Morning Report – Fannie and Fred will continue for a while 1/31/14

Posted on January 31, 2014 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1761.9 -19.3 -1.08%
Eurostoxx Index 2974.7 -52.6 -1.74%
Oil (WTI) 97.39 -0.8 -0.86%
LIBOR 0.237 -0.001 -0.42%
US Dollar Index (DXY) 81.23 0.140 0.17%
10 Year Govt Bond Yield 2.65% -0.04%
Current Coupon Ginnie Mae TBA 106 0.1
Current Coupon Fannie Mae TBA 104.7 0.2
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.31
They’re beating the tape with the ugly stick as emerging markets continue to get clobbered. Bonds and MBS are rallying, with the 10 year trading at 2.65%.
We had some mixed earnings reports, with good news out of Google, a miss out of Mastercard, and a warning from Wal Mart.
Personal income came in flat in December (versus a .2% forecast), while personal spending rose .4%. The savings rate dipped to 3.9%. As I have said before – this is how recessions end. Spending increases and then wages increase. The PCE deflator came in in at 1.1%, showing inflation remains a non-problem.
Squabbling among Senate Democrats probably means that nothing will get done about the GSEs this year. Left wing Democrats like Elizabeth Warren and Sherrod Brown will refuse to back any plan to re-organize the GSEs unless it guarantees affordable loans for most buyers. This means they want whatever entity that replaces Fannie and Fred to be more than simply a re-insurer of privately insured mortgages – they want to continue the social engineering role of the GSEs. Not all Democrats are onboard with this idea, let alone Republicans who rightly view government activism as a contributor to the housing bubble. The left would be more than happy to continue the status quo, with Mel Watt (a CRA guy) running the show.

Filed under: Morning Report |

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60 Responses

  1. Whitaker. Motherfucking. Chambers, on January 31, 2014 at 9:41 am said:

    20 years a schoolin’ and they put ya on the day shift.

    Like

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    • ScottC, on January 31, 2014 at 10:31 am said:

      McWing:

      Will Teh Krugman remain consistent?

      One of the implications of what Krugman says is very interesting, and almost certainly not something Krugman would ever acknowledge. If it is true that:

      an immigrant worker is paid roughly the value of the additional goods and services he or she enables the U.S. economy to produce. That means that there isn’t anything left over to increase the income of the people already here.

      …and it is also true that:

      My second negative point is that immigration reduces the wages of domestic workers who compete with immigrants. That’s just supply and demand: we’re talking about large increases in the number of low-skill workers relative to other inputs into production, so it’s inevitable that this means a fall in wages.

      …then it must be true that low-skill domestic workers are actually being paid more than the additional value of the goods and services they allow the US to produce, and are hence a drag on the economy, particularly relative to immigrants.

      Consider the implications of that on Krugman’s advocacy for a higher minimum wage.

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  3. Brent Nyitray, on January 31, 2014 at 10:40 am said:

    “Consider the implications of that on Krugman’s advocacy for a higher minimum wage.”

    Krugman acknowledges the laws of supply and demand also apply to the labor market? Wow… that’s progress

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  4. lmsinca, on January 31, 2014 at 10:44 am said:

    As I have said before – this is how recessions end.

    Damn, it’s been a long one though!

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  5. Whitaker. Motherfucking. Chambers, on January 31, 2014 at 11:03 am said:

    Gotta admit that the Progressive’s faith in the CBO is fascinationg. GIGO doesn’t apply here I guess. Didn’t Obamacare teach us anything?

    http://m.washingtonpost.com/opinions/ruth-marcus-on-fiscal-issues-obama-has-only-silence/2014/01/30/a93eef1c-89e3-11e3-833c-33098f9e5267_story.html

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  6. Whitaker. Motherfucking. Chambers, on January 31, 2014 at 11:59 am said:

    I would love one of our Progressives here to watch this clip from the daily show and comment on Rep. Pelosi’s responses. Was Stewart fair in his questioning? Was Rep. Pelosi honest in her answers

    http://www.mediaite.com/tv/stewart-laughs-in-pelosis-face-after-she-admits-she-doesnt-know-why-obamacare-site-failed/

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  7. Whitaker. Motherfucking. Chambers, on January 31, 2014 at 12:43 pm said:

    I saw that. Made me think of The Longest Yard!

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  8. novahockey, on January 31, 2014 at 1:25 pm said:

    I’ll admit it. I liked the Replacements, with the chain-smoking British kicker.

    Like

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  9. Whitaker. Motherfucking. Chambers, on January 31, 2014 at 1:31 pm said:

    What should be done with people that have more than me but don’t deserve it?

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  10. Michigoose, on January 31, 2014 at 1:39 pm said:

    jnc, you must be the world’s most patient man.

    Alethia’s version of history is certainly. . . interesting at times.

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  11. jnc4p, on January 31, 2014 at 1:58 pm said:

    Alethia is right about the particular facts about the massacres and the role of South Korea’s military dictatorship, but is intentionally being blind about the reality of the North and the Soviet Union’s planning to invade the South all along.

