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 | 1625.3 | 0.7 | 0.04% |
| Eurostoxx Index | 2780.9 | 7.8 | 0.28% |
| Oil (WTI) | 94.53 | -1.9 | -1.93% |
| LIBOR | 0.275 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 83.03 | 0.240 | 0.29% |
| 10 Year Govt Bond Yield | 1.84% | 0.03% | |
| Current Coupon Ginnie Mae TBA | 105.9 | 0.0 | |
| Current Coupon Fannie Mae TBA | 103.5 | -0.1 | |
| RPX Composite Real Estate Index | 195.8 | 0.8 | |
| BankRate 30 Year Fixed Rate Mortgage | 3.52 |
Markets are flattish this morning on no real news. We will get the monthly budget statement at 2:00 pm this afternoon. Bonds and MBS continue to sell off, and the 10 year is at 1.84%
The Mortgage Bankers Association reported that 90 day delinquencies ticked up to 7.25% in Q1 from 7.09% in Q4. Separately, foreclosures as a percent of total mortgages fell to 3.55% from 3.74%. This is still an elevated numbers; prior to the bubble, foreclosures were in a 1% to 1.5% range. Similarly, with delinquencies, pre-bubble the typical 90 day delinquency rate was in the 4% to 5% range. It peaked at just over 10% in Q1 2010.
Fannie and Freddie’s profits have moved the debt ceiling limit to September from August. Treasury Secretary Jack Lew said that the statutory debt limit will be reached in a few days, but that there are measures the government can take to shift around funds and that we won’t really start having issues until after Labor Day. Republicans have proposed a prioritization of creditors, which will go nowhere in the Democratically controlled Senate. My question: How much of the interest owed is going to the Fed due to quantitative easing? They have been buying up 90% of Treasury issuance. And since the Fed’s profits and losses are just sent right back to Treasury, isn’t that just money we effectively owe ourselves?
Anyway, the debt ceiling debate is coming up this summer and the Administration and House Republicans are sure to butt heads over raising the debt ceiling. The Administration will not accept spending cuts without tax increases and the House will not accept tax increases at all. Just saying, since the S&P 500 has been a one-way bet since last Fall. There are two exits at the front of the plane and two exits over the wings. Please take a moment to locate the nearest exit, and remember that your nearest exit may be behind you.
Philly Fed President Charles Plosser is skeptical that Dodd Frank can end Too Big To Fail (TBTF). He proposes a more systematic process, in which the ultimate decision-making would be rest with a judge and and deviations from priority would be cleared through a judicial authority and not through regulatory discretion. Derivatives and repos would be treated like other claims. Separately, he is skeptical that QEIII is going to do much good. It would be refreshing to have someone on the hawkish side replace Bernake after having doves for the past 25 years, but we’re probably going to get an even bigger dove in Yellen.
Filed under: Uncategorized |
All Things in Moderation 
“Republicans have proposed a prioritization of creditors, which will go nowhere in the Democratically controlled Senate.”
They’ve actually amended this in April. Now it’s a selective increase in the debt ceiling to pay interest to bondholders and to fund Social Security
http://thehill.com/blogs/floor-action/house/297401-gop-to-move-new-version-of-debt-ceiling-contingency-bill-next-week
Also as an example of media bias the NYT article notes the Democratic nickname for the bill, “Pay China First Act” but doesn’t bother to disclose the actual name of the bill (Full Faith and Credit Act) or it’s number (H.R. 807) so interested readers could look it up themselves.
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New Steve Pearlstein piece:
“Meet Dylan, the day trader
By Steven Pearlstein, Friday, May 10, 10:42 AM”
http://www.washingtonpost.com/business/meet-dylan-the-daytrader/2013/05/09/00786200-b5d6-11e2-b94c-b684dda07add_story.html
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Cute
http://bigstory.ap.org/article/irs-apologizes-targeting-conservative-groups
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Meh, just a buncha crazy baggers. It’s not like they were important and legit, like OWS.
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I’m out of town for a few days.
I’ll be having the turf and turf in Vegas thus weekend on a guys trip.
Chaperoned 20 3-year-olds to the zoo today. We managed only one missing kid. Just bolted from his mom who didn’t notice. Found him in about 5 minutes but lord what a nightmare. Nothing like today to make Vegas seem tame. Catch you all next week.
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Tweet of the day:
@billhobbs: Week begins w/Obama scoffing at notion tyranny is a threat, ends with IRS admitting it intentionally targeted Obama’s opponents.
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In light of above, who isn’t reassured by this?
http://www.cnbc.com/id/100711119
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Hmmmmm
http://www.wired.com/threatlevel/2013/05/immigration-reform-dossiers/
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True?
http://www.thedailybeast.com/articles/2013/05/10/how-could-the-gop-have-improved-obamacare.html
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From the files of immensely stupid ideas, the WaPo comes up with a doozy.
