Morning Report – 3Q GDP revised upward to 4.1% 12-20-13

Vital Statistics:

Last Change Percent
S&P Futures 1805.8 3.7 0.21%
Eurostoxx Index 3037.7 6.7 0.22%
Oil (WTI) 98.84 -0.2 -0.20%
LIBOR 0.248 0.003 1.02%
US Dollar Index (DXY) 80.73 0.103 0.13%
10 Year Govt Bond Yield 2.95% 0.02%
Current Coupon Ginnie Mae TBA 104 0.0
Current Coupon Fannie Mae TBA 102.8 -0.2
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.52
Markets are higher this morning on the better-than expected 3Q GDP report. Bonds and MBS are down
The final revision to third quarter GDP came in at 4.1%. Inventory build accounted for a third of the gain, but services spending was revised up the most. Given that the first half of the year was relatively weak, a print like this represents a “catch up” more than a robust economy. Still, it seems like consumer spending is back, and that is a good sign. Consumers can only put off purchases for so long – eventually the car needs to be replaced, the clothes wear out, and you have to buy new ones. That is generally how recessions end.
The test vote for Janet Yellen is today, which should be a nonevent. The full vote could come this weekend. Yellen is expected to be confirmed easily.
Freddie Mac has a cool interactive map where you can play with rates and downpayment to determine affordability in different areas. Suffice it to say Coastal CA, DC, Boston, and Miami are not affordable.

25 Responses

  1. Regarding the PPACA mandate, this is amusing:

    “1. The individual mandate includes a “hardship exemption.” People who qualify can either ignore the individual mandate altogether or purchase a cheap, bare-bones catastrophic insurance plan that’s typically only available to people under 30.

    2. According to HHS, the exemption covers people who “experienced financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan.”

    3. Today, the administration agreed with a group of senators, led by Mark Warner of Virginia, who argued that having your insurance plan canceled counted as “an unexpected natural or human-caused event.” For these people, in other words, Obamacare itself is the hardship.”

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/19/the-obama-administration-just-delayed-the-individual-mandate-for-people-whose-plans-have-been-canceled/?hpid=z1

    The contrast with the PPACA problems in the US Territories is telling.

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/19/think-your-state-has-obamacare-problems-theyre-nothing-compared-to-guam/?wprss=rss_business&clsrd

    Like

  2. Nice piece by Avik Roy on just how badly The Abomination has effected the individual market.

    http://www.forbes.com/sites/theapothecary/2013/12/20/utter-chaos-white-house-exempts-millions-from-obamacares-insurance-mandate-unaffordable-exchanges/

    It really is hard to imagine just how bad a law this is. I don’t think someone consciously trying to destroy the individual market could have been as effective. I think that is unarguable.

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    • McWing;

      I don’t think someone consciously trying to destroy the individual market could have been as effective.

      Are you sure it wasn’t done consciously? I have always thought that O-care was designed to lead to the destruction of the insurance market. How long, do you suppose, until we start hearing that the only way to “fix” this mess is to go to single payer, government run “insurance”?

      Like

  3. Why insurance companies trusted this guy to begin with is beyond me…

    Like

  4. Well, they colluded and are now whining. Screw ’em. Sic Semper Tyrannis.

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  5. What Brent said. I don’t represent insurers. But they were so eager to be “part of the solution”

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  6. To our Progrssive’s here, is this true in your opinion?

    But things are complicated by the fact that progressive activists and agitators aren’t interested in comity or stasis or accommodation. Instead, they view division and conflict as necessary steps to achieve their progressive goals

    http://dailycaller.com/2013/12/19/you-will-be-made-to-care/

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  7. They lacked the morals to not partake of the spoils of the force of law. Would I have the strength of character to not participate in a regime that would have the government require it’s citizens to buy my product? I’d like to think so but it don’t know what I’d do when push came to shove.

    Like

  8. Scott, it will be fascinating to hear why a new government run system healthcare system will be better than the current government run healthcare system.

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    • McWing:

      Scott, it will be fascinating to hear why a new government run system healthcare system will be better than the current government run healthcare system.

      I think it is pretty easy to predict…It’s those damn insurance companies. They are the ones cancelling policies. And what purpose do they serve, anyway? They are just middlemen, providing nothing more than an administrative function. Even their revenues are protected by a government guarantee. Private business reaps all the profits while the government takes all the risk. This mustn’t stand! It would be far more efficient to simply eliminate the insurance companies and have the government provide the coverage directly, since the government is backstopping the risk anyway.

      Remember, you read it here first.

      Like

  9. “They lacked the morals to not partake of the spoils of the force of law”

    shame. shame.

    [checks resume]

    hey, let’s not rush to judgement

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  10. Aerosmith’s Love in an Elevsto is really a stupid song.

    Like

  11. ” Mark Warner of Virginia, who argued that having your insurance plan canceled counted as “an unexpected natural or human-caused event.” For these people, in other words, Obamacare itself is the hardship.”

    does the event has to be “unexpected.” Because this was completely foreseeable.

    I’d look it up in the ACA, but I don’t think what’s written there actually matters anymore.

    Like

    • nova:

      I’d look it up in the ACA, but I don’t think what’s written there actually matters anymore.

      Isn’t that the sad truth.

      Like

  12. To our Progrssive’s here

    No.

    Like

  13. I may or may not be in the office next week.
    If not, everyone have a Merry Christmas or Festivus or whatever it is you do.

    Like

  14. Worth noting. Yes it was true.

    “The Welfare Queen

    In the 1970s, Ronald Reagan villainized a Chicago woman for bilking the government. Her other sins—including possible kidnappings and murders—were far worse.
    By Josh Levin ”

    http://www.slate.com/articles/news_and_politics/history/2013/12/linda_taylor_welfare_queen_ronald_reagan_made_her_a_notorious_american_villain.html

    Like

  15. @Scott – I think the Left is also under the impression that CEO pay is the reason why people get denied and if we nationalized it, that would be a deadweight loss that would go away. Of course they don’t take into account that any incentive to make things more cost-effective or better go away as well.

    Like

    • Brent:

      I think the Left is also under the impression that CEO pay is the reason why people get denied and if we nationalized it, that would be a deadweight loss that would go away.

      Good point. That will be part of it too, no doubt.

      Like

  16. Like

  17. Heh.

    Like

  18. Damn! Who’d a thunk that Utah’d be the state where *anything* goes.

    Like

  19. Who here thinks any mandate is enforced in 2014?

    Like

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