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 | 1493.5 | 1.1 | 0.07% |
| Eurostoxx Index | 2581.6 | 11.1 | 0.43% |
| Oil (WTI) | 92.45 | -0.2 | -0.19% |
| LIBOR | 0.287 | 0.001 | 0.17% |
| US Dollar Index (DXY) | 81.73 | -0.137 | -0.17% |
| 10 Year Govt Bond Yield | 1.85% | -0.03% | |
| RPX Composite Real Estate Index | 194 | 0.0 |
Markets are flattish this morning on no real news. Italian Sovereign Yields are slightly lower after the sell-off of the last two days. Mortgage Applications fell 3.8% last week. Durable Orders dropped 5%, which was a disappointment, but most of that looks to be due to Boeing and their battery problem. Strip out Boeing, and orders were up 6.3%, which is a signal that businesses are starting to spend on CAPEX. Fed Chairman Bernake will address the House Financial Services Committee today. Bonds and MBS are rallying. For those that follow technicals, it looks like the 10 year has broken out of its bear trend of the last 4 months.
The Bernank spoke in front of the Senate Banking Committee yesterday and seemed to tamp down speculation that the Fed intended to end QE any time soon. Remember the December minutes seemed to indicate that there was a consensus forming that purchases of MBS and Treasuries would end sometime this year. This accounts for the 15 basis point rally we have seen in the 10 year over the past few days. He also urged the government to find a way to kick the sequester can down the road and replace it with more gradual cuts, while at the same time playing down the “fiscal armageddon” predictions.
Bernake assured the Committee that the Fed was monitoring the unintended consequences of low interest rates and said that the risks of new bubbles were offset by companies using low interest rates to lock in low borrowing costs for a long period. Almost on cue, Bloomberg has a story regarding this exact issue, where the yield pigs are feasting on junk bonds, which “trade like dot coms.” As an aside, Radian (remember them? the mortgage insurer left for dead in the depths of the crisis?) They just priced a convert deal, 2 1/4s up 25. Its raining money out there..
Jamie Dimon said yesterday that banks are accumulating more capital than regulators require and will not know what to do with it in two years. “Lend it” is the obvious answer, but if you can lock up long term capital in the bond market for less than your dividend yield, what are you going to do as a CFO?
The jumbo market is coming back. While still nowhere near pre-crisis levels, jumbo origination is up 60% from last year. While still hard to get, the loans are priced aggressively, at about a 23 basis point spread to conventionals. A pick up in jumbo activity may well foreshadow the return of the private label market.
Filed under: Morning Report |
All Things in Moderation 
Anyone know why the “recent comments” widget has disappeared? Or maybe it’s something you intentionally decided to eliminate? Just curious. It makes it more inconvenient for those of us who are not authors/admins and don’t have access to the dashboard comments.
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lms:
Anyone know why the “recent comments” widget has disappeared?
Nope.
It makes it more inconvenient for those of us who are not authors/admins and don’t have access to the dashboard comments.
Just say the word and you will be an admin again.
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No idea.
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Another good piece by Matt Miller on the sequester politics:
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Phil Gramm puts some historical perspective on the sequester. Gramm-Rudman cut nondefense spending by 4.3% and defense by 4.9% in 1986. Democrats made the same dire predictions then that they are making now. Did anyone notice?
http://online.wsj.com/article/SB10001424127887323384604578327792209356054.html?mod=WSJ_Opinion_LEADTop
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No thanks, I still enjoy reading though, so thought I’d mention it as it’s made it more difficult. No biggie.
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lms:
I don’t know where it used to be, but I added it back underneath recent posts.
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Greg Sargent notes the worst case scenario for Democrats that voters may not be impacted by the sequester.
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I moved it back up above “recent posts” where it used to be; now I need to go back in and see if I can reset it so that the avatars don’t show up.
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Tweeted by Donna Brazille today:
“@donnabrazile: What’s on your menu? Just got off the phone with my health care provider asking them to explain why my premium jumped up. No good answer!”
It’s a real stumper. I hope she can crack it.
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McWing:
It’s a real stumper. I hope she can crack it.
