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 | 1521.4 | 6.8 | 0.45% |
| Eurostoxx Index | 2688.7 | 58.6 | 2.23% |
| Oil (WTI) | 94.04 | 0.9 | 0.98% |
| LIBOR | 0.287 | -0.002 | -0.52% |
| US Dollar Index (DXY) | 81.11 | -0.368 | -0.45% |
| 10 Year Govt Bond Yield | 1.98% | 0.02% | |
| RPX Composite Real Estate Index | 194.5 | 0.2 |
Markets have a risk on feel this morning on no real news. Elections are being held in Italy, with Bersani on track to win. Italian sovereign yields have tightened 20 basis points in response. Bonds and MBS are down.
Sequester week. Bob Woodward had a column over the weekend that said, WH protestations aside, that the sequester was Obama and Lew’s idea in the first place. The WH is releasing all sorts of gloom and doom scenarios about what will happen if sequestration happens. Republicans seem to be content to allow the cuts to happen. FWIW, I do not believe the markets care one way or the other about the impending sequester.
The Chicago Fed National Activity Index showed growth moderated in January, falling to -.32 from a revised +.25 the previous month. Production related indicators explain most of the weakness, although employment and consumption also were negative contributors. The 3 month moving average is still in positive territory, indicating that economic growth continues to be moderately above trend.
The Bernank will be testifying in front of Congress this week. These things tend to be partisan dog-and-pony shows where the questioners are more interested in getting the Fed Chairman to validate their worldview than they are in seeking actual answers. Democrats will undoubtedly be pushing for Bernake to say that sequestration will be an economic nightmare, while Republicans will be pushing for him to say that spending and the debt pose a problem. Democrats will also be looking for support for raising the minimum wage. Republicans will probably want to drill down a bit on the end of QE.
The Bipartisan Policy Center has released a report on the future of housing and the GSEs. With the government guaranteeing 90% of all mortgages these days, there is a push in Washington to get the private sector more involved. They envision phasing out Fan and Fred and replacing them with a “public guarantor,” who has a re-insurance role, stepping in only when private insurers are unable to make good on the loan. They also propose that the government get involved with providing affordable rental housing.
Filed under: Morning Report |
All Things in Moderation 
Good article in the NYT on the sequester politics:
If Republicans cave on the sequester, or allow the FY2013 CR to use the pre-sequester baseline, then they should all resign in mass and go home as they will have no reason for holding office at that point.
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jnc:
If Republicans cave on the sequester, or allow the FY2013 CR to use the pre-sequester baseline, then they should all resign in mass and go home as they will have no reason for holding office at that point.
Very much agree. If R’s cave I may never vote again.
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The sequester is a passing thing. The action will be on the budget or the CR. we all know that, right?
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Any agency head that cuts the visible and necessary in favor of the invisible and optional should be fired.
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They also propose that the government get involved with providing affordable rental housing.
Isn’t this already known as Section 8 Housing, aka dispersing public housing complexes into suburbs so that even the smallest entrepreneur can become a slumlord?
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yellow — alexandria was interested in such an approach a few years back. I don’t recall what became of it. but we had a city planner at a fire department meeting. she actually said the city was looking to spread it out so we “don’t put all the bad eggs in one basket.” i suspect, but don’t know, that the plan was defeated due to NIMBYism
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re: the sequester. nobody is talking about it, besides the local angle. Chuck Todd was on WTOP (local news radio) decrying the lack for progress.
1. any cuts are better than none. even if these “cuts in the rate of growth.” it’s a pathetic start, but better than no start at all.
2. You can’t exempt mandatory spending and think you’re serious about cutting anything.
3. If this derails the economy, we weren’t on sound footing anyway. Let’s find out.
4. I hope I’m interviewed for a man-on-the-street response to this.
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My first year in DC, I lived in an area with plenty of Section 8 housing (Pershing @ Glebe). I liked the neighborhood and we had a nice corner grocery store with a good selection of Latino products. Sadly, a redevelopment deal is replacing much of it with townhouses. It’s walking distance (albeit a long walk) from Ballston Metro.
∂ß
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if NoVa is good at anything, it’s putting townhouses where it would seem impossible.
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The sequester is a passing thing. The action will be on the budget or the CR. we all know that, right?
Tell Martin Bashir that. The dude was almost spitting nails into the camera..
