Morning Report – glum news for the originators 1/16/14

Vital Statistics:

Last Change Percent
S&P Futures 1837.2 -4.4 -0.24%
Eurostoxx Index 3158.1 -10.7 -0.34%
Oil (WTI) 94.17 0.0 0.00%
LIBOR 0.236 -0.002 -0.63%
US Dollar Index (DXY) 80.92 -0.106 -0.13%
10 Year Govt Bond Yield 2.86% -0.04%
Current Coupon Ginnie Mae TBA 105.1 0.0
Current Coupon Fannie Mae TBA 103.8 0.2
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.45
Stocks are lower this morning after a Citigroup earnings miss. Initial Jobless Claims fell to 326k and consumer inflation remains low. Bonds and MBS are up.
Citi reported mortgage originations dropped 43% sequentially and 51% year-over-year. The stock is down 3% pre-open. Separately, Citi sold Fannie Mae MSRs on $10 billion worth of loans. These are mainly delinquent loans.
Flagstar is cutting staff by 17%.
The Fed released their Beige Book survey yesterday afternoon – nothing earth-shattering, though it does appear that things are picking up. Still, the survey is peppered with characterizations such as “modest” and “moderate.” Since the Beige Book surveys are basically a recap of recent economic announcements broken down by Federal Reserve district, it contains no “new news” and is therefore not a market-moving release.
The NYT has a long article on the woes affecting homebuyers and lenders. More and more banks are going to have to rely on the purchase business, which is a different animal than the refi business. The big banks are still shunning those without pristine credit. That said, the big banks are not the only game in town, and this is an opportunity for the smaller lenders to say “they might not give you a loan, but we will.”
Americans’ assessment of their own personal situation ticked down, according to Gallup. 42% of Americans said they were worse off than a year ago, up from 40% last year. This is a surprising result given how much asset prices (stocks and housing) have improved. Maybe the December jobs report wasn’t just a fluke due to bad weather.

35 Responses

  1. So, still bouncing along the bottom.

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  2. Did anyone actually believe it?

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  3. For Nova:

    “Is the U.S. too corrupt for single-payer health care?
    By Ezra Klein
    January 16 at 10:20 am”

    http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/16/is-the-u-s-too-corrupt-for-single-payer-health-care/

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    • jnc:

      The notion that a board of government appointed bureaucrats can ever be “independent” of any kind of outside influence and as a result best able to set prices for a good or service at the “right” level is nuts. That it persists is a real puzzle. The product, I guess, of the childish wishful thinking that we have become accustomed to from the left.

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  4. TPM readers to the young and poor: Fuck you, Pay my insurance.

    http://talkingpointsmemo.com/edblog/obamacare-young-adults-premiums

    Lotta tolerance.

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  5. I thinks it’s because Hayek and the Knowledge Problem isn’t taught.

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    • Brent:

      Hah.

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      • For Geanie:

        Texas does better on standardized tests for its white, hispanic, and black kids than does NY, but scores lower than NY overall. How can this be? Well, Texas’ hispanic kids don’t score as well as NY white kids, but TX schools are majority Hispanic. White and black Texans do better than white and black Wisconsinites. But WI scores better than TX overall b/c TX is majority Hispanic. Get it? And TX outscores Okie all ways to Sunday.

        http://nces.ed.gov/nationsreportcard/statecomparisons/withinyear.aspx?usrSelections=1%2cRED%2c2%2c0%2cwithin%2c0%2c0

        See, this comparison stuff always underrates TX overall and it pisses me off.

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      • How could anyone think this law is constitutional?

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        • It’s a time-place-manner restriction. TPMRs are permitted. Cities have free speech zones, hospitals have quiet zones, buffers like these come out of union labor strike rules. The only ? is whether 35′ is too restrictive. My guess is that 10′-20′ is preferred by the Court.

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        • Mark:

          It’s a time-place-manner restriction.

          It seems to me to be a content restriction. The law does not prohibit anyone from being inside the zone and promoting abortion. It only prohibits them from objecting to abortions. As Justice Alito pointed out, a person is allowed to be inside the zone and remark to potential customers that this is a good place to get an abortion, but that same person is not allowed to be inside the zone and remark to potential customers that this is not a good place to get an abortion. That is a content restriction, and seems to me an obvious violation of the first amendment.

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        • The Clinic is a health care business that has a right to be there and to do business. Folks who don’t like the Clinic have a right to protest at a close enough distance that they can be heard and seen. But not so close that they interfere with the business. This is simple and well established law, and if Alito rules otherwise he singles out abortion clinics for interference of this kind.

          Surely you would agree that no one can block ingress and egress. Or do you think that in the case of an abortion clinic that is fair game? What about blocking the path from the parking lot or the sidewalk in front?

          Striking pickets used to block ingress and egress for both “scabs” and customers. These zones are to protect lawfully operated businesses and their customers without chilling the message of the protesters.

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        • Mark:

          Surely you would agree that no one can block ingress and egress.

