Morning Report – Meet Stanley Fischer 12/12/13

Vital Statistics:

Last Change Percent
S&P Futures 1781.7 0.9 0.05%
Eurostoxx Index 2925.8 -21.6 -0.73%
Oil (WTI) 97.77 0.3 0.34%
LIBOR 0.243 -0.001 -0.41%
US Dollar Index (DXY) 79.98 0.089 0.11%
10 Year Govt Bond Yield 2.87% 0.01%
Current Coupon Ginnie Mae TBA 104.4 -0.1
Current Coupon Fannie Mae TBA 103.3 -0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.45
Markets are higher this morning after a good retail sales report. Initial Jobless Claims rose to 368k from 320k the week before. Import prices fell. Bonds and MBS are lower.
Stanley Fischer is mooted to be the next Vice Chairman of the Fed. He ran the Bank of Israel through the 2008 financial crisis, and his international experience is supposedly one of the reasons why Obama is interested in him. He has a experience teaching at free-market leaning University of Chicago, and left-leaning MIT. Supposedly he is skeptical of the new Fed communications strategy, which could put him in conflict with Janet Yellen. He has called QE “dangerous, but necessary.”
In the “now they tell us” category, QE has made the traditional method of tightening ineffective. When the Fed wants to tighten monetary policy, it would meter out the amount of money flowing into and out of the banking system on a daily basis. The Federal Funds rate was essentially the gauge they would use. Since the Fed has injected multiple trillions of liquidity into the system, the old methodology won’t work, unless they significantly drain the system, which would be disruptive to say the least. Instead it plans to repo its vast security portfolio in order to pull liquidity out of the system. Of course this won’t matter for a couple of years, but it just goes to show how much QE has changed the landscape. You can see just how much the Fed’s balance sheet has ballooned below:

A Reuters poll of 60 economists shows they expect growth to accelerate in 2014, with GDP hitting 2.5% in Q1 and reaching 3% by year end. Continued recovery in housing, along with a pick up in capital expenditures are the keys. The consumer de-leveraging continues. You can see that household debt has fallen to 77% of GDP and is back at 2003 levels.

39 Responses

  1. Frist… good one from Rob Chrisman:

    Remember newspapers?
    1. The Wall Street Journal is read by the people who run the country.
    2. The Washington Post is read by people who think they run the country.
    3. The New York Times is read by people who think they should run the country, and who are very good at crossword puzzles.
    4. USA Today is read by people who think they ought to run the country but don’t really understand The New York Times. They do, however, like their statistics shown in pie charts.
    5. The Los Angeles Times is read by people who wouldn’t mind running the country, if they could find the time, and if they didn’t have to leave Southern California to do it.
    6. The Boston Globe is read by people whose parents used to run the country and did a poor job of it, thank you very much.
    7. The New York Daily News is read by people who aren’t too sure who’s running the country and don’t really care as long as they can get a seat on the train.
    8. The New York Post is read by people who don’t care who is running the country as long as they do something really scandalous, preferably while intoxicated.
    9. The Miami Herald is read by people who are running another country, but need the baseball scores.
    10. The San Francisco Chronicle is read by people who aren’t sure if there is a country or that anyone is running it; but if so, they oppose all that they stand for. There are occasional exceptions if the leaders are handicapped, minority, feminist, atheist dwarfs who also happen to be illegal aliens from any other country or galaxy, provided of course, that they are not Republicans.
    11. The National Enquirer is read by people trapped in line at the grocery store.
    12. The Tampa Bay Times is read by people who have recently caught a fish and need something to wrap it in.

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  2. That’s funny.

    I confess that this whole fake sign language interpreter flap makes me giggle.

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  3. Look, I can’t help it when this stuff comes up.

    http://www.buzzfeed.com/catesevilla/the-sign-language-interpretater-at-mandelas-memorial-was-a-f?s=mobile

    I hold myself blameless.

    And in a psychotic break.

