don’t think an Ike budget ever topped $85B. Really. [IIRC, that would be about a Trillion Dollars today; new cars cost between $1400 and $4000].
When PK argues for tax comparability to the fifties I think he self-demolishes his reputation as an economist.
That is not to say, YJ, that there are no legitimate arguments for counter-cyclicals and safety blankets and entitlements, and different tax structures that do not favor the wealthy. That is only to say that invoking the fifties to make those arguments is utter nonesense.
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I can’t remember if I posted this, but since people were posting their health care increases, I just got an email that my premiums went up 9.9%. My firm has about 250 employees so we tend to get killed on health care costs.
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Are y’all in the American Bar Association Endowment plan?
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Bingo. Discussing the tax structure of the 1950’s in isolation from the rest of the factors (see for example the defense spending of the 1950’s as a percentage of GDP) is misplaced. To attribute the economic growth rates of the 1950’s to marginal tax rates is truly absurd.
Looking forward to the high marginal tax rate GDP boom in France any second now.
As an aside on tax rates changing behavior, I saw the new Rolling Stones documentary last night “Crossfire Hurricane”. They of course are some of the most famous tax exiles and Mick Jagger was noting that the triggering event came for them when they came back from tour and were deeper in debt due to tax bills than when they left.
http://www.rollingstones.com/crossfire-hurricane/
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Krugman’s rebuttal to the “Europe in rubble” argument:
http://krugman.blogs.nytimes.com/2012/11/19/the-europe-in-rubble-excuse/
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Ross Douthat on the triumph of the welfare state as a symptom of national decline.
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JNC, Douthat is too young for social commentary.
The Dust Bowl followed by WW2 and the relocation of families after that, and the decline of the small towns; that is when America became most disjointed over the shortest period of time. Extended families have actually been doing a little better, and community spirit in suburban and urban neighborhoods has actually improved somewhat, in the past two decades, I think. Free long distance telephones, Skype, the internet in general, and other factors, have brought families into better reconnection. I grew up on a farm. Everything afterward felt like an uprooting. My sister and I were talking about it last night.
I think his view that those who win elections stupidly gloat is on the money.
I think that the extent of a welfare state is logically unrelated to the sense of community or of the patriotism of the citizenry. There are plenty of studies that show Finns are quite happy in their frigid little welfare state and are good community participants without much churching. I suspect that studies fairly done in dictatorships would show suspicion and community break down and unhappiness. Thinking one is a citizen with a say is better than thinking one is a puppet on a string. Beyond that, massive unemployment is bad for family, community and nation. There are surely generalities we can draw, but there are so many we cannot.
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frrom Douthat: “that Republicans are now Radio Shack to their Apple store, “The Waltons” to their “Modern Family,” a mediocre Norman Rockwell to their digital-age mosaic.
is it just me, or has Modern Family run it’s course? i’m finding it a lot of “meh” recently.
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They need to get the fake belly off of Sofia Vergara. That is not what people tune it to see. If you want catty humor surrounding gay stereotypes, The New Normal is the place to be.
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What real market power looks like:
“AC/DC Release Entire Catalog on iTunes After Long Holdout
Rockers relent and make music available through digital store”
http://www.rollingstone.com/music/news/ac-dc-put-albums-on-itunes-20121119
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maybe that’s what it is — the gay stereotypes. it’s just not funny (anymore). the most recent episode with Matthew broderick was just painful.
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The Matthew Broderick was a decent reversal of the Gay Panic trope in that Phil was both oblivious and unconcerned. The bigger meta jokes were that Nathan Lane, Broderick’s costar in The Producers, is a recurring character and that Matthew is a frequent victim of rumors that he is a closeted homosexual despite (or because of) his marriage to Sarah Jessica Parker.
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I think his overall point about the welfare state being a replacement for other institutions and families in general is accurate and one that he’s made before:
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You guys really have a thing for Julia. Get a room already.
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I think his overall point about the welfare state being a replacement for other institutions and families in general is accurate
That is a pure assumption. It is exactly equivalent to PK thinking tax rates of the fifties caused equality and a healthy middle class. It completely overlooks the urbanization of America, the spreading of extended families around the nation, the contribution of immigrant cultures and the ease of physical mobility in our nation. It completely misses the point, which is that “atomization” occurred completely independently of the rise of the welfare state. It also does not entertain that the nation is a bit less atomized now then it was in 1990, perhaps in part because of the first generation immigrants among us and in part because since then people have waited longer to get married and somewhat more marriages are founded on more personal experience and on more solid financial grounds. No person finds “friendship”, “community”, or “spirituality” from a government check, although many find survival, or an education, or the financial ability to keep a family together from one.
I read in the assumption the unspoken predicate that individuals form groups and communities merely for physical survival, so that if government at some level can provide physical survival communities will become unnecessary. That is an unusual view of a social animal, I think, and one that rings false for me.