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RBS’s take from their market strategist…
Funny how given all the media around the fiscal cliff countdown at year-end, the fiscal cliff never really disappeared. The reality is that with the sequester the fiscal contraction continues on. When you take into account the BCA caps, it adds up to over $2tn over 10 years. In a gridlocked Congress and everyone disavowing responsibility of the sequester, it’s actually semi-working. The next $2tn is the hard stuff like entitlements and tax codes.
The Democrats will play up the furloughs, shortened workweeks, long TSA lines, grounded aircraft carriers and continue to push the PR war to have upper income earners pay their “fair share”. The Republicans we talk to are remorseful over their Jan 1 deal and felt they already given too much on revenue with nothing in return. Nothing tells me that the administration will compromise from their post-election shift to the left given that they don’t need to. They are winning the PR battle. The Republicans feel like they are the last line of defense and the move is to decide whether a govt shutdown is a winnable proposition.
As we mentioned on Friday, we are seeing revisionist thinking regarding the fiscal drag as retailers report poor Jan-Feb results and the debate over the fiscal multiplier is unknowable until we see the actual data. We continue to look for more of the same–>> Jagged but below-trend growth that does not move the dial on unemployment this year. Interesting the recovery in stocks and Eurozone periphery the last 2 sessions and rates doing nothing.
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“markinaustin, on February 25, 2013 at 8:54 am said:
The sequester is a passing thing. The action will be on the budget or the CR. we all know that, right?”
Correct. But which baseline they use for the CR, pre or post sequester is key. If it’s post sequester then it’s real change. If it’s pre sequester then it was a meaningless 30 day exercise in bullshit.
Another good piece in the Post that states what everyone already knows:
These cuts are real. That’s why there is hysteria over these versus all the “cuts” that Obama agreed to in 2011 and 2012 that were supposedly an order of magnitude greater (trillions vs billions).
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The NYT is incoherent on fingerprinting vs DNA:
Fingerprints can be and are run through a database for matches with old crimes just like DNA.
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Not even a pretense here:
More details:
http://www.businessinsider.com/citis-government-job-bonus-for-jack-lew-2013-2
http://www.bloomberg.com/news/2013-02-21/citigroup-s-man-goes-to-the-treasury-department.html
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jnc:
Yeah, I read about Lew’s contract this morning. Quite bold.
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Quite bold.
Hiding in plain sight, as it were.
A good reason to scuttle Lew? Yep. Tax shorting [cough!] would have been a good reason to scuttle Geithner.
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I wonder if there is a claw back provision for non-performance?
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Hah! That is a good one. Deferral plus clawback.
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Nice. Pay to play is alive and well in the “Most Ethical Administration in History”
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@jnc4p: “The NYT is incoherent on fingerprinting vs DNA:”
While I am generally in favor of anything that holds back the inevitable reality of the coming police state, and delays the eventually process of capturing and tagging us like animals in a game preserve and collecting everybody biometric data so all evidence at every crime can be run against the database . . .
The NYT is incoherent on the subject. DNA is a genetic fingerprint; both require special tools to identify and make the comparison and compare against a database.
In this case, I’m actually sympathetic with what I perceive to be the underlying motivation (supporting a check on police power). Also, I think there are cases where too much is drawn from the presence of DNA evidence, depending on it’s source, as people do a lot of stuff, go a lot of places, and shed a lot of DNA. However, the argument is incoherent: it’s okay for fingerprinting, because that’s different somehow. But DNA? Now it’s bad, because it’s . . . genetic fingerprinting. Which is not good.
While I’d like more coherent arguments being made when it comes to fighting to good fight (and it would not be me: mine would be a slippery slope argument that suggests we’re just moments away from Big Brother implanting data recorders in our spinal columns that will report back to the government, and our insurance companies, whether our cholesterol is high and whether or not we snuck a cigarette when we’re claiming to be non-smokers on our insurance forms) . . . I would prefer a little more caution as regards to application and collection of DNA evidence, and some guidelines.
That is, I’d prefer for it not to be possible for the police or other folks in authority to arbitrarily collecting DNA data from me in some context (driving violation; arrest without charges; job application) and use it for, you know, whatever.
Although I’m pretty sure I’ve already agreed that Apple can do just that, last time I clicked on their 500 page EULA in iTunes. *sigh*
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@jnc4p: “Pay to play is alive and well in the “Most Ethical Administration in History””
ANy administration, organization, or individual who is actually ethical with not ever assert or attempt to label themselves directly or through 3rd parties “the Most Ethical Administration in History” or promise to “return ethics to government”, etc.