    Yeah, that works.

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  4. I am in physical pain.

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  5. The Los Angeles Times is read by people who wouldn’t mind running the country, if they could find the time, and if they didn’t have to leave Southern California to do it.

    LOL, that sounds slightly familiar to me!

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  6. *raising hand sheepishly*

    3. The New York Times is read by people who think they should run the country, and who are very good at crossword puzzles.

    Guilty

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  7. I confess that this whole fake sign language interpreter flap makes me giggle

    I “speak” American Sign Language, and I’ll admit I was completely at sea as to who/what that guy was supposed to be doing. The fact that nobody caught the fact that he wasn’t really signing surprises me, since even to people who don’t sign it should have been clear that he wasn’t “speaking” nearly enough to actually be interpreting.

    But that Lachian Markay tweet is priceless!

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  8. This is an article on Privelage and Victimology. The author is an adoptee of Korean descent now living in Texas.

    http://www.salon.com/2013/12/11/racism_in_the_classroom_when_even_our_names_are_not_our_own/

    What does this piece say to you?

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    • McWing;

      What does this piece say to you?

      It says to me that Salon must be extremely hard-up for material, to be publishing such mind-numbing, psuedo-intellectual claptrap.

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  9. jnc:

    Let’s drop the insurance argument.

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  10. Sure. If if makes you feel better, you can call me QB Jr.

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  11. *snort

    No. I’m frustrated that I’m unable to frame my argument in a way that you understand, and I don’t like the tone that thread is taking.

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  12. I think your emphasis on “ahead of time” in your argument is misplaced. The real point you are making I think is that it has to be mandated because too many people will think it can’t happen to them and not purchase it voluntarily and also it falls under your definition of what should be considered a basic health insurance package.

    But that’s not the case that the State Senator was making on the merits.

    You can make a similar argument that flood insurance should automatically be in all homeowners policies, as too many people forgo it due to not thinking it through and then get burned over the fight between “storm damage” and “flood damage” when they go to make a claim after say a hurricane.

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    • Actually to all on here: concerning the PPACA:

      Young adults absolutely need insurance and any parent who tells their adult children they don’t aren’t being very good parents.

      You all know I was born with disabilities… my knee caps out of alignment with my knee joints and my congenital spinal stenosis. Good thing I had no idea of any of my disabilities until I was 30 and I had insurance through my employer. If my knees had gone out on me 5 years sooner I would have had no insurance and either my surgeries would have been via the ER and you all help me pay for it, or nothing would have been done and I would never have been able to have a job.

      In addition, at the age of 19, just 5 days before my 20th bday, I was in a house fire and suffered 2nd and 3rd degree burns over 50% of my body and suffered pulmonary burns as well. I had no insurance. I want to thank you all for paying for the ambulance, ER and lengthy intensive care, and the psychologist who taught me self hypnosis for my pain control (btw, it worked!!) that I received.

      In addition, my eldest son was born with diabetes. Although we didn’t know until he was 24 and laid delirious on his living room floor for almost 2 weeks before he finally was able to dial 911. When he got to the ER his sugar level was 800.. on the verge of diabetic comma. He had NO insurance and immediately became “pre-existing”. Thanks to me he had the insulin and test strips he needed. Thanks to all of you, his major stroke (after at least a dozen mini strokes) ER visit and hospitalization was paid for all of you. Thank goodness after the major stroke he was approved for SS disability and received Medicare immediately since it took the SSA 5 years to approve his disability.

      In addition, at the age of 24, my youngest son was diagnosed with a very rare disease which results in cysts covering his head and the back of his neck, his armpits and his groin area. After knowing about my and his brothers health issues, he did have insurance and still does. He is working with a surgeon at this time to schedule having them all removed… in hopes they don’t come back… all fingers and toes are crossed. And of course, he will need plastic surgery at least on his head to “round out” his head after removing the many, many cysts.

