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 | 1680.6 | -2.5 | -0.15% |
| Eurostoxx Index | 2911.4 | -6.9 | -0.24% |
| Oil (WTI) | 103.8 | -0.3 | -0.26% |
| LIBOR | 0.243 | -0.002 | -0.61% |
| US Dollar Index (DXY) | 79.89 | -0.012 | -0.02% |
| 10 Year Govt Bond Yield | 2.62% | 0.01% | |
| Current Coupon Ginnie Mae TBA | 105.4 | 0.1 | |
| Current Coupon Fannie Mae TBA | 104.9 | -0.1 | |
| RPX Composite Real Estate Index | 200.7 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.27 |
Sorry some of this is going to be really “inside baseball” for people in the mortgage business…
Day 3 of the government shutdown. Markets are sanguine. Stocks are down small and bonds / MBS are flat.
Initial Jobless Claims came in at 308k, better than expected. Challenger Job Cuts increased 19% as the financial sector continues to lay off people.
Rob Chrisman is out saying some of the big banks are relaxing their requirements for 4506Ts during the government shutdown. Wells retail will require a signed 4506 but will let the loan close without the transcript. Wells correspondent, however is not doing this. U.S. Bank is temporarily waiving the requirement for transcripts, but will still need the executed form 4506T. Stearns is not requiring an executed 4506T for W2 borrowers. So it seems like the mortgage market will not in fact grind to a halt if the shutdown drags on for a while. There are missives from the other lenders in there as well. At the end of the day, business is down and the 4506T is an investor overlay, not a requirement.
The shutdown debate is now starting to mix with the debt ceiling debate. Remember, the even if we don’t raise the debt ceiling, that doesn’t automatically mean we default. Interest on the debt is about 7% of the US budget. The debt ceiling allows maturing debt to be replaced with new debt. As long as the net balance of debt remains under the limit, we can issue debt just fine. So all that really comes into play is interest, which is only 7% of the budget.
Here is the breakdown of government spending:
Of course the problem is that both sides see each other as villains in a movie and cannot fathom they believe what they do for any reason other than evilness, power hungriness, need for control, greed, stupidity, or naivete. Neither side sees any value whatsoever in the opposing party’s position. As long as the markets behave there probably isn’t going to be a lot of pressure being put on Washington to come to an agreement. Think of the Snicker’s Ad: Not going anywhere?
Assuming we get a deal soon, don’t get lulled by interest rates at these levels. If we get a solution over the weekend, the shutdown will probably be short enough to not have any effect on the economy. Which means we go back to wringing our hands about the Fed and tapering. The trend is up for rates and we are in a counter-trend move. Don’t lose sight of the big picture.
Filed under: Morning Report |
All Things in Moderation 
Good piece on the various individual department funding deadlines tied to the shutdown.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/03/when-will-congress-feel-pressure-to-end-the-shutdown-it-could-take-weeks/
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we’re so screwed.
http://online.wsj.com/article/SB10001424052702304906704579111433416080064.html?mod=WSJ_Opinion_MIDDLETopOpinion
So, how much of a premium is strapping young Brendan Mahoney paying to help make ObamaCare work? Oops. The Courant reports that Mahoney “said that by filling out the application online, he discovered he was eligible for Medicaid. So, beginning next year, he won’t pay any premium at all.”
So the great success story of ObamaCare’s first day is the transformation of a future lawyer who was already paying for insurance into a welfare case.
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Uh, would Trumka agree?
@nbcwashington: Obama: If a worker shut down a manufacturing plant until they got what they wanted, they’d be fired. Watch live: http://t.co/4DWGiJMVCO
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Would Tip O’Neill have agreed?
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If we get to December w/out enough healthy young enrolling, does Obamacare ‘s advertising change to threats rather than benefits?
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the threats are a pre-existing condition.
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Unfortunately America, game over.
I personally apologize for not doing enough to save our beautiful country. In the end Mr. Franklin we could not keep it.
Pity. Nothing lasts forever though.
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Well, not sure about that NoVa, no checks this year on the veracity of individual claims re income, so why would they check if, in May, some enterprising person claims a “life event” about losing insurance through their job? Could do it on te way to the doctors.
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If we get to December w/out enough healthy young enrolling, does Obamacare ‘s advertising change to threats rather than benefits?
I blame Bush
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Shots fired near Capitol building.
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so eveyone is getting a live shot of basically were i spend a lot of my time.
but not today. in the office.
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For Mark from his question on PL:
“Question for anyone who remembers: didn’t we have a rule around 1990 that budget increases enacted by Congress carried with them automatic debt ceiling increases? ”
You are thinking of the Gephardt Rule.
http://www.theatlantic.com/politics/archive/2011/05/how-dick-gephardt-fixed-the-debt-ceiling-problem/238571/
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BTW…today is the 5th anniversary of TARP.
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And in an incredible coincidence (which probably went largely unnoticed because of TARP) today is also both the 5th anniversary of OJ being convicted of armed robbery and the 18th anniversary of OJ being acquitted of murder. Weird.
