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 | 1678.5 | -7.7 | -0.46% |
| Eurostoxx Index | 2818.5 | -7.1 | -0.25% |
| Oil (WTI) | 105.7 | -0.3 | -0.25% |
| LIBOR | 0.265 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 81.5 | 0.370 | 0.46% |
| 10 Year Govt Bond Yield | 2.58% | 0.00% | |
| Current Coupon Ginnie Mae TBA | 105 | 0.1 | |
| Current Coupon Fannie Mae TBA | 104 | 0.1 | |
| RPX Composite Real Estate Index | 200.7 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.31 |
Markets are weaker this morning after Japanese GDP came in lower than expected. There is no economic data this morning, but we will have a lot of it later this week. Bonds and MBS are up small on the risk-off trade.
This week will be relatively data-heavy, with inflation numbers (which matter again) and industrial data. We also get housing starts this week.
The Office of the Inspector General has releases a mid-point assessment of the HARP program. So far, 2.4 million borrowers have refinanced under HARP, while it has been estimated that 4 to 5 million were eligible. Overly-tight restrictions in the beginning account for the slow start. Also, the report cites a lack of awareness. FHFA intends to launch a nationwide public education campaign.
Separately, FHFA weighed in on eminent domain. They threaten to direct the agencies to restrict or cease business activities within the jurisdictions of any state or local authority that uses eminent domain to restructure mortgage loan contracts. SIFMA has already said that loans coming from such jurisdictions would be ineligible for TBA trading. Now FHFA is saying they are uninsurable. That should end the discussion on the use of eminent domain. Of course FHFA nominee Mel Watt has refused to take a stand on the use of eminent domain, which is another reason why he is a long shot to take over FHFA.
MBA reported that applications for new home purchases increased 14% compared to the previous month. This is not a seasonally adjusted number. MBA estimates that sales of new single family homes were running at a seasonally adjusted annual rate of 481,000 in July.
Filed under: Morning Report |
All Things in Moderation 
Watt may have to tell the Senate that he opposes eminent domain to seize mortgages in order to be confirmed. Is that what the implication is here?
I don’t see why he would not say that, unless telling the Senate your views on pending matters is considered inappropriate, by analogy to judicial appointment non-answers.
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Worth a read:
http://tinyurl.com/kjkywgs
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mark:
Worth a read:
This too.
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Scott, that critique is closer to my own personal opinion, which is that changes in undoc entry and egress have to do with relative economic circumstances, and that totally missed here is the effect NAFTA had on MX agriculture. It became cheaper for MX to import grain from the USA than to grow its own, thus punishing its own rurals population, who scrambled for the border. Now MX’s urban economy is stronger and the need to come all the way to the Rio Bravo is alleviated. Or so I think.
What the first guy said that I think is interesting is that the inflow is down to nearly none. I did not know that and still do not know if it is true but it is an assertion that caught my eye.
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With Watt it is more than eminent domain. Watt is a CRA guy, and Republicans want someone who cares about protecting the taxpayer…
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Having lived on the border for years there is no “militarization” and scattershot enforcement. There has been no serious attempt to halt illegal immigration. The money spent on the BP is wasted money designed to feather union nests. If we ever successfully regulate the border the governerships of Mexico would collapse.
Open borders / Instant citizenship.
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“Open borders + Instant citizenship.” subtract welfare state and you’re on.
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Forget Yellen or Summers; Senator Rand Paul wants Milton Friedman as the next head of the Fed:
Even I knew that.
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Still not as bad as FDR getting on the TV and telling everyone about the crash of 29
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They clipped the quote. Rand acknowledged he was dead before he floated the name.
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OrPresident Drone Strike’s 58 States, Big Tonsil/Big Foot Amputation and Gulf coast Ports like Jacksonville and Savannah.
We sure dodged a bullet with that Palin chick though.