    It’s simply anti-Americanism masquerading as intellectual sophistication.

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  12. jnc4p, on January 31, 2014 at 1:59 pm said:

    “Brent Nyitray, on January 31, 2014 at 10:40 am said:

    “Consider the implications of that on Krugman’s advocacy for a higher minimum wage.”

    Krugman acknowledges the laws of supply and demand also apply to the labor market? Wow… that’s progress”

    No. The cited piece is from 2006.

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  13. jnc4p, on January 31, 2014 at 2:00 pm said:

    Michi, you also missed the fight yesterday with Space over the proposition that OWS is anti-capitalist.

    Apparently they are all about the free market.

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  14. novahockey, on January 31, 2014 at 2:08 pm said:

    what? did anyone else actually see OWS? I had to walk by one of their camps in DC for a few months.

    they are communists who are confused about what anarchy is.

    OWS guy: “we’re anarchist who want the state to own everything … you know the people”
    NoVA … {thinking .. oh, they’re commies. and where the hell is my town car driver?”]

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  15. jnc4p, on January 31, 2014 at 2:18 pm said:

    Apparently their actual web site is wrong too:

    “We need a break from capitalism. It has failed the 99%.”

    http://occupywallst.org/article/occupy-response-sotu-president-obama/

    Space was unpersuadable. OWS is just against crony capitalism and rent seeking but is fine with inequality provided it was earned.

    The root of the debate was arguing over whether or not President Obama was invoking OWS in his SOTU. I argued no as he gave the classic merit defense of inequality as a throw away line. Even as lip service, it was straight out of the free market boilerplate rhetoric.

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  16. jnc4p, on January 31, 2014 at 2:24 pm said:

    This should go over well with his base:

    “Report May Ease Way to Approval of Keystone Pipeline
    By CORAL DAVENPORTJAN. 31, 2014

    WASHINGTON — The State Department released a report on Friday that could pave the way toward President Obama’s approval of the Keystone XL oil pipeline.

    The long-awaited environmental impact statement on the project concludes that approval or denial of the pipeline, which would carry 830,000 barrels of oil a day from Alberta to the Gulf Coast, is unlikely to prompt oil companies to change the rate of their extraction of carbon-heavy tar sands oil, a State Department official said. Either way, the tar sands oil, which produces significantly more planet-warming carbon pollution than standard methods of drilling, is coming out of the ground, the report says.”

    http://www.nytimes.com/2014/02/01/us/politics/report-may-ease-way-to-approval-of-keystone-pipeline.html?emc=edit_na_20140131

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  17. novahockey, on January 31, 2014 at 2:27 pm said:

    That makes no sense at all. OWS is not calling for increased regulation or more oversight. It’s gussied up communism.

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  18. jnc4p, on January 31, 2014 at 2:35 pm said:

    Correct. The argument was absurd but they stuck with it. They degenerated to “Well, I and my friends went to an OWS rally so therefore OWS is about what I personally believe”.

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  19. Michigoose, on January 31, 2014 at 2:38 pm said:

    The argument was absurd but they stuck with it.

    You have to admit, Alethia is nothing if not tenacious!

    I wonder how long it’ll be before she accuses me of being a red meat capitalist again? The Libertarian Avenger arises from the ashes!

    Like

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  20. novahockey, on January 31, 2014 at 2:51 pm said:

    No shame in that.

    If you’re a communist at this point, you’re either a clown or evil. or an evil clown.

    Like

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  21. novahockey, on January 31, 2014 at 3:21 pm said:

    looks like it to me.

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  22. novahockey, on January 31, 2014 at 3:36 pm said:

    great now i’ve got this running through my head.

    Everybody loves a clown, so why don’t you?
    Everybody laughs at the things I say and do
    They all laugh when they see me comin’

    But you don’t laugh, you just go home runnin’
    Everybody loves a clown, so why can’t you?
    A clown has feelings, too

    Like

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  23. Whitaker. Motherfucking. Chambers, on January 31, 2014 at 3:42 pm said:

    Send in the clowns.

    Don’t bother, they’re here.

    Like

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  24. Michigoose, on January 31, 2014 at 3:52 pm said:

    Aletheia101
    4:49 PM EST

    Michigoose,

    I thought you were a conservative.

    That didn’t take long. . .

    And I’ll get you for that earworm, “Carl”!!

    Like

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  25. novahockey, on January 31, 2014 at 3:56 pm said:

    Like

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  27. Whitaker. Motherfucking. Chambers, on January 31, 2014 at 5:27 pm said:

    Boom

    The news will also be sobering to investors in the municipal debt market. Lending money to cities and states has suddenly become a much riskier proposition. Cities and states are going to have to pay higher interest rates as bondholders will (correctly) reason that they will be sent to the back of the line for repayment should anything go wrong.

    http://www.the-american-interest.com/blog/2014/01/31/detroit-chooses-pensioners-over-bondholders-in-debt-plan/

    Like

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  28. lmsinca, on January 31, 2014 at 6:42 pm said:

    I’ll probably have a clown nightmare now……………….wish I hadn’t read this thread or looked at Scott’s pic. I never could go to the circus!