      Just my family alone should provide serious considerations for young adults to be insured. Not only for illnesses, diseases and accidents like those I provided above, but for the car accidents, sports injuries and even those “young and dumb” injuries.

      But if you really feel that “forcing” citizens to carry health insurance is wrong, all I can say is Thank You for paying for whatever medical needs the uninsured rack up.

      Like

  13. QB senior mostly posts over at PL. He’s become consistently more strident in tone and more willing to take personal shots than previously.

    I still get along with him, but he’s unnecessarily dismissive of Michi in my opinion.

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  14. also it falls under your definition of what should be considered a basic health insurance package.

    Essentially, yes. I’d argue that in this specific case it should be simply considered medically necessary and not something that should be required to be covered separately.

    The State Senator was indulging in a good bit of hyperbole, but that’s what politicians do best.

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  15. See, I do understand your argument.

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    • jnc:

      I just read the thread. I don’t know how you can stand it over there.

      BTW, I thought this was your best point: “Why not just mandate that the doctor themselves provide the abortion free of charge as a pro bono and skip the middle men?”

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  16. dismissive of Michi

    Too lightweight and liberal for QB, too obtuse and Libertarian for Dezzie. Not too shabby a record!

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  17. Scott, the discussion that got brought over here is in this thread.

    http://www.washingtonpost.com/blogs/plum-line/wp/2013/12/12/on-senate-reform-dems-should-aim-higher/

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  18. Geanie, how are you doing?

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    • Hi Jnc,

      I’m hanging in there. So far, nothing from Congresscritter Bidenstine’s office on helping me get my judicial review expedited… gonna give them a call soon. SS attorney called me this morning to let me know they are submitting my request for the judicial review…. only took them over 3 weeks to submit it (ugh). She said in about a month we will receive a notice from the judicial review group that they have our request and they will review it… wow, takes them a month to just acknowledge they received our request….and who knows how long they will take after that.

      In the meantime, hubby slipped and fell on ice trying to get our mail on Saturday. Hurt his hip and groin and is still on crutches. So I’ve had to help him as much as I can which has caused my pain to increase. But he’s getting better now and can at least get his own drinks, etc. But, I just hurt all over now. With the really cold weather, and our broken house allowing air in through every little crack, it’s been difficult to keep the house warm and thus, my degenerative arthritis is having a field day, my hands, especially the right, hurt terribly. My right hand was completely unusable for the first 2 hours after I woke up this morning. Thought I would get on here, find a topic, make a comment and try to loosen it up a bit more, although it hurts to do so. And with the cold I decided to cut the bridge out of 1 sock of each pair so I can at least wear a sock on my left foot without it setting off all the nerves across the bridge of my foot… at least my toes, bottom of foot and heel are warm. My neck feels like there’s a giant vice grip on it, tightening and tightening with every little movement…. and that makes my head feel like it weighs a frigging ton… and that dang artery keeps getting compromised… I’m getting nausea, dizziness and headaches off and on throughout the day and then it just goes away… gotta be that artery. And of course, just as every years for several years now, with the cold comes my lower back pain which is what forces me out of bed every morning and eases up during the day and then worsens as night comes.

      Other than all that, guess I’m doing ok, I’m still alive.

      Like

  19. Scott, that pretty obviously won’t work given the timing of the justice system. You could mandate that he pay restitution to whomever footed the bill eventually.

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    • jnc:

      Scott, that pretty obviously won’t work given the timing of the justice system. You could mandate that he pay restitution to whomever footed the bill eventually.

      That would work.

      BTW, how about this: The Guttmacher Institute reports that last year there were roughly 1.2 million abortions performed in the US. Guttmacher has previously reported that less than 1% of abortions performed are performed on victims of rape (see page 113). That would put the number abortions performed on rape victims at about 12,000/year. I looked up the cost of a first trimester abortion in New York City (I assume among the most expensive areas in the country) and several sites put the cost at between $300 and $500. So assuming the high end of that range, about $6 million would be needed to cover the cost of all rape-related abortions in the US each year.

