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 | 1477.5 | -1.4 | -0.09% |
| Eurostoxx Index | 2715.3 | -11.3 | -0.42% |
| Oil (WTI) | 95.48 | -0.1 | -0.08% |
| LIBOR | 0.302 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 79.92 | -0.116 | -0.14% |
| 10 Year Govt Bond Yield | 1.86% | 0.02% | |
| RPX Composite Real Estate Index | 192.8 | 1.0 |
Markets are flattish on no real news. Japan has announced a 2% inflation target, similar to what the Fed has been doing, in an attempt to weaken the yen. The World Economic Forum meets in Davos this week. For once, there isn’t a major crisis to deal with. We don’t have a lot of economic data this week, with the exception of leading economic indicators on the 24th. Bonds are down half a point and MBS are down a tick or two.
We have decent earnings reports this morning from DuPont, Travelers, Johnny John, and Freeport. This is one of the heaviest weeks for earnings reports, and erstwhile market darling Apple reports tomorrow after the close.
The WSJ is predicting that companies will increase share buy-backs this year as companies try and figure out what to do with excess cash. This will buoy the S&P 500 and mask the effect of flat earnings. Many strategists believe that US companies have pretty much wrung out all of the excess costs they can and any further earnings growth will have to come from revenue growth. And if you can’t get revenue growth, how do you show increasing EPS? You guessed it – buybacks.
Is the financial system finally back on its feet? We will see if Silver Lake is able to obtain financing for its planned $24 billion LBO of Dell. This is one of the side effects of the Fed’s QE efforts – in an era of rock-bottom interest rates, pension funds and insurance companies are starving for yield, which makes the splashy LBO possible again.
The Chicago Fed National Activity Index came in +.02 in December, down from +.27 in November. The 3 month moving average is still negative, indicating economic activity is below its historical trend.
The House will vote on a 4-month extension of the debt ceiling, which seems to take the default issue off the table. All eyes will then turn to the sequestration cuts and the continuing resolution.
The CFPB has released a summary of the new broker / LO loan comp rules. LO comp may not be based on any of the transaction’s terms of conditions. In other words, the interest rate does not matter, and LOs cannot be comped for steering a borrower to purchase title insurance from an affiliate. Pricing concessions are out as well.
Finally, as a child of the 70s, I note with sadness the passing of Atari.
Filed under: Morning Report |
All Things in Moderation 
Interesting that the House has chosen not to put a number on the debt limit, but allow Treasury to borrow whatever it needs for the next 4 months. Is this new?
Addendum:
Cameron’s speech tomorrow about the EU should be interesting as well:
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Read today that the CFPB has released over 3000 pages of mortgage lending regulations… this month.
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I can think of only one way to get people to willingly give up medical care paid for by a third party.
http://m.guardiannews.com/world/2013/jan/22/elderly-hurry-up-die-japanese
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“Finally, as a child of the 70s, I note with sadness the passing of Atari.”
I’d argue Atari passed a while back when it was sold in 1984. The IP will end up somewhere.
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Brent, I see the offer to suspend the Debt Ceiling for three months as the closest thing to a good faith offer BHO will ever get. Giving Treasury a blank check to meet any reasonably foreseeable necessity so that the debate can focus on BCA and actual appropriations for three months ought to be jumped upon by the WH.
The Ds are suspicious.
WHY?
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Mark:
Why do you assume the good faith of the D’s?
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Whatever made you think I was assuming D good faith? I am wondering why they are suspicious.
I was assuming that it wasn’t paranoia, but some sort of political calculation. But what?
JNC reads everything. We saw that PL’s host wants the Ds to let Boehner get the votes from the R side of the aisle just to see if he can do it. Sargent thought that was some sort of a strategy.
I am totally missing any rational, even partisan political rational, for that POV.
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Mark:
Whatever made you think I was assuming D good faith? I am wondering why they are suspicious.
Suspicion seems to me to imply good faith of the suspicious. People who themselves are negotiating in good faith with another party need to concern themselves with whether their counterparts are themselves acting in good faith, or what the consequences of accepting an offer might be. Hence potential suspicion. But people who themselves are not acting in good faith don’t need to be so concerned with either the good faith of their counterparts or the effects of an agreement, since they have no intention of coming to terms in any event.
