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 | 1518.8 | 2.6 | 0.17% |
| Eurostoxx Index | 2656.9 | 8.1 | 0.30% |
| Oil (WTI) | 97.85 | 0.3 | 0.35% |
| LIBOR | 0.29 | -0.002 | -0.68% |
| US Dollar Index (DXY) | 79.98 | -0.125 | -0.16% |
| 10 Year Govt Bond Yield | 2.00% | 0.02% | |
| RPX Composite Real Estate Index | 193.5 | 0.3 |
Markets are up slightly after retail sales came in as expected. Ex auto and gas, they disappointed. However, there was some fear that the Jan 1 tax hikes would curtail consumer spending. At least this data point shows it hasn’t. Although to be fair, a +.1% increase is nothing to write home about. Mortgage applications fell.
CoreLogic’s latest Market Pulse previews 2013. They predict that the refi boom is over, but it will be some time before the purchase market comes back. They note that 2012 census data indicates that household formations increased by 1 million, which is getting back to normalcy. As I have said before, there is a lot of pent-up demand here, as the low household formation numbers of the last 5 years have been driven by economic weakness, not demographics. They do forecast that margins may get compressed as lenders fight over a declining amount of activity. That said, you can’t turn a refi shop into a purchase shop overnight. They also do an interesting analysis of the expected effect of QM loans. Near term, it will probably increase the profile of the GSEs. Longer term, it will greatly increase performance characteristics. Anyway, lots of good stuff in here. RTWT.
27% of borrowers who refi are shortening their terms, according to Freddie Mac. Cash-out refis account for just 16% of refinances, while cash in refis have jumped to 39%. Ironic that consumers are getting more conservative when the Fed is using every tool in its toolbox to get consumers to do the exact opposite.
Looks like the sequestration cuts are going to happen.
Filed under: Morning Report |
All Things in Moderation 
“Ironic that consumers are getting more conservative when the Fed is using every tool in its toolbox to get consumers to do the exact opposite.”
I wonder how much of this is just simple spite. I’m not replacing my car until it dies. I’m certainly not buying a second one. I’m not getting a new TV. our laptop is pushing 7 years old and is creaking along. pre-recession, all of these things would have been replaced.
my wife and I stopped exchanging gifts for birthdays, Christmas, and our anniversary. We just don’t need the extra stuff. If we have a second kid — we probably won’t –, they’ll share a room. I’ll invest it and save it but i’m not wasting on consumer goods.
Our plan is to pay off the house and quit. POTUS is right. we didn’t build that. and we’ve no interest in even trying.
[edit: i don’t know if travel is considered consumer spending .. i tend not to think of it that way, but that’s an area where we have not cut back]
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Look, we’re utterly screwed as a country, but at least the left has their priorities straight.
http://www.dailykos.com/story/2013/02/12/1186721/-The-sip-of-water-laughed-at-world-wide
But will this add one dime to the deficit?
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McWing, that’s one of the stupidest comments I’ve seen you post.
(1) How, exactly, are we utterly screwed
(2) What do you mean by “the left has their priorities”
(3) What does this have to do with the deficit
If you’re trying to be funny you’re failing to amuse. If you’re trying to make a point you’ve also failed–quit with the cheap jabs and write something.
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Mich:
How, exactly, are we utterly screwed
We have a government that spends more money than it can afford, an electorate that wants more and more government provided goodies paid for by someone else, and a political class all too happy to promise it to them. The document that was designed to restrain the federal government has ceased to be enforced as a matter of principle and is instead selectively enforced as a matter of preference. The economy is decreasingly free and increasingly effected by an ever-growing amount of statist regulations. And we have a significant voting constituency which actually likes it that way and an even more significant voting constituency that is too stupid to understand or care why it matters.
Hence, we are utterly screwed as a country.
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Compare and contrast.
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“I wonder how much of this is just simple spite. ”
Or, the wealth effect in reverse. So much consumption was driven by cash-out refis either directly or indirectly (people running up credit card debt as the equity rises in their house).
I do think that real estate is done going down, so even if people don’t go back to doing cash out refis to buy a boat, consumer spending (and psychology) will be a little more constructive..
That said, as I could see from my grandparents, the Great Depression made them frugal, and it wasn’t just them – it was most of their friends too. Perhaps the Great Recession was scarring enough that those days of big spending are over for a while.
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History will show that the level of taxation required to sustain a welfare state with an aging demographic destroys economic growth and fosters rampant cheating. Further, a 16-20 trillion dollar debt can only be resolved by defaulting and or inflation, both of those destroy growth. The electorate desires a welfare state and low taxes, in essence, bread and circuses.
