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 | 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.
Filed under: Morning Report |
All Things in Moderation 
an earnings miss from Wal Mart
That targeted DC minimum wage hike is taking its toll already.
LikeLike
They are blaming the tax hikes at the beginning of the year..
LikeLike
They are blaming the tax hikes at the beginning of the year.
The ultra-wealthy who got their hair cut with Obama’s job killing tax increase on those making more that $500k a year are now having to get their school supplies at dollar store?
Or perhaps the FICA holiday should have been extended a little longer?
LikeLike
yello:
The ultra-wealthy who got their hair cut with Obama’s job killing tax increase on those making more that $500k
He raised taxes on those making more than $200k.
LikeLike
He raised taxes on
thoseindividuals making more than $200k and couples making more than $250k.Source:http://www.taxpolicycenter.org/taxtopics/2013-Allow-top-two-rates-to-rise.cfm
Fixed that for you. But thanks for the clarification.
Still not a big component of WalMart’s market demographic.
LikeLike
expiration of the payroll tax holiday? I noticed it.
[corked.]
LikeLike
Goldman taking down 3Q GDP estimate to 1.9% based on today’s numbers…
LikeLike
plus the new obamacare taxes and the phenomenon of shifting to part time work in response to obamacare probably isn’t helping either.
LikeLike
Taxes are now the most progressive since 1979. There’s a small group who are stuck paying the bills for his entire agenda.
Shared sacrifice, i.e. we are all in this together, this is not.
LikeLike
“Still not a big component of WalMart’s market demographic.”
Probably a big component of those who employ Walmart’s demographic though…
LikeLike
Also Yellow & Scott you are both mistaken. That site links to his original proposal for $200k. The actual deal that was signed was $400k for individuals and $450 k for married, filing jointly if I remember correctly.
The rest of the taxes are from the PPACA that kicked in at the same time.
Edit: Actually Scott’s right because they also have the phase out of certain deductions above $200k even though the marginal rate stated the same so it’s a net tax hike on those people as well.
LikeLike
The actual deal that was signed was $400k for individuals and $450 k for married, filing jointly if I remember correctly.
That rings a bell. In which case I came closer. The actual deal seems to be nearly un-Google-able as all I got were partisan sites haranguing over various trial balloons rather than what actually passed. The signal to noise ratio on the internet over tax policy is abysmal.
LikeLike
the phenomenon of shifting to part time work in response to obamacare
Is this a real trend or just posturing on the part of a few vocal Obamacare opponents (Darden Restaurants, et. al.)? If so, why would they be jumping the gun like this when the mandates haven’t kicked in yet. Sounds to me like rationalizing practices they had already decided on for other purposes.
I have no sympathy for firms trying to weasel out through loopholes if their competitors comply in good faith. Perhaps the metric for compliance should be FTEs based on total hours paid rather than a binary part-time/full-time head count. The former would encourage companies to make full-time workers work more overtime since health care costs are fixed per-employee.
This part-time publicity debacle is actually a strong argument for single-payer through a payroll tax/allownce (i.e. Medicare for everyone), perhaps with a fixed cap based on either salary or hours worked, since then there is no disincentive towards full-time employees.
LikeLike
“If so, why would they be jumping the gun like this when the mandates haven’t kicked in yet.”
They announced the plans before the delay was announced and decided it was better to take the PR hit once rather than have to do it again next year.
“I have no sympathy for firms trying to weasel out through loopholes if their competitors comply in good faith.”
These aren’t loopholes. It’s the core structure of the law’s requirements.
“This part-time publicity debacle is actually a strong argument for single-payer “
No, it’s a strong argument to get rid of employer healthcare entirely and move everyone to the exchanges.
LikeLike
No, it’s not. You can find it:
http://en.wikipedia.org/wiki/United_States_fiscal_cliff
http://www.heritage.org/research/reports/2013/01/fiscal-cliff-deal-how-it-will-affect-taxpayers-and-the-economy
Also, Scott was right in that they did the phase out of deductions above $200k as a back door tax increase.
Edit: Opps, wrong again. Phase out starts at $250,000 for single and $300,000 for married filing jointly.
http://economy.money.cnn.com/2013/01/02/taxes-fiscal-cliff/
LikeLike
You can find it
Your Google-fu is stronger than mine. My statement about S/N stands.
LikeLike
“Is this a real trend or just posturing on the part of a few vocal Obamacare ”
It’s real. the IRS is drafting a rule to address it. details are more rumor at this point, but it’s along the lines of “we see you have 100 part time employees. we’re going to consider that 50 full time. so you’re subject to the mandate.”