I assume that many Dems, particularly BHO, have no desire to reduce government spending. So their calculation is simply whether or not failure to come to terms with the R’s will redound to their detriment or to that of their political rivals. If failure to reach an agreement on spending/revenues/debt increase is likely to hurt them politically, they will seek an agreement that will limit spending controls to being as small as possible. If failure to reach an agreement is likely to injure the R’s politically, then BHO/the D’s will simply avoid coming to any agreement.
So if the D’s seems “suspicious” of the R offer, I assume they have simply calculated that they can blame the R’s for whatever negative consequences may occur from a failure to accept it, not that they are actually concerned with what accepting the offer might mean.
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The New Yorker admits it (and the rest of the media?) practices racial discrimination
“One suspects that a sense of the pressures on her may explain why she is not taken to task as much as she might be for the price of these clothes
http://m.newyorker.com/online/blogs/closeread/2013/01/michelle-obama-inauguration-dress-victory-red.html#slide_ss_0=3
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The New Yorker admits it (and the rest of the media?) practices racial discrimination.
That was your takeaway from this link? Huh. I find that quite an odd (and totally misleading) interpretation.
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I find that quite an odd (and totally misleading) interpretation.
I don’t get that from the article, either.
Okie, did you follow the news of the Rs offering to suspend the Debt Ceiling for 3 mos? If you did, do you have any idea why Ds think it is either good policy or good politics to not join in on the deal?
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“I was assuming that it wasn’t paranoia, but some sort of political calculation. But what?”
What happens after 3 months? Whatever comes out of the sequestration debate / budget, additional borrowing will be necessary. The debt ceiling needs to be taken off the table as a quarterly showdown. It is clearly ridiculous that Congress both appropriates spending that requires borrowing and uses an arbitrary borrowing limit as political leverage. If the spending is passed as law, they need to either match revenue to that spending or allow the necessary borrowing.
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What happens after 3 months?
If no budget deal is reached, the BCA and sequestration are in effect and the Rs have no reason to argue against raising the Debt Ceiling as they will have got their budget cuts and more. If a bipartisan deal is cut on appropriations then it will include a Debt Ceiling increase. And if the Treasury issued new debt instruments during the three months, they could not be reneged upon.
If it all goes to hell in a handbasket, it will have kicked the hell-can down the road for three months. But the 3 mos make a useful negotiating time frame for actual budget-appropriations deals.
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A couple gradeschool buddies worked for Atari coin-op in the late 90s/early aughts. I said “Atari’s still in business?”
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It wasn’t the focus of the article, but a stunning revelation of racial discrimination. It’s undeniable and if admitted to by, say, FOX News giving favorable coverage to, let’s say Laura Bush because she is white, what would be your opinion?
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George, it was all about her being under scrutiny and pressure. Nancy faced a significant fraction of that but Laura never did. HRC was a whole other ball game, I think. She wasn’t even trying to be a traditional FLOTUS so she was fair game, as much as any pol.
I think they all bought expensive stuff, except maybe for Mrs. Carter, and I actually do not recall any of them being criticized for it. Although they took heat on their looks, sexist nation that we are.
Finally, the article did not express or imply that MRO was getting a pass on race. So taking Nancy as the closest analogue, if FOX never criticized Nancy’s “flamboyance” it wouldn’t bother me at all. As with MRO, Nancy was a strong but traditional FLOTUS who deserved not to be treated like a common pol.
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Mark, I followed that news a bit today and have looked at Sargent’s take on it. I don’t really get it either, except to only extend for 3 (or 4) months is still keeping debt ceiling on the table to be used by Rs if they don’t get their way on the upcoming sequestration and budget tussles. Perhaps they don’t want Rs holding it in reserve or as a bargaining chip in those other upcoming debates. But I think the average citizen wants to see them agree on something, just about anything, so it seems to me it has a real potential to backfire on the Ds. Maybe they see an advantage in trying to fracture the Rs further by trying to further damage Boehner’s leadership creds or making the Rs have another public internal fight?