Also, it’s worth noting that most people find ethics contextual. That is, it’s okay when they do it, because they are doing it for the right reasons, because they are good people. It’s bad when other people do it, because they are doing it for the wrong reasons, because they are bad people, easily identified as such because they are members of a different tribe. Ergo, pay-to-play is not unethical, ipso facto, it is only a neutral behavior that can be unethical, when Republicans do it, because they are ideologically wrong, thus when they exercise pay-to-play, it is for the wrong reasons and with the wrong people, thus: unethical.
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@jnc4p: ” the contract was written to reward Mr. Lew for treating the bank like a revolving door. Citi says it likes to accommodate employees who do public service or work at nonprofits. But the Lew contract was specific about a senior job in the federal government.”
Sweet! Where can I get a job like that? I don’t know if Lew negotiated for that, but if he did . . . he’s my hero.
I have never had a job where there was any kind of bonus plan for me quitting. Damn, I’ve been missing a great angle, there!
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I have never had a job where there was any kind of bonus plan for me quitting.
You gotta pack your golden parachute before you get on the plane. Romney also had a great exit strategy if Bain had gone toes up. That is why they can’t relate to the concept that minimum wage workers don’t have the mobility or negotiating edge that captains of industry have. The whole “Well, just get a better job.” strategy only works in certain favorable circumstances.
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@ScottC: “Very much agree. If R’s cave I may never vote again.”
Do what I do. Protest vote! Don’t like you, don’t like you, don’t like you . . . I’m voting for the dark horse/crazy guy! Although I thought Gary Johnson was awesome . . .
And, frankly, I’d vote for Chris Christie in 2016 no matter what the Republicans do. Cuz I love me some Chris Christie. I’ll vote for whatever R is running agains Steve Cohen locally, even though he’ll keep winning that seat until he retires, no matter who runs against him. But perhaps I’m just too easy.
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@yellojkt: ” The whole “Well, just get a better job.” ”
Well, “just get a better job” does work, to a degree, and would work a lot more often, if people would, more often, make the effort to go out and get a better job. I’ve seen it anecdotally, even experienced. I’ve hated a job, and didn’t go get a new one until I got laid off . . . then got a job making less money that was otherwise a much better and more interesting job, then got a job making good money, then better money, all by job jumping.
I know people who I know don’t like their jobs and could get better ones, sometimes much better ones, if they would look for another job, but they don’t. Or, if they were willing to relocate (not a small issue, but an unwillingness to do so does limit job possibilities).
While I can see that most people could get a better job, if they were willing to (and confident enough to) put the effort into the process . . . I doubt I’m ever going to find a job with a golden parachute. Or a quitting bonus. That is rarefied air indeed. Although, if I can find one, I’m all for it.
And one probably shouldn’t overrate “relating” to something. I imagine many blue collar conservatives can relate very well to a lack of job mobility, but would still sympathize with Romney’s position, and not believe it is government’s place to step in and somehow fix the plight of minimum wage workers.
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Kevin/yello:
I think Lew’s contract is notable not because it has a great escape clause/golden parachute, but rather because of the implicit quid pro quo. He’s not being paid just for leaving. He’s being paid for taking a high level government job. Now why in the world would Citi pay someone to work for the government, I wonder?
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@ScottC: “Now why in the world would Citi pay someone to work for the government, I wonder?”
I dunno. I can’t figure it out. Why would CitiBank want somebody in high placed position in government that they’ve pre-bribed?
I’m figuring it’s philanthropy.
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As previously noted, the problematic issue is the lack of a claw back provision if Lew’s tenure in government isn’t satisfactory to the board. Or to put it another way, you have to ensure that the cop stays bought.
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JNC, I am just curious about the reactions you got to commenting on Lew at PL. Immediately, IIRC, Don Juan Banned and I agreed with you and “drindl” scoffed. Now Banned and I would always agree that bought governance is bad, as would you. Did any of the “liberal” commenters – some of them are very bright – agree with you?
I actually think it is despicable when partisans defend scandalously bad governance because it is their guy. I suspect that “shrink” would have been dismayed by this contract and critical of it, and probably 12BB and Rashomon, if they saw it, but I wonder. Did you stick around long enough to see the reactions?
I do not expect purity in human beings. But this contract was like a screeching siren to me.
Addendum: I see that LMS and ‘Goose agreed with us [and NoVA did, but was a bit cynical; of course NoVA does not count as a liberal].
So two liberals I think are smart and honest joined in. That is encouraging.
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