It’s over and has been a nice run. We have gotten the government we wanted, and we’re getting it good and hard
Finally, feel free to call my comments stupid, as I have consistently done to others in the past.
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Frontline piece last night on the budget negotiations was a surprising disappointment.
http://www.pbs.org/wgbh/pages/frontline/cliffhanger/
Too much focus on the hurt feelings of the principles involved and not enough on the policy frameworks. For example, no discussion over the fact that the Bush tax cuts were all scheduled to expire and how that impacted the various strategies nor any discussion of the trade offs of letting them all expire and then deal with the issue vs cutting a deal beforehand.
Instead it was how Obama almost broke his phone when Boehner didn’t call him back in a timely manner.
They also omitted a discussion of the results of the lame duck from 2010 which is crucial to understanding the context of the subsequent deals.
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“Michigoose, on February 13, 2013 at 9:11 am said:
McWing, that’s one of the stupidest comments I’ve seen you post.
(1) How, exactly, are we utterly screwed”
I’d argue that an objective indicator of this will be when you see the “best and the brightest” of Americans migrating to other countries for job opportunities, i.e. the opposite of what the previous state of affairs was. This is pure anecdote, but I know a fair amount of the type A parents who are having their kids learn Mandarin.
The other observation is that we are living on borrowed time with interest rates, the national debt, and the associated servicing costs. Once rates start to rise again, all the deferred hard choices will all hit at once.
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“Ironic that consumers are getting more conservative when the Fed is using every tool in its toolbox to get consumers to do the exact opposite. ”
Or perhaps cause and effect. Everyone knows these aren’t normal times and expectations are set that they will continue as the new normal, and/or there is still another shoe waiting to drop.
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You have to have faith that your efforts will be rewarded. I saw how the rich were vilified. I don’t see that changing over the next 10-20 years. Totally makes me want to build a practice of my own. get enough clients and a book of business that justifies hiring other lobbyists, policy experts, etc (at six figure salaries).
or, i can assume that if I put in that effort, by the time I build up that client base (10-15 years), the confiscatory tax rates need to support the two functions we’ll be doing — health care with and an army — will not have justified the effort. the reward isn’t looking so good. so why take the risk and sacrifice the time away from my son.
better to just plug along and go home at 5. I’ll never win the race, and even if I do, the trophy won’t be what it used to be, so why even run it. which changes the outlook from one of trying to move up the latter, to just holding your slot.
sorry to be downer. my concern now isn’t bettering my situation, but not losing ground.
I very much identified with this: see: http://abovethelaw.com/2010/09/earning-250000-does-not-make-you-rich-not-in-my-town/
“No, if you are making $250K a year, what gets you out of bed every morning isn’t even the desire to become rich. Instead, you’re motivated by the white-knuckle fear that something will go wrong and you’ll be cast back down with the sodomites who struggle valiantly to eke out an existence on $50K or less. You are certainly not rich, but you are terrified of becoming poor.”
and this is bad, as apparently my group (HENRYs) are holding back the recovery. see: http://www.bloomberg.com/news/2012-06-18/the-problem-with-henry-may-derail-u-s-recovery.html
All my colleagues are circling the wagons and looking inward. That can’t be good for growth.
I very much understand that this mindset is a luxury. This isn’t a conversation that’s happening with the working poor or middle class (if you want to exclude me from that definition). regardless, here we are.
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Nova, I made the exact same analysis and conclusion when deciding whether to start my own business or work for someone else after seeing what my parents went through running their own business.
I have an LLC for tax purposes when I do side consulting, but I will never, ever, hire a single employee. I’ll turn down business before I do that.
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From a PL discussion, Paul Krugman on the economic effects of raising the minimum wage and it’s cousin, the living wage. It’s Krugman doing a book review of a book advocating for a living wage.
His conclusion:
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At least he is finally separating his morality from his economics and not trying to argue that the laws of supply and demand are somehow suspended in the labor market.
Of course there will be unintended consequences, and it probably won’t do much to help the people it is intended to help, but it is the intent, not the result that matters. Everything is ok if your heart is in the right place.
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jnc’s decision (and mine to a lesser extent) should terrify us all.
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Brent, that’s before he was “radicalized” (his own words) by the Bush administration. The article is from the 1990’s.
The piece is perfect to use for all those who post about Krugman is the greatest economist ever who got everything right and also to counter lectures about “textbook economics”.
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Cash-out refis account for just 16% of refinances, while cash in refis have jumped to 39%.
Part of this is that housing values have declined. So, those who want to refi but have lower home values/appraisals have to put in more cash to get to 80% LTV to qualify or face higher interest rates/PMI.
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Scott:
Did I ask you?