Did you follow the developments on possible filibuster reform? Thoughts? I’ve been wondering about the concept of requiring not just the speaker but a majority of the party filibustering to be on the floor in order to maintain it. Make a majority of them stay up all night.
troll, I did not see any “stunning revelation[s] of racial discrimination” in that link, so it obviously is not undeniable.
Edit: Posted before I saw Mark’s two most recent comments.
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It wasn’t the focus of the article, but a stunning revelation of racial discrimination.
Where? How?
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“I did not see any “stunning revelation[s] of racial discrimination” in that link”
I’m still stunned to learn that the troll reads fashion blogs.
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“I’m still stunned to learn that the troll reads fashion blogs.”
Many, many, many thanks for far and away my best laugh of the day.
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The 2nd term agenda:
http://www.theonion.com/articles/list-of-politically-achievable-reforms-down-to-jus,30977/
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Almost as funny as George the fashion maven.
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You’re right, my fuck-up. Obviously this was referring to the subpar nature of where she received her undergraduate education.
Although it can be harder to talk about—if easier to feel—there is also the question of how she has confronted images of black women in American culture. Her first term was so successful that, unless one is a regular viewer of Fox News or a listener of Rush Limbaugh’s show—which still give her regular doses of hate—one could forget the resistance she faced. Once, when she wore a red dress to a state dinner, she was accused of sympathizing with Communist China. When her husband ran for President in 2008, there were barely veiled insinuations about whether the role of First Lady was really right for her—whether she was too angry, or could really feel comfortable. (One suspects that a sense of the pressures on her may explain why she is not taken to task as much as she might be for the price of these clothes.)
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“The New Yorker Explains Why Media Doesn’t Criticize Michelle Obama’s Pricey Clothes”
By Katrina Trinko
January 22, 2013 4:45 P.M.
Well, of course I’ll defer to that since it’s been published at NRO. I’m just disappointed that you did not give proper attribution and tried to trick all of us into thinking you’re into women’s fashion.
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“markinaustin, on January 22, 2013 at 5:50 pm said:
Whatever made you think I was assuming D good faith? I am wondering why they are suspicious.
I was assuming that it wasn’t paranoia, but some sort of political calculation. But what?
JNC reads everything. We saw that PL’s host wants the Ds to let Boehner get the votes from the R side of the aisle just to see if he can do it. Sargent thought that was some sort of a strategy.
I am totally missing any rational, even partisan political rational, for that POV.”
It’s not rational. It’s fuck you, because we can and they actually believe their own BS about destroying the Republican party to move their agenda forward. I think it will backfire to have any Democrats vote against a clean extension of the debt ceiling at this point and argue that they are entitled as a member of the minority party to do that as a meaningless protest vote.
It’s also about defining extending the debt ceiling with no spending cuts as a complete defeat for the Republicans, as opposed to the responsible thing to do (which was of course the position last week along with the war in Eastasia).
The rational alternative would be to decide that extending the debt ceiling was a good faith gesture by the Republicans and that the Democrats decided to match it with the gesture of having the Senate write a budget by the deadline as the Republicans requested, but that sort of kumbaya doesn’t generate page hits.
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JNC – I have the gnawing sensation that Ds don’t want to write a budget because it is 1] painful work and 2] an opportunity to be criticized for either diddling on deficit reduction, failing some region or state or someone’s pet project, or slashing too much.
There was a pseudo “poison pill” in the suspension, I think for its continuation the Senate had to meet some budgetary goal set by the HoR Rs. But my point was, if they tried to negotiate over the next 90 days, in good faith, but still failed to reach agreement, how would that make us worse off then we are now, and with a bicameral legislature, why would the sense of the HoR have any binding effect on the Senate? We wouldn’t be, and it just doesn’t.
Addendum: WH correctly both politically and policy wise announcing tacit approval [no veto]. Rejecting the PL train of thought, if it can be called a “train”.
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Obamacare starts to kick in. Are we happy yet?
The primary downside to both Obama and Obamacare is that the fucking he/it are delivering will be indiscriminate rather than focused on the supporters who actually deserve what is coming.
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Mark, you forgot 3] there’s an election in 2014. Writing a budget requires laying out specifics on spending, taxes and the deficits. Then instead of being all about the Republicans cutting Medicare it becomes a choice.
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