This day in history – August 15

Posted on August 15, 2013 by ScottC

1989 – In his 2nd start following treatment for a cancerous tumor in his pitching arm, Dave Dravecky of the league leading San Fransisco Giants breaks his arm while throwing a pitch to Tim Raines. Dravecky later retires from baseball after breaking his arm a second time during the Giants celebration following their pennant clinching victory, and will eventually have his left arm and shoulder entirely amputated. He is currently an author and motivational speaker. (The video of the break is out there, but it is included with some other gruesome injuries you probably don’t want to see.)

1979 – Francis Ford Coppola’s Apocalypse Now is released in theaters. Beset by all kinds of production problems including a change in the lead after one week of shooting (Harvey Keital as Willard was quickly dropped by Coppola), a heart attack in mid-film (Martin Sheen), unprepared starring actors (an overweight Marlon Brando ad libbed most of his role since he didn’t know his lines), and weather problems (a typhoon destroyed several of the sets), production costs soared and the release date was postponed several times. Coppola himself suffered a nervous breakdown. Still, the film was met with critical acclaim and garnered 6 Academy Award nominations, winning for Best Cinematography and Best Sound. Coppola later released a documentary of the making of the film, taken largely from home movies filmed by his wife, called Hearts of Darkness: A Filmmaker’s Apocalypse.

1969 – The Woodstock Music and Art Festival, advertised as “3 days of peace and music”, opens on the grounds of Max Yasgur’s dairy farm in Bethel, New York on Friday, August 15. Although Bethel permit authorities are told to expect no more than 50,000 people, some 186,000 tickets are sold prior to the event. Unable to manage security for the expected numbers, the events organizers decide at the last minute to open the gates for free admittance, and at its peak about 400,000 people are in attendance. Thirty three different bands are scheduled to appear, including some of the top performers of the day such as Arlo Guthrie, Joan Baez, The Grateful Dead, Janis Joplin, The Who, Jefferson Airplane, and CSN&Y. The concert becomes a defining event of the 1960’s and the decade’s youth culture. The final act, former army paratropper Jimi Hendrix, finished up Monday morning and included this now historic nod to his country.

1945 – Japan’s Emperor Hirohito takes to the radio for the first time ever and announces Japan’s unconditional surrender. This is the first time his voice has ever been heard by the vast majority of Japanese citizens. Noting that “the enemy has begun to employ a new and most cruel bomb, the power of which to do damage is, indeed, incalculable”, the Emperor says that “Should we continue to fight, it would not only result in an ultimate collapse and obliteration of the Japanese nation, but also it would lead to the total extinction of human civilization.” Although Japan’s official surrender will not be signed until early September, August 14-15 (US/Japan time zones) is generally accepted as V-J Day.

1914 – After 30 years of of digging, first by the French and later by the US, the Panama Canal is officially opened to commercial traffic, cutting the time it takes ships to travel from the Atlantic Ocean to the Pacific Ocean in half. While the canal was originally completed and owned by the United States, it reverted back to Panamanian control in 1999. Interestingly, owing to the geography of Panama, traveling through the canal from the Atlantic to the Pacific will have one traveling eastward, not westward.
panama

Famous Birthdays – Napoleon Bonaparte (1769), T.E. Lawrence (1888), Julia Child (1912), Ben Affleck (1972)

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Morning Report – Data Dump 8/15/13

Posted on August 15, 2013 by Brent Nyitray

Vital Statistics:

 

  Last Change Percent
S&P Futures  1668.2 -13.8 -0.82%
Eurostoxx Index 2833.0 -19.1 -0.67%
Oil (WTI) 107.2 0.3 0.28%
LIBOR 0.263 0.000 0.00%
US Dollar Index (DXY) 81.74 0.032 0.04%
10 Year Govt Bond Yield 2.78% 0.07%  
Current Coupon Ginnie Mae TBA 104 -0.4  
Current Coupon Fannie Mae TBA 103 -0.4  
RPX Composite Real Estate Index 200.7 -0.2  
BankRate 30 Year Fixed Rate Mortgage 4.39    

 

Somebody beat the tape with the ugly stick this morning, with stock index futures and bonds both down sharply. For stocks, an earnings miss from Wal Mart and yet another restructuring out of Cisco Systems are feeding the negativity. On the bond side, stronger data has driven the 10 year yield out of its recent 2.57% – 2.74% trading range.
 
Let’s run through the economic data:
  • Initial Jobless Claims 320k vs 335k expected
  • Empire Manufacturing 8.24 vs 10 expected
  • Consumer Price Index + .2% in line with expectations
  • Industrial Production flat vs expectations of a .3% increase
  • Capacity Utilization 77.6% vs 77.9% expected
  • Bloomberg Consumer Comfort Index -26.6, first decline in a while
  • NAHB Homebuilder Sentiment Index rose to 59 from 57
  • Philly Fed 9.3 vs expectations of 19.8
So overall, a mixed bag of data. Initial Jobless Claims were the best news (lowest in 6 years), while the drop in capacity utilization is an ominous sign.
 
The latest CoreLogic Market Pulse is out. While everyone knows that rising rates have more or less killed the refi market, they estimate that 29% of borrowers are in the money to refinance – meaning that the savings will cover the up-front fees to refi. So, that is still a good chunk of people. If Obama does HARP 3.0 and extends the dates , then another refi wave is on the way. 
 
Mortgage debt has fallen $91 billion over the past quarter, and HELOCs fell by $12 billion. Non-housing debt rose. Overall household debt fell by .7% to $11.15 trillion. The Great American Deleveraging Continues…
 
FBR analyst Edward Mills is predicting that regulators will release new draft rules concerning mortgage secuiritzations, including the removal of down payment requirements for QRMs and premium capture cash reserve accounts. The original proposal was to require 20% down in order to release the securitizer from “skin in the game” holdings. (non-QRM MBS would require the issuer to hold 5% risk retention). Consumer Groups opposed the rule because it will restrict credit. Also they are ditching the Premium Capture Cash Reserve Accounts, which mandated that any securitization gain on sale could not be touched until the security no longer exists. The government right now is backing 90% of all newly issued mortgages and they finally figured out that regulatory overreach was preventing that number from dropping. 
 
The long-awaited foreclosure wave that dates back to the beginning of the crisis is finally starting to happen. Foreclosures increased 3x in Baltimore. This is due to all of the foreclosure prevention actions taken by state and local governments are finally winding down. New York State is legendary for how long you can go without making a mortgage payment. Of course this is why prices are rocketing on the West Coast and they are modestly increasing on the East Coast. Maybe politicians and regulators finally figured out that all of the foreclosure restrictions they put on banks were having the effect of depressing prices, instead of supporting them, as they had hoped. 

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