          Sure. But there is no suggestion that the plaintiff was doing any such thing. She was not preventing anyone from going into the clinic. All she was doing was trying to engage women who were going into the clinic in individual, consensual conversation. Which anyone is allowed to do under the law except, apparently, those whose conversation the law disapproves of, ie conversation which includes trying to convince a woman not to get an abortion and offers of financial help if she chooses not to. That is not a content neutral restriction on time/place/manner. It is a restriction on content.

          It is certainly reasonable for the law to prevent an individual from deliberately blocking public access to any legal business. And it is also reasonable to restrict a coordinated gathering of many people, which simply by virtue of its size will block access whether intentionally or not, to a specified area that maintains access. But it is wholly unreasonable to prevent an individual from trying to engage other individuals in consensual conversations on public property based on the content of those conversations.

          A law that prevents a gathering of striking union workers from blocking the entrance to a workplace is fine. A law that prevents a single union representative from standing on public property and trying to talk to individual employees about unionizing seems to me a plain violation of free speech rights.

          EDIT: I’ve read a little further, and my characterization may not be quite right. One article suggests that the law prevents anyone from “standing” within 35 feet of the entrance. If that is the case then technically it is content neutral. If that is truly the substance of the law, then it seems it could be easily thwarted simply by walking around inside the zone. I’m guessing that would not be allowed. And still, it seems plain to me that the law as applied is designed to prevent more than simply obstructing the entrance or harrassment, which is covered by other laws. In fact, it pretty much forces those who would attempt to convince women not to get an abortion to do so in an aggressive, loud and public manner rather than through quiet, personal persuasion.

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        • Scott, first of all I think 10′-20′ is appropriate and 35′ is not because of exactly what you said:

          it pretty much forces those who would attempt to convince women not to get an abortion to do so in an aggressive, loud and public manner rather than through quiet, personal persuasion.

          Conversation can be conducted within a living room’s distance without yelling, only we lawyers and stage actors speak at 35′ range.

          Second, as you have reviewed the matter you know the statute is facially neutral – here it is:

          (a) For the purposes of this section, “reproduc-
          tive health care facility” means a place, other
          than within or upon the grounds of a hospital,
          where abortions are offered or performed.
          (b) No person shall knowingly enter or remain
          on a public way or sidewalk adjacent to a re-
          productive health care facility within a radius
          of 35 feet of any portion of an entrance, exit or
          driveway of a reproductive health care facility
          or within the area within a rectangle created by
          extending the outside boundaries of any en-
          trance, exit or driveway of a reproductive
          health care facility in straight lines to the point
          where such lines intersect the sideline of the
          street in front of such entrance, exit or drive-
          way. This subsection shall not apply to the fol-
          lowing:—
          (1) persons entering or
          leaving such facility;
          (2) employees or agents of such facility act-
          ing within the scope of their employment;
          (3) law enforcement, ambulance, fire-
          fighting, construction, utilities, public
          works and other municipal agents acting
          within the scope of their employment; and
          (4) persons using the public sidewalk or
          street right-of-way adjacent to such facility
          solely for the purpose of reaching a desti-
          nation other than such facility.
          * * *
          (d) Whoever knowingly violates this section
          shall be punished, for the first offense, by a fine
          of not more than $500 or not more than three
          months in a jail or house of correction, or by
          both such fine and imprisonment, and for each
          subsequent offense, by a fine of not less than
          $500 and not more than $5,000 or not more than
          two and one-half years in a jail or house of cor-
          rection, or both such fine and imprisonment.

          Third, that does leave the possibility that it is not being neutrally applied and I do not know the state of those facts.

          The state cites a history of violence outside these clinics before the law was enacted. As you know, statutes need only have the barest rational basis. But the First Amendment right to make your political or religious position known to a relevant listener cannot be limited for content, but only regulated for TPM. Thus I look at this statute and think “35′ is too far”. Pickets and labor organizers often get the benefit of 10′.

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        • Mark:

          The state cites a history of violence outside these clinics before the law was enacted.

          From what I understand, prior to the enactment of this law, MA had a law similar to the Colorado law, upheld by the Supremes, that required an 8 foot roving buffer around anyone wishing to enter a clinic. Apparently one of the Justices asked the MA attorney to identify an act of violence that had occurred at a clinic (apart from the abortions themselves, presumably) between the enactment of the roving buffer and the enactment of the new, 35 foot buffer. He couldn’t name a single one.

          The National Abortion Federation has compiled a list of violent incidents at clinics across the nation. It lists only 2 such incidents in MA, the most recent of which occurred 20 years ago.

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        • Good to know. Who went to the Lege for the big buffer – the cops or the clinics? Not that it should make a difference, but as an ex-prosecutor, I am always interested. Have you read about the history? I took the statute from the Plaintiff’s brief, but I have not read the actual history.

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        • Mark:

          Who went to the Lege for the big buffer – the cops or the clinics?

          I’m not sure, but this article mentions a pre-passage hearing in 2007 in which the police talked about the difficulties of enforcing the floating buffer. (For what it is worth, I think the Supremes got it wrong on that law, too.)

          The article also mentions that the clinic employs an “escort” whose job is to accompany clinic customers through the 35 foot buffer zone, which the law allows – employees of the clinic are exempt from the law. This, presumably, is what prompted Alito’s observation that the law is not content neutral. A person whose job is to promote clinic business – abortion – is allowed to talk personally to potential patients, but a person who is opposed to clinic business is not allowed to talk personally to potential patients.