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“Asked by Bloomberg’s Joshua Green who his ideal Fed chairman would be, the Kentucky senator said, “Hayek would be good, but he’s deceased.” Pressed by Green to name a living economist, Paul again named a dead Nobel Prize-winning libertarian, Milton Friedman. “Let’s just go with dead,” Paul explained, “because then you probably really wouldn’t have much of a functioning Federal Reserve.””
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To those that accepted Paul’s statement as an indication of smarts, do you now feel manipulated? If not, why not?
Open borders / instant citizenship. A secondary benefit would be a collapse of the welfare state. It’s unsustainable now so the sooner the collapse the better. Perhaps the added brain power from the human capital can come up with something better.
It’s win-win, no?
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Nova, I don’t really give Rand points for dodging the question. He could have picked one of the relatively hawkish Fed governors and also made an argument for eliminating the dual mandate even if conceding that getting rid of the Federal Reserve entirely was unlikely.
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That’s a tactical critique though.
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I should have gone to the original Bloomberg piece, NoVA. But I think it says something about the public perception of him that the quote I posted is being given credence.
BTW, re dog whistles. I totally believe you that you don’t hear them, even if Dezzie doesn’t. 🙂
I don’t think you’re old enough to–I recognize them because when I was growing up I was hearing adults around me use them. By the time you were growing up they were undoubtedly out of style. I’ve also lived in the deep South where they were more prevalent.
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“novahockey, on August 12, 2013 at 9:51 am said:
That’s a tactical critique though.”
His answers made him look unserious. That’s not how you gain leverage.
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Agree with JNC. These are the sorts of questions that Gary Johnson answers easily.
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“BTW, re dog whistles. I totally believe you that you don’t hear them, even if Dezzie doesn’t.”
Dog whistles have become the preferred way for progressives to write off arguments and public officials that they don’t wish to engage. Like everything else today, the only people who buy that argument are those who already agree with them.
What they have done is dilute the term racism from what it meant in the old Bull Connor days to now meaning anyone who questions entitlement spending. This will ultimately work against them as some marginal figures who should be called out will be able to write off any legitimate criticism under the “they call everyone racist” excuse.
Call it “The Progressive who cried Racism” syndrome.
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There’s no point in being an actual elected libertarian vs say a blogger if you don’t have any actual concrete answers to the governing questions that are put before you.
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An unforced error? I see what you’re getting at. I’ll have to think more on whether I think it was/wasn’t one.
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nova:
An unforced error? I see what you’re getting at. I’ll have to think more on whether I think it was/wasn’t one.
Rand has to be better than your average politician, or even your average presidential candidate, because the press is going to be hostile to him, and will go out of its way highlight any missteps. At this point he does not seem to be better than average.
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Back to immigration, this article critiques the hurdles foreign trained doctors face when trying to get licensed in the US.
This is what the AMA will use to extract the next round of Medicare/aid reimbursement increases. Keep the sugar teat flowing or we’ll demagogue the hell out of the horrors foreign trained doctors.
http://www.cepr.net/index.php/blogs/beat-the-press/protectionists-continue-to-control-us-trade-policy-the-case-of-foreign-physicians
I’ll admit watching hawt blue on blue action turns me on. Unfortunately this will cost us a fortune. I guess the sooner the collapse the better though.
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In my opinion, Stanley Greenberg is easily the best political issue pollster and focus group analyst around. His analysis of Americans’ attitude towards the economy strikes me as dead on:
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Re: Paul
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/09/wonkbook-rand-pauls-rough-interview/
looks like this was worse for paul, but not for hte reasons i thought
Re: the docs, it’s either import them, push care down to physician assistants and other less trained (though still qualified) providers, or get in line. I think it will be a combination. but not the lines though. that will be the line of demarcation between the haves/have nots.
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J,
Who actually believed that the depression ended? There has been no job growth but do those that have claimed it actually believe it? The anger comes from
Being lied to.
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“novahockey, on August 12, 2013 at 10:16 am said:
An unforced error? I see what you’re getting at. I’ll have to think more on whether I think it was/wasn’t one.”