Hilarious. You know, I always thought that most high ranking Dems who were selling Obamacare as if it was going to make things cheaper were just liars, preying on the economic illiteracy of the masses. But maybe they are just plain stupid and actually believed their own BS.
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Good sequester piece:
“The Strange Game Theory of the Sequester
The Obama administration wants the sequester to hurt immediately so the public will clamor for its reversal. But will this gambit work? Probably not.
February 27, 2013 • By David Dayen ”
http://www.psmag.com/politics/game-theory-sequester-economy-cuts-53374/
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jnc:
Don’t you think they’d have been planning ahead? If Don Juan is right and that ICE official released those detainees to make a point, couldn’t it have just been jumping the gun?
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Interesting if true:
Whoa. RT @SteveKrak: “Very senior person” at WH emailed Bob Woodward “you’re going to regret doing this,” says Woodward live now on @CNN.
Wouldn’t put it past this WH at all…
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Wouldn’t put it past this WH at all
Oh, please. They’ve been clueless but not stupid, and this would be stupid.
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Mich:
Oh, please. They’ve been clueless but not stupid, and this would be stupid.
Do you seriously think Woodward is just lying?. He was pretty specific and adamant.
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They did it to the dissident bondholders in the GM bankruptcy…
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“Michigoose, on February 27, 2013 at 6:00 pm said:
Wouldn’t put it past this WH at all
Oh, please. They’ve been clueless but not stupid, and this would be stupid.”
The political hacks are this stupid. I don’t think it’s anyone on the policy side. They’ll probably just threaten to cut off his access, etc.
I would also note that compared to the Nixon administration which Woodward dealt with the Obama people are rank amateurs in terms of making an effective threat.
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jnc:
The political hacks are this stupid.
Who do you think is the most senior, non-policy political hack in the White House? Woodward emphasized that it was a very senior person.
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Ahh, Woodward Vs. The White House! Is everybody else as turned on as I am? What’re the Juiceboxer’s gonna say? They work with him at WaPo.
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Probably Jay Carney.
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I bet it’s Valerie Jarrett.
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That was going to be my second guess Troll, and you are probably right. The press secretary usually knows better.
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I still don’t think that they’re stupid enough to try it and not think that Woodward would just go to the media about it, but I’ll wait to see. And if it does turn out to be true I would also guess Valerie Jarrett.
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How long before the NYT dishes on Woodward? I bet by Friday AM, there’s a nice, nasty, heavily (WhiteHouse) sourced piece about Woodward.
Takers?
This has got to be killing Sargent. What did the MM emails say about him? He’ll print anything they give him? It’s not like the editors are going to let him put anything on his blog.
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Buzzfeed says its Sperling.
http://www.buzzfeed.com/bensmith/gene-sperling-bob-woodward?s=mobile
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Ha! Another Juiceboxer joins the fray,
“@mattyglesias: Woodward’s managed to make me suspect Nixon got a raw deal.”
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OMG! It was Sperling! And he was told he’d regret it!
Emphasis mine. Oh, please, that’s a threat?
Drama queen.
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Mich:
Oh, please, that’s a threat?
Agreed…in context that does not come off like a legitimate threat. More like “You are wrong and eventually you will realize it.”
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Another apparent overhyped report is now revealed. Remember that WSJ article on Lew’s Citi contract that had JNC and me and LMS and ‘Goose all in a huff? Business Week quote the contract here:
The relevant language from Lew’s Citi contract (p. 3):
“Notwithstanding the foregoing, if your employment with GWM terminates by reason of your acceptance of a full-time high level position with the federal government or regulatory body prior to the payment of any incentive or retention award for performance year 2008 or thereafter, while any such award is not guaranteed, it would be consistent with GWM’s practice for you to potentially receive such an award to reflect your performance during the period prior to such termination.”
Click to access BV_022113_233045.pdf
OK – if this is true, it wasn’t a golden parachute, just a promise of non-forfeiture of a pro-rated bonus were any due, otherwise.
I may not consider WSJ opinion pieces a solid source after this.
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Yes, with the full E-mail it appears to be a bit hyperbolic of Woodward to argue that it was a threat, especially in the context of an apology letter.