      I would imagine it would be incredibly easy for someone who really wanted to to establish a private foundation and raise enough funds dedicated to paying for abortions for victims of rape. In fact it surely would require significantly less than $6 million a year because in many instances insurance already covers the cost. The funds would only be required for victims without insurance at all or without a policy that already covered it.

      Personally I think that Planned Parenthood would be an ideal organization to establish just such a foundation or program. In fact PP could actually provide it as part of its own services. Since PP already engages in huge amounts of charitable fundraising, it could either establish an explicit fund dedicated to funding abortions for rape victims, or it could simply use its regular fundraising and make free abortions for rape victims a part of its normal offered services. And, of course, PP could pursue the rapists for recompense after the fact.

      For those concerned about a rape victim having to pay for her own abortion, such a plan seems a much more sensible, and much more free market, solution, than passing laws requiring insurance providers to pay for what is a politically controversial procedure.

      Like

  20. Geanie, how are you doing?

    Yes, inquiring minds want to know!

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  21. @Geanie: “Just my family alone should provide serious considerations for young adults to be insured.”

    While there is a difference between generalized insurance of the kind most medical insurance consists of now and catastrophic insurance, I agree it’s a good idea. Cuz you just never know.

    My oldest daughter was recently diagnosed with Type 1 diabetes. While I’ve always felt a little pained at the $800 a month I pay in health insurance, turns out it was a money saving option for my family. Because you never do know.

    That being said, I don’t have any real sense that the ACA has significantly improved anything. I suppose time will tell.

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    • Kevin,

      absolutely right, you never know, no matter what age you are. And we won’t know how well the ACA works until sometime next year, most likely after the March 31 signup deadline. I did create a new account on the ACA federal site and got my results, based on my having my disability approved and having that monthly income… I qualify for a plan with a $139/mo subsidy, leaving me to pay $537/mo for the plan I want and need. I like that personally since the last time I had insurance, which was through my employer, cost me $1024/mo… yea, employer paid no part of it.

      Just to let you all know, I sent Bridenstine another email asking for a status. I got a phone call in return from my “case worker” Kathy. She already reached out to SS telling them we need my case expedited…with no response.. she is going up the chain. I had provided Bridenstine’s office with my complete list of disabilities, etc. She could not understand why SSA denied me in the first place. She told me she is going to stay on this and do all she can to get my case expedited. Let’s hope SSA responds.

      Like

  22. Senate Finance marked up and voted to replace the SGR.
    and then they brought up a bill on preventing child trafficking. and all the lobbyist left.

    Like

    • I forgot to add in my last post late yesterday that the silver plan I would be selecting once my disability is approved does allow me to keep all my doctors and the hospital I prefer 🙂 Perhaps those 4 million who are losing their insurance should consider checking out the PPACA instead of just whining.

      Like

    • jnc:

      PolitiFact Lie of the Year:

      PolitFact is pretty shameless. This was Politifact’s take on the same statement back in 2009:

      It remains to be seen whether Obama’s plan will actually be able to achieve the cost savings it promises for the health care system. But people who want to keep their current insurance should be able to do that under Obama’s plan. His description of his plan is accurate, and we rate his statement True.

      Now PolitiFact acknowledges that “the promise was impossible to keep”, which is true enough, but was just as obviously true back in 2009. Which pretty much makes PolitiFact’s 2009 assessment just as much of a lie as their 2013 Lie of the Year.

      Perhaps instead of PolitiFact, it should be called PolitiSpin.

      Like

      • I just paid for another year of the WordPress upgrade, so those few of us who are left better stick around for at least one more year.

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  23. I blame Whitaker.Fucking.Chambers.

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  24. Thanks Scott. I actually find this site to be a usefull filter for a lot of the noise on the other sites. I.e. a “best of” aggregation service.

    Like

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