LikeLike
excellent article:
http://reason.com/archives/2013/08/14/the-end-of-policy
LikeLike
“weasel out through loopholes”
it’s not a loophole. bad policy is not a loophole.
LikeLike
It’s the core structure of the law’s requirements.
It’s still to be seen how galling the unintended consequences will be. I expect a lot of crocodile tears from companies ‘forced’ to cut hours when the were dying for an excuse to anyways. Offering only part time jobs with no benefits would put a company at a disadvantage in the labor pool. But as banned/john likes to point out on PL all the time, WalMart is the employer of last resort. Much like how it is the shopping choice of last resort to me.
LikeLike
Nova, doesn’t that contradict the black letter of the actual statute?
LikeLike
yes. but like that matters. give me a sec and i’ll pull it.
LikeLike
It does when it gets to the Roberts court.
LikeLike
It’s real. the IRS is drafting a rule to address it. details are more rumor at this point, but it’s along the lines of “we see you have 100 part time employees. we’re going to consider that 50 full time. so you’re subject to the mandate.”
Buy NCR
LikeLike
“we see you have 100 part time employees. we’re going to consider that 50 full time. so you’re subject to the mandate.”
Which approaches my FTE suggestion. And I would expect lots of howls about Obama enacting laws unilaterally.
LikeLike
http://www.law.cornell.edu/uscode/text/26/4980H
well, maybe there are on more solid ground. see (E) Full-time equivalents treated as full-time employees
LikeLike
Bingo.
LikeLike
so it’s looks like i was wrong.
but it’s still not that straigtfoward. and it still doesnt’ mean that it’s not happening. so great. bad news. we’re cutting you hours, good news you’ll be offered a health plan.
LikeLike
so I guess the trick is keeping your total man hours in an month below the threshold.
LikeLike
so I guess the trick is keeping your total man in an month below the threshold.
Look for every single branch location to become a separately incorporated entity with 49 or fewer FTEs. I bet labor outsourcing firms will find some clever gimmicks for their customers as well. All this will keep labor lawyers busy for decades.
LikeLike
“good news you’ll be offered a health plan.”
No, they’ll pay the fine. It’s cheaper than the plan.
LikeLike
“novahockey, on August 15, 2013 at 9:53 am said:
so I guess the trick is keeping your total man hours in an month below the threshold.”
This sounds like a job for some consultants.
LikeLike
It does when it gets to the Roberts court.
At heart, Obamacare is about power. The question before the court was whether we ‘re subjects or citizens. Roberts provided the answer.
LikeLike
either way, i apologize for the error.
i’d imagine if you’re on the cusp, you run the numbers to figure out if staying open or closing for a day or two make more sense.
LikeLike
The question before the court was whether we ‘re subjects or citizens.
OMG. Histrionic much? Why was Robert’s decision the final straw on this divide?
LikeLike
If the statute reads as Yellow is quoting, then the IRS is on firm ground.
LikeLike
Nova, did they issue a regulation on the multiple location issue yet?
LikeLike
Nova, did they issue a regulation on the multiple location issue yet?
Fifty employees is already a threshold for compliance with lots of laws. Family leave comes to mind. How are multiple locations handled under these laws?
LikeLike
Goldman taking down 3Q GDP estimate to 1.9%
From what? How big of a hit was it?
Related: We need a new term for a sputtering recovery which doesn’t seem to outpace population growth. Has GDP per capita been growing or falling? If the latter, it sure seems to deserve some more nuanced term to describe it. Perhaps Krugman can coin one for us.
LikeLike
Nope, started here.
http://en.m.wikipedia.org/wiki/Wickard_v._Filburn
Name a limit on Federal power that cannot be circumvented? I can’t.
LikeLike
that might be in statute too. and this is what was supposed one of serveral to be in addressed in the regs, but got caught up when they punted.
it’s really taking the worst of everything and expanding it. single payer makes more sense. and you know my thoughts on that.
LikeLike
it’s really taking the worst of everything and expanding it.
Employer based health care is what mucks up the system. It should all be individually purchased (with vouchers or credits or allowances or whatever you need to approach universal coverage) or it should all be single-payer, either Canadian or NHS style.
LikeLike
“Name a limit on Federal power that cannot be circumvented? I can’t.”
alternative question — are there effectively any limits left?
LikeLike
Related: We need a new term for a sputtering recovery which doesn’t seem to outpace population growth. Has GDP per capita been growing or falling? If the latter, it sure seems to deserve some more nuanced term to describe it. Perhaps Krugman can coin one for us.
They do, it’s called bouncing along the bottom.
LikeLike
“Related: We need a new term for a sputtering recovery which doesn’t seem to outpace population growth.”
There already is one: “The New Normal”
LikeLike
A little late with the history post…sorry.
LikeLike