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 | 1494.0 | -1.3 | -0.09% |
| Eurostoxx Index | 2710.9 | -21.2 | -0.78% |
| Oil (WTI) | 97.69 | -0.2 | -0.26% |
| LIBOR | 0.298 | -0.001 | -0.17% |
| US Dollar Index (DXY) | 79.31 | 0.026 | 0.03% |
| 10 Year Govt Bond Yield | 1.97% | -0.02% | |
| RPX Composite Real Estate Index | 193.3 | 0.2 |
Markets are down small as the earnings reports continue to stream in. Economic bellwether UPS missed analyst estimates. Initial Jobless Claims came in at 368k. Incomes and spending rose. Bonds and MBS are continuing to rally after the FOMC statement yesterday.
The FOMC statement broke little new ground with the exception that they may have walked back their plan to end QE this year. Recall from the minutes of the Dec meeting, the consensus seemed to be that purchases of Treasuries and MBS would end sometime in 2013, probably towards the end of the year. That was unexpected and caused a sell-off in bonds. Yesterday, they said that if the outlook for the labor market does not improve substantially, they will continue to purchase Treasury and agency MBS. That caused a rally in bonds yesterday. Aside from that, the minutes contained nothing new.
As the sequestration approaches, defense contractors are relatively sanguine. Typical corporate optimism or do they know something the rest of us don’t? Regarding the sequestration the latest amount for spending reduction is $85 billion. The requested increase in spending from 2012 to 2013 is $74 billion. So we are really talking about flat YOY spending (it really is a drop of $9 billion in the context of a $15.8 trillion economy). The most likely outcome is that the sequester happens and no one notices.
Another underwater refi program is in the works, which would allow underwater borrowers in private label securitizations to refi into a government loan. Another pilot program would have Treasury buy mortgages out of private label pools and mod the rates. A backup plan would have Treasury cut the rates and pass on the difference between the old and new rate to the investor for 5 years. If Washington comes up with a robust plan, the refi boom (which was thought to be over) could still have some legs.
Opposition to Obamacare is coming from an unlikely source: unions.
Filed under: Morning Report |
All Things in Moderation 
“The FOMC statement broke little new ground with the exception that they may have walked back their plan to end QE this year. ”
Seems a relatively big deal to me.
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The most likely outcome is that the sequester happens and no one notices.
Assuming that the 22% decrease in defense spending was at least partially responsible for the GDP contraction in Q4, another 8 – 10% decrease should also have some effect. Couple that with an 8 – 10% decrease in other federal discretionary spending, and I’m pretty sure you all will notice. I certainly will because my budget will take a ~10% cut in the middle of the FY so I’ll probably have to let someone go. And I know I’m not the only federally-funded researcher that is thinking about how to cope with a mid-year budget cut.
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The Head Start program I represent as a public service will contract noticeably.
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Fitting:
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jnc:
Is there any evidence that this Council had a positive impact on jobs or competitiveness?
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No, it looks like it only met four times. I would have picked Andy Grove to head it instead of Immelt.
http://blogs.wsj.com/washwire/2013/01/31/obamas-jobs-council-disbands/
http://www.businessweek.com/magazine/content/10_28/b4186048358596.htm
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Well, at least they have a spiffy website:
http://www.jobs-council.com/
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OT: Good long form piece on the North Dakota energy boom in the NYT Magazine
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