I’ll double down here. It wasn’t a trick or gotcha question, but rather a straightforward one, i.e. “Who would you nominate for chairman of the Federal Reserve” and instead of giving a serious, thoughtful answer on an alternative nominee that he could have then segued into an attack on QE and the dual mandate, he instead made an joke of a response about dead economists without having the actual guts to flat out call for eliminating the Fed.
He just validated every PL critique of libertarians that we’ve ever had to endure.
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We’ll see who is stronger with the Democrats, the AMA or Democratic state legislatures.
My money’s on the AMA.
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JNC
That Greenberg piece matches what we hear from our customers, who are all small business owners, our friends (a lot of blue collar types and small business owners) and many family members.
I also read a piece last week about the increased number of young college grads moving back in with their parents. Lots of postponement in getting started. These issues will all have long term effects on both our economy and society as a whole, IMO. I don’t see any improvement down the pipe line.
It sounds to me as though some people are actually rooting for the failure of government to provide a safety net as though that will actually improve the situation. I’d be interested in finding out how they think that will actually work.
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Another softball question that Paul flubbed:
“A recent article in the New Republic said your budget would eviscerate the departments of Energy, State, Commerce, EPA, FDA, Education, and many others. Would Americans support that?”
That’s easily answered with an argument on consolidating cabinet agencies. He can even quote Obama on how many departments are involved in the regulation of salmon.
And Ezra is dead on right about this:
“Perhaps these are good ideas! But Paul doesn’t defend them. He obscures them.”
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JNC — i think you might be right.
and i think i didn’t want to see it.
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It’s what happens when you go straight to varsity and skip the JV league.
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hey, that’s my line!
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It sounds to me as though some people are actually rooting for the failure of government to provide a safety net as though that will actually improve the situation. I’d be interested in finding out how they think that will actually work.
Governments inevitably fail. It’s what comes after that’s important. I’m focused on long term outcomes, isn’t that what’s important?
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I’m 47. I’d like the inevitable collapse sooner rather than later. I’m a scrounger, will I still be able at 70? Doubt it.
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lmsinca, I’d recommend reading the whole piece. They note that the debate doesn’t automatically favor the Democrats, especially on the deficit and short term spending proposals:
“But these trends have given way to something new altogether that will require a big national reckoning. Now, working people are beginning to see this squeeze as something permanent, rooted in the character of jobs. The way they live, plan for the future, and talk about finances has shifted. They have permanently downsized their expectations for what they get from the economy and permanently upsized their expectations about what they must put into it to reap these reduced gains. When they talk about solutions, as a result, they are not looking for temporary half-measures to momentarily boost the economy. They are very thoughtful and totally focused on the long-term. They think hard and debate what will be the best long-term solutions for themselves, their families, and the whole country.”
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Jnc, I wasn’t assuming the debate automatically favors the Democrats, I was only reiterating the mood of the public, their expectations and struggles.
As always there are numerous debates ongoing re the cause, the effect and the solution. I don’t think there is a simple answer.
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That should end the discussion on the use of eminent domain
Not so fast.
The threat that mortgage companies would either forbid the financing of homes or raise the interest rate to prohibitive levels in communities that use eminent domain has so far caused other localities to back off of similar plans. However, Richmond (CA) Mayor Gayle McLaughlin will not be dissuaded from this path. After the companies’ lawsuit was filed, she said:
“We feel strongly that we’re on legal ground. We’re not afraid of going into the courtroom. We believe our legal reasoning will prevail.”
While the Wall Street corporations are trying to argue that this use of eminent domain is not for the good of the whole community, but rather the gain of specific individuals, the benefits to the community are clear. Among other things, stopping foreclosures would allow property values to rise and would stop a drain of the tax base.
John Vlahoplus, an officer for MRP, addressed the threat presented by the FHFA, saying:
“The FHFA was created to be independent of the mortgage industry that it regulates. But instead it has been in bed with the mortgage industry for over a year to oppose this solution to the mortgage crisis.”