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Thanx – remembered it a little more fully when you posted.
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A Day that Will Live in Infamy.
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This is really funny.
“What gets me is he’ll look at 46 [Republican] senators and say, ‘What do Mike and Ted want to do?’ What are we, chopped liver?” the lawmaker said.
Perhaps we can uncover a reason for this hostility.
But senior Senate Republicans are exasperated that the entire party appears to be ultimately taking its lead from two junior members.
http://thehill.com/homenews/news/326273-coburn-calls-mcconnell-a-leadership-vacuum
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NoVA – FYI
http://www.washingtonpost.com/local/virginia-politics/third-option-gets-some-traction-in-va-governors-race-libertarian-rob-sarvis/2013/10/02/ef9d7fda-2a04-11e3-8ade-a1f23cda135e_story.html
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Nick Gillespie at Reason blames Obama for the shut down.
The only reason the government is shut down is because there is no budget, or a continuing resolution, or a spending plan, or set of appropriations bills, or whatever you want to call it. A stronger leader and a more effective politician than Obama would have made sure that we never got to the moment we’re in. Especially at the exact moment when his big health-care reform bit was about to start enrolling people. I suggested that Obama would have done better by “kick[ing] the asses of sorry little functionaries like John Boehner and Harry Reid to pass budgets on a regular basis.”
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Krauthammer makes a similar point:
I don’t agree with current Republican tactics. I thought the defunding demand impossible and, therefore, foolish. I thought that if, nonetheless, they insisted on making a stand, it should not be on shutting down the government, which voters oppose five to one, but on the debt ceiling, which Americans favor two to one as a vehicle for restraining government.
Tactics are one thing, but substance is another. It’s the Democrats who have mocked the very notion of settled law. It’s the Democrats who voted down the reopening of substantial parts of the government. It’s the Democrats who gave life to a spontaneous, authentic, small-government opposition – a.k.a the Tea Party — with their unilateral imposition of a transformational agenda during the brief interval when they held a monopoly of power.
That interval is over. The current unrest is the residue of that hubris.
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JNC — thanks. that article was on the front page Tuesday or Wednesday. I think if he’s a 10 percent, he’ll get a slot at the next debate.
There’s rumbling now that the Ds are thrilled with the shutdown b/c they think it is a political advantage for them. I don’t think they are exempt from the “post-policy” DC.
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I don’t understand the Debt Ceiling is our Alamo crowd. They’d be the first ones to piss and moan if we go past it w/raising it. Does Krauthammet really think Obama won’t stop SS checks as a first act?
Look, I’m for not raising the debt ceiling, but I acknowledge the political cost of it. R’s lose the House. That’s fine with me as otherwise why have it if your not going to use it’s power. But Krauthammer is just bullshitting here, he knows Boehner’s already capitulated on that, and he was against using the CR to extract compromises on Obamacare. It’s an easy position to take because he can say “you shoulda done this.”
Boehner not going to nut up and send the House home. He’ll get a Med Device Tax repeal instead of the Vitter amendment. Big fucking deal. The sequester caps we’ll be raised and it will still be easy to monetize the debt.
What exactly then is the purpose of the Republican Party? That they can spend even more recklessly then Democrats.
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McWing:
But Krauthammer is just bullshitting here, he knows Boehner’s already capitulated on that, and he was against using the CR to extract compromises on Obamacare.
You should read the whole article. His comment about disagreeing on tactics was just an aside. His primary point was simply that Obama and the D’s have brought this on themselves.
As for your point, I agree that R’s have spent recklessly, but they definitely don’t spend as recklessly as D’s. As I have pointed out before, history shows that spending increases are lowest (which is not to say they are low) when R’s control congresss, and highest when D’s control congress. (They are the very highest when D’s control everything).
I think your position makes sense if one believes, as I think you do, that 1) we are at a tipping point beyond which economic collapse brought on by government spending is inevitable and so 2) if we do tip we might as well get the collapse over with sooner rather than later. Then it makes sense to take the political risk of taking a hard line in the knowledge that if you lose, the D’s will regain a monopoly on government and accellerate down the path towards the economic cliff.
But for those, presumably like Krauthammer, who do not think we are at such a tipping point but think that unopposed D policies across the board in the future will put us there, then maintaining a polticially viable opposition to D’s is still important, making the risk that you are willing to take a risk too far. In other words, Krathammers stance on tactics makes sense if he disagrees with you on the inevitability of collapse if Obamacare is not stopped right now.
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Grover Norquist is correct and has been at this a lot longer than most people :
“GN: No, the leverage isn’t the debt ceiling. It’s not the CR. It’s the sequester. Democrats think this is desperate privation. It’s like the Kennedy kids with only one six-pack. They feel they’ve never been so mistreated. So there’s something they want. And there’s something Republicans want. So you could see a deal there. And the leverage was the sequester. That’s what struck me as what leadership was thinking about, and it made a great deal of sense..”
http://www.washingtonpost.com/blogs/plum-line/wp/2013/10/04/dems-move-to-force-republicans-to-reopen-the-government/
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