Lulu:
Butt out.
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Mich:
Did I ask you?
No, but I had an answer so I thought I would share it with everyone.
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Good to see you, lms.
FYI, the “good and hard” phrase was just a play on HL Mencken, who famously said “Democracy is the theory that the common people know what they want, and deserve to get it good and hard,” a quote which had been posted here not too long before I used the phrase.
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McWing:
History will show that the level of taxation required to sustain a welfare state with an aging demographic destroys economic growth and fosters rampant cheating. Further, a 16-20 trillion dollar debt can only be resolved by defaulting and or inflation, both of those destroy growth. The electorate desires a welfare state and low taxes, in essence, bread and circuses.
This is a statement that we can discuss, argue about, whatever you want to call it. I both agree and disagree with it–I happen to think that we’re supporting the elderly at the expense of the younger generation, but I don’t think that the “electorate” desires a welfare state.
When you hide behind flippant statements and making cheap shots, yeah, that’s stupid. And you aren’t, which is why I call you on it.
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I have to admit I’m a bit lost.
but, that wouldn’t be the first time.
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NoVA:
You have to have faith that your efforts will be rewarded
What reward are you looking for? To live in a bubble of your own making, or to live in a society that is rich in opportunity for those who are willing to work hard, take risks, and yet recognizes that there are souls among us that aren’t able to do that? I don’t want to be my brother’s keeper, but some brothers need an assist and I think that we are a better society if we accept that and act on it.
I don’t find the idea that you and jnc haven’t wanted to create companies of your own terrifying–I think you’ve weighed the benefits and risks and chosen which benefits you want and what risks to avoid. I, also, am a wage slave because I’m not willing to risk ending up on the street because I couldn’t be the next Stephen King or Alton Brown. They went out on a limb that I can’t.
Your efforts are being rewarded–look at the time you get to spend with your son.
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Michi — I wrote a response, but it was the most cynical and jaded thing I’d ever read.
Let me sleep on it and write something more worthy of your time.
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Hi Lms! Hope all is well;-)
Michi,
As I wrote, feel free to call my comment(s) stupid as I have felt free to share my opinion on the quality of the contents of others.
The so called “cheap shot” was mine when the take away from the DailyKos link was that everything Marco Rubio said, and presumably stands for should be utterly discounted and dismissed because he, shudder, took a drink of water?
And, in light of already unsustainable levels of spending along with an unplayable level of debt, the American electorate re-elected a man whom they knew/know has already demonstrated a habit of massively increasing the size and scope of our already unsustainable welfare state but I’m to take away the idea that Americans don’t want that? And that I’m to be convinced that new spending ideas will be “deficit neutral”? What, like Obamacare? Please.
Snarky, yes. Flippant, I hope so, that’s what I was shooting for. Stupid? I’d call it concise and prescient.
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Look, we’re utterly screwed as a country,
That part you explained. I don’t agree with your gloomy pessimism but it’s a valid perspective.
but at least the left has their priorities straight.
This part was pure trolling by asserting that liberal criticism of Rubio was largely focused on his sub-Jindal delivery style and the awkward water break in particular.
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in light of already unsustainable levels of spending along with an unplayable level of debt
Dr K would disagree with you. 🙂 We’re making a gamble, and I disagree with the term “welfare state” because you mean in pejoratively. Are we moving toward a more socialist society?–probably, but for the reasons that I briefly put forth in my response to NoVA, I don’t think that’s something to be feared. I also think that the majority of Americans agree with me. . . which doesn’t mean that you, as a libertarian, are wrong just that you are going to have to decide which benefits you want to derive from the new gamble.
We’re a pluralistic bunch, we Americans, and nobody has yet had the be-all-and-end-all answer on how we should live.
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“This part was pure trolling by asserting that liberal criticism of Rubio was largely focused on his sub-Jindal delivery style and the awkward water break in particular.”
How many of the diaries over at the fightin’ nutroots focused on Rubio taking a sip of water?
http://www.dailykos.com/search?text=marco+rubio&time_begin=02%2F06%2F2013&time_end=now&text_type=any&text_expand=contains&search_type=search_stories&time_type=time_published&submit.x=0&submit.y=0&submit=1
Here’s a content focused front page at PuffHo.
http://www.huffingtonpost.com/
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How many of the diaries over at the fightin’ nutroots focused on Rubio taking a sip of water?
If it’s your thesis, you should be doing the stats. For my homework assignment, I sorted the articles by most recommendations. Two of the top ten were about the glass of water. Is that the bar for being obsessed with what was arguably the only unexpected portion of the rather bland and poorly delivered SOTU rebuttal?