Read more: http://www.addictinginfo.org/2013/08/12/little-city-uses-eminent-domain-to-rescue-homeowners-while-wall-street-freaks-out/#ixzz2bmdvMu5s
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Does anybody take this website seriously?
http://thinkprogress.org/immigration/2013/08/11/2449021/maine-machines-pick-blueberries/
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Well, she would be cutting off her nose to spite her face. 90% of all mortgages today are government guaranteed. What will it do for real estate prices if no one can get a mortgage in Richmond, CA?
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Also, since the FHFA is a government agency that’s the receiver for Freddie and Fannie, they can probably sue in Federal court and win on a preemption argument.
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It’s a small community, maybe the banks are interested, I don’t really know. I just thought it was interesting that one town is resisting the pressure to conform to Wall Street’s rules.
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Krugman’s latest conceit which I believe has him totally unmoored:
Real numbers don’t do what he wants, so he’ll just use a make believe number (“potential” GDP) produced by his models to confirm what his models were telling him.
http://krugman.blogs.nytimes.com/2013/08/12/permanent-stimulus/
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Not using eminent domain isn’t “Wall Street’s rules”. How would you feel if the city seized the house you were renting out to prevent someone from being evicted?
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Note also that this isn’t just being done to benefit the homeowners, but rather to transfer the profits from the mortgage from one private party to another.
The tax bill consideration will be interesting as well:
“The Internal Revenue Service usually treats debt forgiveness as taxable income. What happens if this innovative financing plan triggers a tax bill of tens of thousands of dollars for the homeowner?”
http://www.bloomberg.com/news/2013-08-09/stupid-scheme-on-eminent-domain-meets-predictable-fate.html
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How would you feel if the city seized the house you were renting out to prevent someone from being evicted?
Except that’s not what they’re doing. I’ve never been a big fan of eminent domain but I think this is more interesting than usual. Nothing else has worked except just waiting out the housing market’s return to profitability. An awful lot of lives were ruined along the way. I’m sure it won’t fly though.
It’s not Wall Street? Are you sure about that?
On Wednesday, mortgage-bond trustees from Wall Street companies filed a lawsuit in federal court against the city of Richmond to try and halt the process. In a laughable statement, a lawyer for some of the mortgage investors, John Ertman, wrote in an email:
“Mortgage Resolution Partners (MRP) is threatening to seriously harm average Americans, including public pension members, other retirees and individual savers through a brazen scheme to abuse government powers for its own profit.”
Apparently, ‘brazen schemes to abuse government powers for profit’ are the sole province of Wall Street–in Ertman’s not-so-humble opinion.
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Yes they are. They are seizing a mortgage that one bank owns and giving it to a hedge fund.
It’s theft, pure and simple.
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I’m sure you, brent and bloomberg are correct though…………..it’s a stupid idea that will never work. Grasping at straws in pure Don Quixote fashion.
Giving the banks fair market value for the loans will never work.
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The proper solution is bankruptcy cramdown where the mortgage holder gets a day in court. This is pure theft. There’s no “public purpose” in shafting one private party for the benefit of another. It’s just like Kelo where they stole people’s houses to give to a pharmaceutical company.
Besides, if a homeowner is current on their payments, there’s even less of a reason to seize the mortgage. No one has a constitutional right to a specific interest rate or to refinance.
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Worth noting:
“Greece’s Surplus Opens Door to Default
By Megan McArdle 2013-08-12T18:22:50Z
Greece has a primary surplus for the first time in, well, a very long time. The budget, mind you, is still in deficit, after social security payments, interest on the debt, and payments to local government. Nonetheless, this is a major achievement. Greece may still be borrowing to fund its debt payments, but at least it’s not also borrowing to fund new spending. ”
http://www.bloomberg.com/news/2013-08-12/greece-s-surplus-opens-door-to-default.html
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jnc:
Call it “The Progressive who cried Racism” syndrome.