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        • Advocates of a national curriculum:

          Should this be on it?

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  6. Proof the community reinvestment act is bullshit:

    http://www.reuters.com/article/2014/01/16/us-usa-economy-housing-idUSBREA0F18U20140116?feedType=RSS&feedName=everything&virtualBrandChannel=11563

    See, when you make a secured loan, you take into account the probability you will be paid, along with the downside if you are not.

    The racial hucksters who push this shit imagine it is all about FICO (ie probability of being paid) and if there are any differences, then it is racism. As if a foreclosure in Greenwich CT has the same percentage downside (severity) as a foreclosure in Detroit Michigan or Harrisburg PA.

    Of course this is still all about Wall Street Sharpies victimizing people, isn’t it?

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  7. “ScottC, on January 16, 2014 at 12:20 pm said:

    jnc:

    The notion that a board of government appointed bureaucrats can ever be “independent” of any kind of outside influence and as a result best able to set prices for a good or service at the “right” level is nuts. “

    Not entirely. That’s actually one of the criticisms of the EU’s bureaucracy, namely that it’s detached, insular, and completely lacking in democratic accountability.

    The more cogent point is that if they are actually independent and immune from outside influence, then they are just as likely, if not more so to act in their own self interest instead of the public interest.

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    • jnc:

      The more cogent point is that if they are actually independent and immune from outside influence, then they are just as likely, if not more so to act in their own self interest instead of the public interest.

      Maybe “outside influence” wasn’t the best term. What I meant is that they are always and necessarily influenced by something…money, politics, ideology, electoral math, self interest. Even if they sincerely believe they are acting in the “public interest”, they are still necessarily being influenced by some people and not others.

      This notion of an “independent” government body begs the question…independent of what? Any body that is designed to be “independent” of political influence will be, of necessity, also independent of any public accountability for what it does. And it can never be independent of the innumerable motives – whatever they may be – of the individuals that make it up.

      That, of course, is wholly apart from the folly of any government body attempting to fix prices for things in the absence the knowledge that can only be conveyed by free market prices for those things.

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  8. So, there is no level of debt that’s too high and there is no level of growth to low to effect the continued accumulation of debt.

    http://hotair.com/archives/2014/01/16/insurers-spending-seven-figures-to-stop-medicare-advantage-cuts/

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  9. I wish they had that when I was in school cause I was gettin’ nothen’

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    • McWing:

      I wish they had that when I was in school cause I was gettin’ nothen’

      It would have just made me feel worse. I wasn’t gettin’ nothin’ either, but at least I wasn’t aware of half the stuff I wasn’t gettin’.

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  10. Those who passed this evil should be prosecuted, no?

    http://onforb.es/1jdrgUv

    If not, why not?

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    • I watched a documentary on Netflix earlier today called Cleanflix, about a now mostly defunct service that flourished in the early to mid 2000s and which offered edited versions of R and PG-13 rated movies on DVD, removing content and language to make movies more “family friendly”. It was centered in Utah primarily servicing the Mormom community. I had previously been totally unaware of such a business, I guess because I lived overseas during the time in which it was flourishing.

      Eventually court rulings shut the business down as the result of a lawsuit involving Hollywood and the Director’s Studio Guild, which is actually what I found most interesting about the story. The business model of Cleanflix was based on what they called a “one-to-one” model, which meant that, rather than taking a single copy of a movie, digitally editing it, and then producing a bunch of copies of the new version to sell/rent, what they actually did was purchase an original version of the DVD for every disc of the edited version that they sold or rented. This allowed them to avoid the charge of violating any copyrights, and present the business as simply altering each individual DVD, which was owned by the individual buyers and not the movie makers, with the consent of the legitimate owner. It also allowed them to argue that they weren’t actually costing the studios/movie makers any money.

      Seems to me to be an ingenious and legitimate argument. Not to mention a customer service that is much in demand. What is wrong with this business?

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  11. Well, they were Mormon, not Muslim, so strike 3.

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  12. Really interesting.

    In a 2012 paper titled “Explaining Recent Trends in the U.S. Teen Birth Rate (PDF),” Kearney and Levine note that explicitly didactic interventions into teen pregnancy issues such as “abstinence only education or mandatory sex education” had no role in the long-term decline. Rather, they argue that reductions in welfare benefits and access to birth control via Medicaid account for 12 percent of the decline since 1991. More important, “weak labor market conditions, as measured by the unemployment rate, do appear to lead to lower teen birth rates and can account for 28 percent of the decline in teen birth rates since the Great Recession began.”

    Good Nick Gillespie piece on TV and chicks getting knocked up.

    http://www.thedailybeast.com/articles/2014/01/18/16-and-abstinent.html

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  13. Why do progressives desire to silence dissent? It just baffles me. Is their no faith in progressive ideals or what?

    http://www.salon.com/2014/01/18/lets_nationalize_fox_news_imagining_a_very_different_media/

    Any help would be appreciated here, in all sincerity.

    Like

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