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maybe that’s what bugged me about it — the gay trope thing.
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“It completely misses the point, which is that “atomization” occurred completely independently of the rise of the welfare state. ”
I didn’t say that the welfare state caused the atomization, but I agreed with Douthat’s take that the atomization increases it’s political appeal.
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I have no desire or need to support my parents in their dotage. Their combination of a military pension, a teacher retirement plan and two social security checks coupled with a lifetime of thriftiness that skipped my generation has given my parents more than adequate resources for the rest of their life, discounting the long-term nursing home risk.
They own two condos free and clear (my sister and her family live in one rent free) and they just got back from their two week Hawaii cruise. They were both the first of their families to go to college and except for my dad’s decade as an airline pilot have always drawn a government check. It was a nice run for our country while it lasted. People of my generation (late 40s) have already resigned ourselves to working forever.
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JNC I just saw your comment about PBGC at the PL. From what I have read, Hostess had been making its contribs to the Bakers pension plan, and what is in it now is protected in bkcy as trust funds. However, Hostess was seeking to borrow from the pension fund for the next two calendar years. So Bakers would not budge, thinking their pension plans would be GONE. However, I do not know the status of actual behind the scenes negotiations and whether Hostess ever signaled it would be willing to keep hands off the fund, or whether Bakers ever signaled anything at all.
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good news re: drones..
http://www.nbcphiladelphia.com/news/local/Flying-Camera-From-Animal-Rights-Group-Shot-Down-at-Pigeon-Shoot-Cops-179983451.html?
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Yeah, looks like some of the plans are being taken over by PGBC and some aren’t.
http://www.benefitspro.com/2012/11/16/pbgc-vows-to-protect-hostess-employees-pension-ben
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nova:
Thanks for the link! Dumbasses — what did they think was going on at a pigeon shoot?
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And is it trespassing if you hover over private property?
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Yep.
Unless you have a license to hover there from the owner or an invitation from the owner, hovering is trespassing.
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There may also be an FAA violation as well. Private drone use is uncharted territory.
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Whoa, just saw this on Volokh:
http://www.volokh.com/2012/11/18/local-government-forces-homeowners-to-cut-down-trees-so-that-retired-baseball-star-john-olerud-would-have-a-better-view-of-the-seattle-skyline-from-his-house/
WTF? I used to like John Olerud — he hit .363 one year with the Blue Jays, flirting with .400 until September.
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Mike:
That’s pretty crazy! Especially since the trees were there when the Oleruds bought their house.
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But they may have inconveniently continued to grow. trees do that.
Funny – in Austin you cannot cut down a tree for blood or money, on your own property, never mind get one cut down on someone else’s.
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Good piece on Wonkblog:
“American manufacturing is coming back. Manufacturing jobs aren’t.
Posted by Neil Irwin on November 19, 2012 at 10:28 am”
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/19/american-manufacturing-is-coming-back-manufacturing-jobs-arent/
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Talk about pretty much instantly becoming the most hated person on the block. . .
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maybe that’s what bugged me about it — the gay trope thing.
The gay trope thing was annoying last week as was the sheer absurdity of the situation that despite never occuring in real life repeatedly appears in movies and on TV. I have to wonder if there has ever been a situation where a heterosexual male inadvertently seduced a homosexual male. And that doesn’t even take into account all of the rest of the absurdity of that episode. There was a similar type scene in “I Love You Man.” The next step is bathroom humor.
I’m with Mark on the Douthat, too. He failed to support his points with anything much beyond self-serving assumptions. The only thing he’s right about is the need for Democrats to avoid sitting back and gloating. As I recall, there were plenty of people saying 2008 proved the Republican Party was dead. Their demise proved to be greatly exaggerated.
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“The next step is bathroom humor.”
This must be innate. My 3 year old has started with this. I swear i didn’t teach him. Daycare i suppose.
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The next step is bathroom humor
I’ve got to ask–do girls do this? Being a perfect child myself (and I’m sure that my memory of being a perfect child is flawless) I don’t remember going through this phase. . . but you dads of girls would know. I do remember being a teenage drama queen. . . and being the most dramatic and most royal ever! 🙂
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Kelley, my twin 3.8YO granddaughters have been into potty humor for a long time. It started with toots [farts] and has grown into using pee and poo as jokes and insults.
As in calling me “Old poopy face.”
Related: Julia will walk over and stand under a blowing ceiling fan to dissipate a fart she feels is coming on. Sometimes she announces.
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I think Eddie Murphy had a bit about this — basically, it was about how kids joke about what they know.
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So, at least usually, we grow out of it. Although the mental image of Julia is making me crack up!!
I’ll have to youtube the Eddie Murphy thing. . .
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