I’ll agree with you that that card is being played more than it should. But sometimes a dog whistle is, indeed, a dog whistle. A perfect example was the “Obama clown” at the Missouri State Fair when the other clown ran over to him and flapped the lips on the mask up and down. I can’t tell you how many times when I was growing up when I heard an adult say “that boy’s got flappy lips” to indicate that somebody was black.
I got to hear more slurs than I can think of about both blacks (my mom’s main prejudice) and hispanics (my dad’s).
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The proper solution is bankruptcy cramdown where the mortgage holder gets a day in court.
Another dream. At least it’s one of the things we agree on. I can see you really hate the eminent domain idea. I’m sure it’s a bad idea for all the reasons you’ve stated. The only people who can pay for the losses incurred because of a hyper inflated housing bubble are the poor people who stuck their necks out buying a home and the other poor suckers who bought the bundled mess. Although it looks like some of them are winning court cases at least.
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Whenever a private party is involved as a beneficiary in eminent domain (i.e. when it’s not going to a school or a road), then it’s pure corruption and theft.
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kelo background, it’s always nice to read again for just how awful it is.
http://en.wikipedia.org/wiki/Kelo_v._City_of_New_London
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“Giving the banks fair market value for the loans will never work.”
The only way this scheme works is if the banks get an unfair value. Otherwise the hedge fund can’t make money on it.
Here is how it works. Say there is a $200,000 mortgage on a house worth $100,000. The borrower is currently paying the mortgage. The bank probably is carrying it at close to $200,000 because the loan is not delinquent. The city would use eminent domain to take the loan from the bank, sell it to a hedge fund who would forgive the principal down to the value of the house ($100k) and refinance and sell the loan for a markup in the primary market (probably $104,000 or so. The hedge fund and the city would split the profits.
To enable the hedge fund to make a return (2% isn’t going to cut it), the bid will have to be closer to $90,000 to make it worth the hedge fund’s while. So the bank is going to get $90,000 for a $200,000 loan that is current. There is no way that price is “fair.”
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What percentage of underwater homeowners were conned into their loans?
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oh, all of them… by definition…
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Ezra channels my view of recent history:
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lms: Isn’t Richmond the city that’s right next to the Chevron oil refinery that spewed toxic waste all over the city last year when it caught on fire?
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Water’s wet! Who knew?
http://m.washingtonpost.com/blogs/wonkblog/wp/2013/08/11/farms-are-gigantic-now-even-the-family-owned-ones/
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@PhilipRucker: Hillary Clinton announces series of major speeches this fall on restoring faith in government. Voting rights today, natl security next.
Is this an acknowledgement that President Obama has ruined it?
Wasn’t the government organized around the idea that one should put as little faith in government as possible? Checks and Balances do that each Branch can watch the others and thwart their inevitable attempts at increasing their power? Or, should we just have faith that no matter what government does is ok?
Finally, what does Obama view as a legitimate check on his power?
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Michi, yep, the same Richmond and the fire was almost exactly one year ago. I read somewhere they’re suing Chevron. My impression is it’s one of those oil towns like Midland, TX. 90% living in poverty and 10% living off the oil industry. The 90% serve the 10%. Lots of small towns like that. I’ve never been there so as I said, that’s the impression I got last year when I read about the refinery fire.
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Hopefully NSA isn’t reading but it was actually a little dicey getting our niece’s ashes to Africa. Our daughter talked her way into it by saying she always carried them with her in a prescription bottle and that was that………….haha. Our niece is resting peacefully among the big cats today.
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http://www.bls.gov/eag/eag.tx_midland_msa.htm
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Our niece is resting peacefully among the big cats today.
Nice! And smart of your daughter.
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Michi, everyone in the family is thrilled. She was a zoologist planning on attending graduate school in the fall of 2008. She was working at the zoo in Albuquerque when she died. Her room here was lined with photos of cats.
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FYI…in order to avoid stepping on Brent’s Morning Report, starting tomorrow I will schedule the daily history post for noon est.
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I will schedule the daily history post for noon est
We’ll be expecting you. . .
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