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George, I don’t know whether it is true, at all, but it is a thought provoking take, so thanks for linking. JNC, thanks for the Pearlstein. He is having more fun now, obviously. Scott, I did not read past the link’s title b/c I just couldn’t imagine wasting the time.
I think this is a good NYT widget on foreign nations lobbying the immigration bill:
http://tinyurl.com/cnwk4jh
Again, very nice NYT widget.
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Scott,
I think Nixon had the same idea. Another reason he was a disaster for the country.
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You’re wrong Douhat, we’re fucking fascisti!
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Hell Freezes Over:
“The Mellowing of Maxine Waters
By BEN PROTESS
Since becoming the top Democrat on the House Financial Services Committee, Representative Maxine Waters has softened her tone and vowed to protect bankers’ interests. ”
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Well,she did get a bailout for a bank her husband had invested in, so…
Again, what value has FDIC and bank regulation provided? I mean besides the opportunities for graft? Or, was/is that the intent?
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Again, what value has FDIC and bank regulation provided? I mean besides the opportunities for graft?
It has protected the general public from hundreds, perhaps thousands, of bank failures. In doing so with fees from the banks it has lowered individual bank profits or return to depositors or both, at the gross level, but has kept a floor under the Main Street economy in bad times. Lower ceiling, higher floor, more stability.
Or so I think.
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Mark, but we have had thousands of bank failures.
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Along with the gross cost of the depositer bailouts has come the loss of the vigilance of the consumer and the absurd reliance on the government. That damage has, I think, led to a national debt that is unplayable, a welfare state unsustainable and the significant suffering that is going to come. I find arguements that the so-called economic stability of the last 1/2 of the 20th century to be in any way attributable to FDIC and bank regulation to be very unpersuasive. The stability came from the destruction of the world’s manufacturing base except ours.
A lot of that base has now been rebuilt and the restrictions on the free flow of capital, the utter debasement of our currency and the idiotic restrictions on human capital that could have come here are why we are where we are.
That, to me, was/is a shitty trade off.
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That damage has, I think, led to a national debt that is unplayable,
I do not see any relationship between FDIC and the national debt.
I se a direct relationship to WW2, Korea, ‘Nam, Iraq 1, Iraq 2, and AFG. I see a direct relationship to the War on Drugs. I see a direct relationship to the Cold War. I see a direct relationship to Medicaid.
Mark, but we have had thousands of bank failures.
Exactly, George, with little dislocation to the local economies every single time. FDIC hasn’t saved banks, it has saved the public. It gave a reorganization mode for failed banks that works almost automatically, without the bankruptcy process. It assured the public. It saved our deposits.
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Mark,
I’m saying the gross cost in consumer ignorance and increased reliance on government has caused the problems and that there had been, prior to the FDIC, failure with little dislocation. Finally, i would take issue with calling our current economic situation non-problematic considering the fact that we have had massive restrictions/regulations on banks and capital. Why is it so severe if we have all this regulation? My arguement is that the regulation isn’t about preventing problems or even minimizing them but about power and graft.
Again, the economic growth we experienced in the latter half of the 20th century occurred due to the destruction of the physical and human capital of the rest of the world, not because of governmtal regulation. We are now seeing the negative effects of that regulation on capital and on human capital.
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You take increased reliance on government not only as a given, but as a deficit inducing model, I think. First, I am not so sure it is a given, but assuming arguendo that it is, the one deficit area of significance from it is Medicaid. Now if you think that being forced to prepay for Medicare and SS is near theft b/c it is not voluntary to the individual then I would concede in that world view reliance is a given. But those programs have not increased deficits [although they arguably will having been treated like a piggy bank]. Medicaid has contributed to deficits and it gets bigeer. But war and preparing for war and the more than trillion we have spent on “the war on drugs” are the biggies. I suppose you could separate out the VA and say that is dependency on gov too, but I think of it as a cost of defense.
In either case, I would argue that the existence of the FDIC has not fostered any sense of dependency but has fostered trust in the private banking system. Period.
You must have some specific idea about graft associated with FDIC of which I am not aware, btw.
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mark:
Now if you think that being forced to prepay for Medicare and SS…
Medicare and SS are not “pre-pay” programs, and I think you would have a difficult time substantiating that these programs operate as “prepay”. My own analysis suggests that the average person most definitely takes more out of SS than they put in. I know Ezra Klein claims that people are not taking out more than they paid in, but as I pointed out back when you first introduced this idea, Ezra bases his conclusions on inflation adjusted numbers, which makes no sense. Inflation destroys savings, it doesn’t increase it.
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Mark, the storage of ones money is undoubtably the most important consumer decision there is. To turn over the research and evaluation of said storage facility is to very grave, long term, to the idea of limited government and self reliance.
Are you saying that there is no graft and corruption among banks and their regulators?
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Are you saying that there is no graft and corruption among banks and their regulators?
My only dealing with them was in the ’87-’90 time frame. Never caught a whiff of corruption. Might have been there. I didn’t see it. That is why I asked you about it.
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