Morning Report – Its Janet 10/09/13

Vital Statistics:

Last Change Percent
S&P Futures 1654.3 3.9 0.24%
Eurostoxx Index 2917.5 14.1 0.49%
Oil (WTI) 103.3 -0.2 -0.19%
LIBOR 0.246 0.002 0.82%
US Dollar Index (DXY) 80.39 0.329 0.41%
10 Year Govt Bond Yield 2.65% 0.01%
Current Coupon Ginnie Mae TBA 105.4 0.0
Current Coupon Fannie Mae TBA 104.5 0.2
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.27
Markets are up small after Alcoa kicked off earning season with good numbers. Bonds and MBS are down small.
Mortgage Applications increased last week by about a percent, according to the Mortgage Bankers Association. The refi index was up about 2.5%, while the purchase index fell small.
The FOMC minutes will be released at 2:00 pm EST. In the absence of economic data this will undoubtedly take on more importance.
In a move that surprised exactly no one, Obama is expected to name Janet Yellen to replace Ben Bernanke when his term expires in January. Basically it means Alan Greenspan’s third term. Yellen is a dove, a bigger dove than Bernanke, who was a bigger dove than Greenspan. Expect fawning support from the media due to the groundbreaking nature of the nomination. (If only Janet Yellen had been running the Fed, we wouldn’t be in this mess – never mind that while Ben Bernanke just spiked the punch bowl, Janet will be adding oxycontin to it.) The extra juice will have the Street singing Dammit Janet.
The shenanigans regarding the debt ceiling are not being felt in the 10-year, but they are being felt in the 1 month T-bill. The yield has increased from almost zero in mid September to 29 basis points currently. Any sort of default will wreak havoc in the repo market as defaulted securities are ineligible to be used for collateral. That has the makings of a credit crunch and bears watching. If there is one thing that is sure to get the market’s attention it would be liquidity problems somewhere because someone can’t roll over their repo lines.

Completed Foreclosures increased to 48,000 in August (up 1.3% month over month, but down 34% on an annualized basis), according to CoreLogic. Shadow inventory was 1.9 million units. Note: The MBA and Corelogic have different methodologies for calculating shadow inventory – The MBA’s estimate is about 50% higher.

11 Responses

  1. First (I always wanted to say that)

    Guess obama is putting the thumbscrews on conservative columnists..http://www.politico.com/blogs/media/2013/10/obama-meets-with-krauthammer-gigot-174603.html

    Carry my water or face an audit…

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  2. Meh, none were enthusiastic about shutdown. All thought real fight was on debt limit that they all know Boehner caved on in July. Just didn’t agree with the strategy. More interested in budget controls.

    Ultimately, both Conservatives and Moderates felt OCare was settled with 2012 election. For better or worse they’re just waiting out so called anarchist/arsonist/racists/homophobe/knuckledraggers to finish temper tantrum so they can then “fix” OCare.

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  3. BTW Brent, you should add a ! To your “First” er, first.

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  4. Frist!

    my boss is telling us that health care premiums are going up in a big way starting in January. When people who aren’t rich (incomes over 88k) suddenly find that they got a big fat increase in their healthcare premiums in lieu of a raise, they might decide that obamacare isn’t all its cracked up to be.

    You mean I have to pay more so people can wait to get sick before I buy health insurance? Of course it is just wealth redistribution outside of the tax code – I can’t raise taxes on the rich, but I can ensure the rich’s (and the upper middle class) pay higher health care premiums which subsidizes the poor. The Community Reinvestment Act is the same thing.

    I think the sticker shock on health care premiums, combined with the part time work numbers people may begin to chafe at it. Interesting stat: According to the IBP / TIPP economic optimism survey, 8% of all households have at least one person who had their hours cut to below 30 to accommodate obamacare.

    Of course obamacare is designed to fail, to pave the way for single payer, but obama should at least feel some blowback from what he has done. Republicans could find themselves with a powerful issue in 2014 – How did you like you big increase in premiums?

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  5. Why do people think that if it weren’t for the shut down we ‘d be talking about a(nother) dysfunctional government program? I hear from the press that they’d talk about OCare rollout but for the shutdown. The conversation, if no shutdown would be about the debt ceiling, or Yellen or something else. It would not be about OCare.

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  6. “Of course obamacare is designed to fail, to pave the way for single payer”

    1. Implement flawed policy based on lies. It will save everyone money!
    2. Move goalposts for flawed policy … Of course it will cost more! But your insurance was garbage anyway! Also, fairness! no justice no peace!
    3. Replace flawed policy with single payer, because it’s what other civilized countries do.
    4. Ignore quality concerns from inevitable decline in standards and care.
    5. Wash hands of whole thing, embrace the suck and profit off knowing the insides and out of Medicare, which has been grafted onto the entire country.
    6. Christen new 70-foot yacht, the “Rent Seeker” with the blood and tears of those screwed in single payer.
    7. Party on said yacht with exiled ATimers and strippers.

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  7. This is a deeply revealing article about internal GOP divisions.

    http://www.nytimes.com/2013/10/04/us/politics/gop-elders-see-liabilities-in-shutdown.html?pagewanted=all&_r=1&

    These are my favorite quotes.

    Ms. Ayotte was especially furious, according to two people present, and waved a printout from a conservative group friendly to Mr. Cruz attacking 25 of his fellow Republican senators for supporting a procedural vote that the group counted as support of the health law.

    Ms. Ayotte asked Mr. Cruz to disavow the group’s effort and demanded he explain his strategy. When he did not, several other senators — including Mr. Johnson, Mr. Coats and even Mitch McConnell, the minority leader — joined in the criticism of Mr. Cruz.

    “It just started a lynch mob,” said a senator who was present.

    Despite the uproar, Mr. Cruz did not offer a plan for how his party could prevail in the shutdown battle and suggested his colleagues were defeatists.

    I also find this interesting.

    “The story people see now is President Obama sinking like a rock for months, and the only thing holding him up are the Republicans,” lamented Haley Barbour, the former governor of Mississippi who previously led the Republican National Committee. “We have to get to the best resolution we can under the Obama administration, and then focus on some other things.”

    What is not addressed is why the GOP ruling class is following Ted Cruz. They don’t like him or agree that what he’s doing is good for what they want to achieve. It’s as if they’re following him because that’s what the base of the party, the people that vote in te primaries and volunteer on campaigns, want.

    Shorter GOP establishment: If it weren’t for our core supporters, we could get a helluva lot done!

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  8. Good Wonkblog piece:

    “The problem with President Obama’s shutdown strategy
    By Ezra Klein, Published: October 9 at 3:01 pm”

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/09/the-problem-with-president-obamas-shutdown-strategy/

    Like

  9. @AceofSpadesHQ DWS sez Exchange website designed for 50k/day. enroll due by 31 Mar = max design total just 9.1M

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