As for the HuffPo page, the linked article was a rather detailed takedown of his climate change (so unfalsifiable!) heresies.
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“We’re making a gamble”
No, there is no gamble involved here. Every country that has debased their currency to comparable levels have destroyed themselves. There is no mystery or even debate about it.
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Andrew Sullivan manages to make it all the way through his Rubio fisking without mentioning the glass of water once. He does finish up this way:
Perhaps he should have obsessed over the fact that Poland Springs is from Maine not Florida.
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yello:
Kind of ironic, seeing Sully of all people talking about “intellectual relevance”, don’t you think? I mean….it’s Andrew Sullivan, for God’s sake!
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Does he mention if Rubio birthed Trig Palin? Why any presumably rational person would willingly read Sullivan is truly beyond me.
You’re aware that he thinks there is a conspiracy surrounding the birthing of Trig Palin right?
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You’re aware that he thinks there is a conspiracy surrounding the birthing of Trig Palin right?
Well, there are an awful lot of unexplained coincidences…
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There is no mystery or even debate about it.
Sure there is. Or do you know for a fact what’s going to happen? If so, there are a lot of investment gurus who would like to pay you some big bucks for your insider info.
Does he mention if Rubio birthed Trig Palin?
See, here is where you start beating dead horses that are already dust. Give it a rest. Making a Rafalco joke would be much more current.
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Michi, the big money guys no the collapse is coming, just not exactly when. Of that, have no doubt. Name a country that debased their currency to the extent we have that has not eventually resulted in massive hardship?
And if people keeping citing freaks like Sullivan I’m gonna keep riffing on it. Taking that Trig Truther seriously says a whole lot more about yello than it does me.
Yello, you’re joking right?
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And TrigTrutherism is never not funny!
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And if people keeping citing freaks like Sullivan I’m gonna keep riffing on it.
And ScottC can’t stand Taibbi. I’m going to have to start a scorecard of who can be cited to whom. It’s all very confusing. Who are the people that hate Krugman?
Yello, you’re joking right?
I never use smileys. That is up to you to figure out.
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yello:
Who are the people that hate Krugman?
Hate is a strong word, but it is close enough for government work. Count me in.
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lms:
I’m not buying what you’re selling Scott
Not selling anything, lms. Be well.
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Yello, as you know, I didn’t write that you couldn’t cite him, I expressed shock (and now express disgust) that anyone takes him seriously. I thought we were beyond “banning” citations, regardless of how loathesome they are, and Sullivan had to rank up there with David Duke, 9-11 Truthers and that weird chick who ran for AG in CA who’s a huge birther and filed all those lawsuits.
I’m not a book burner, I’m a freedom of speech absolutist. If you want to cite Sullivan in a context other than contempt, I’m going to ridicule him and those that take him seriously
Yello, the douchebag claims that there is a conspiracy around who birthed Trig Palin. A conspiracy for Cripes sake.
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Don’t be a stranger Lms, your comments are always appreciated!
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I had a burning cop killer and a WKC dog show to watch and some legal reading to do. Sacrificed watching SOTU and the anti SOTUs.
Now I am going to watch Scott’s link – or maybe tomorrow.
Rubio will make a strong candidate for the Rs regardless of an anti-SOTU, which is always a tough act. I vaguely remember Jack Kemp giving a good one. Is that right, or am I just recalling Jack fondly, because I liked him?
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mark:
I vaguely remember Jack Kemp giving a good one. Is that right, or am I just recalling Jack fondly, because I liked him?
Not sure, but I do recall seeing him drink a glass of water once, so it’s hard to imagine he gave a good speech.
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I’m going to ridicule him and those that take him seriously
Why? What does that accomplish?
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“Why? What does that accomplish?”
Well, shame in taking that freakazoid Sullivan seriously is probably too much to ask for, so I’ll settle for at least a niggle of doubt that the comment reader has for the (hopefully it’s more than a niggle, more like nausea) for the cited source and for the believability of the commenters underlying argument that required support from the likes of that sick bastard.
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Well, OK, McWing.
Many of your sources strike me the same way, so OK.
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I tend to roll my eyes whenever there is a Daily Caller or Breitbart link but I usually hold my nose and click through to judge the article on its own merits.
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lms:
Done.
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Michi — I’m struggling with how to best answer your question. I think I’ll draft a post on it.
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“ScottC, on February 14, 2013 at 7:15 am said:
lms:
Done.”
She asked to be wiped from the board?
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jnc:
She asked to be wiped from the board?
She asked me to remove her comments from yesterday. They are still in the trash if you want to see them or put them back up, but she requested that they be removed and since she doesn’t have permission to do it herself, I obliged.
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