This is also worth noting:
“but that it was supposed to be replaced by entitlements and revenues of some form is not controversial.”
None of the current Democratic sequester replacement offers (i.e. the Senate one) contain entitlement cuts, so presumably that means that the Republicans are likewise justified in rejecting any new revenues.
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jnc:
so presumably that means that the Republicans are likewise justified in rejecting any new revenues.
Obama already got his tax hikes, so the R’s are justified in rejecting new ones no matter what they offer.
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I understand President Obama got tax increases. But I see no reason to NOT close egregious corporate loopholes in order to bring in more revenue. If I’m not mistaken, our government, both Federal and State spend more on Corporate Welfare than Social Welfare (not including SS and Medicare as I don’t consider those welfare). And when I say more, I mean MORE. As I understand it, in 2012 we spent $104.3 billion on Federal corporate welfare and $14.4 billion on social welfare. And I know we have lots of multi-billion dollar corporations who not only pay NO taxes (GE, PG&E, DuPont,etc.) and received REFUNDS. A total of 30 corporations, including those I just listed, had a combined profit of over $160 billion from 2008-2010 and ALL 30 got refunds totaling almost $11 billion.
What would be so awful to at least address the loopholes as the House agreed to do before they agreed not to do.
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Geanie:
If I’m not mistaken, our government, both Federal and State spend more on Corporate Welfare than Social Welfare (not including SS and Medicare as I don’t consider those welfare).
A couple of points. First, the label is not important to me. Whether you want to call SS/Medicare welfare or not, they represent the same thing…redistribution of wealth from one set of people to another, so of course they should be included.
Second, while I am very much against disparate tax treatment of different people (which is why I oppose the progressive income tax that we have), I do not consider tax breaks to be the equivalent of direct wealth redistribution, so if you are including tax breaks among your corporate welfare numbers, I would dispute them.
What would be so awful to at least address the loopholes as the House agreed to do before they agreed not to do.
The R’s in the house were willing to close loopholes in exchange for lowering overall rates. Or at least keeping them the same. Not only did Obama not want to lower rates, he actually hiked them. It is rather disingenuous now for Dems to pretend that, in addressing loopholes, they are only asking for what R’s said they wanted to do in the first place.
For the record, I am all for revamping the entire tax code, eliminating all loopholes/deductions, both personal and corporate, and applying a simple, straight forward, easy to understand, single tax rate to everyone. Not only will such a code be far more just than our current code, but it will also reduce government costs related to the IRS.
What I am not for is raising rates on those who already pay the most, and then selectively closing the loopholes/deductions in order to screw those same people over even more. Which is what Obama and his comrades seem to want to do.
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I saw those at the time and it only confirmed my opinion. Restricted stock is typically granted based on staying for a predefined period of time and/or performance goals. The issue is that despite Citi’s BS argument about supporting non-profits and public service, the criteria is clear: Federal Government and/or an associated regulatory body. The 2008 letter that’s on page 4 confirms this: taking a job with the government causes all the restricted awards to vest, not be prorated.
Advancing Citi’s business interests in the Federal Government itself or the associated regulatory agencies merits a bonus from Citi just as if he was still working at the bank itself.
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And beyond all belief, the Republican senators are going to bring to a vote today a proposal to the power of the purse strings to the President.
Dear Senators Hatch and Lee:
Please vote yes. I promise I will blame all of the cuts on the President.
Thank you for your consideration, your constituent,
Michigoose
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President Obama should say yes while he can.
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jnc: Absolutely!
I don’t know that it will pass, but one can hope. Interestingly, for the wrong reason, Kelly Ayotte is one of the Senators holding out against it.
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Damn! I want more hawt blue on blue action! Lets see a Slate story on Woodwards sudden onset of senility. C’mon guys! I’m not gonna entertain myself. Sargent, what’s the latest from MM, er, your sources? Don’t tell me your big scoop was the Aqua Buddha scoop!
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Oh, Thank God!
http://www.salon.com/2013/02/27/heres_your_sugar_coated_satan_sandwich/
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There will be more revenue in the context of a deal that also includes cutting entitlements, most likely as part of the FY2014 budget process.
There won’t be more revenue to replace the existing spending cuts in the sequester.
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