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  31. lmsinca, on February 1, 2014 at 2:44 pm said:

    Have you guys seen this test yet?

    http://www.buzzfeed.com/ashleyperez/what-career-should-you-have

    I got: Writer

    You are a maker. Creative from the day you were born, you spend most of your time thinking about the world you live in. You are open to new ideas and value beauty and originality more than most. We both know you’re not really the office type, so give yourself some room to create. Other occupations: director, producer, advertiser.

    Like

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    • ScottC, on February 1, 2014 at 3:03 pm said:

      lms:

      You got: Professor

      You are a thinker, in constant search of knowledge and answers to life’s most illusive questions. You love to analyze everything, testing out theories and pushing mental boundaries. Basically you’re an Einstein, but then again you probably already knew that.

      Like

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  32. lmsinca, on February 1, 2014 at 3:50 pm said:

    Very close Scott except they forgot the argumentative factor. I wouldn’t take your class and you probably wouldn’t’ buy my book, haha.

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  33. lmsinca, on February 1, 2014 at 4:45 pm said:

    Lol, that’s better than what my husband said. He said he’d buy it and use it as a white elephant gift so I asked him when was the last time he actually read a book.

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  34. Whitaker. Motherfucking. Chambers, on February 1, 2014 at 6:16 pm said:

    Nightmare scenario

    You got: Humanitarian

    You are a giver, a justice seeker. You spend more time thinking about others than yourself, and more than anything just want what you’re doing to help someone in some way. Essentially, you is kind, you is smart, you is important. Other occupations: social worker, judge.

    Like

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  35. lmsinca, on February 1, 2014 at 6:20 pm said:

    Wow, McWing………………..I can’t actually think of anything else to say but WOW. Are you sure you’re not a closet …………………..Democrat!

    Like

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  36. Brent Nyitray, on February 2, 2014 at 11:36 am said:

    You got: Designer

    You are an artist, creative juices are oozing out of you. You’d make just as good of a designer as you would an architect, as long as you get to create something. You live your life like Michelangelo, constantly looking for the sculpture within the stone. Other occupations: architect, editor.

    Like

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  37. Whitaker. Motherfucking. Chambers, on February 2, 2014 at 12:46 pm said:

    Phillip Seymour Hoffman found dead in apartment.

    Like

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  38. Whitaker. Motherfucking. Chambers, on February 2, 2014 at 12:53 pm said:

    Above could be a hoax. Stand by.

    Like

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  39. Whitaker. Motherfucking. Chambers, on February 2, 2014 at 12:54 pm said:

    Here’s a post link.

    http://nypost.com/2014/02/02/philip-seymour-hoffman-found-dead-in-his-apartment/

    Ever see Before the Devil Knows your Dead? Excellent work.

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    • ScottC, on February 2, 2014 at 3:26 pm said:

      McWing:

      Ever see Before the Devil Knows your Dead? Excellent work.

      Oh yeah. Some of Marisa Tomei’s best work!

      It’s sad but OD’s by adults just make me mad.

      Especially very well off adults.

      Like

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  40. Whitaker. Motherfucking. Chambers, on February 2, 2014 at 12:56 pm said:

    I guess it’s confirmed.

    It’s sad but OD’s by adults just make me mad.

    Like

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  41. Michigoose, on February 2, 2014 at 3:11 pm said:

    Test wouldn’t open for me. 😦

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  42. Whitaker. Motherfucking. Chambers, on February 2, 2014 at 3:36 pm said:

    I go back to the OxyClean soap guy! Dudes in his late forties and still snorting coke? C’mon? You got a wife and kids! It’s embarrassing.

    Like

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  43. Whitaker. Motherfucking. Chambers, on February 2, 2014 at 3:39 pm said:

    BTW, I think it was the Oscar Wilde as dinner guest that doomed me.

    But c’mon, I’m supposed to pass that shit up? Oscar Wilde? I don’t have the strength.

    Like

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  44. jnc4p, on February 2, 2014 at 4:08 pm said:

    Drip Drip.

    “Labor union officials say Obama betrayed them in health-care rollout
    By Steven Mufson and Tom Hamburger, Published: January 31”

    http://www.washingtonpost.com/business/economy/labor-union-officials-say-obama-betrayed-them-in-health-care-rollout/2014/01/31/2cda6afc-8789-11e3-833c-33098f9e5267_story.html?tid=pm_pop

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  45. Whitaker. Motherfucking. Chambers, on February 2, 2014 at 4:40 pm said:

    The PL freaks must be shitting themselves over Volock.

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  46. novahockey, on February 3, 2014 at 7:58 am said:

    “It’s sad but OD’s by adults just make me mad.”

    Why? I immediately thought of something Kevin Smith (Silent Bob) said during one of his podcasts with Jason Mewes (Jay), a recovering addict, that i caught in person a 2-3 years ago: you want to play in an adult world, manage your shit and accept the consequences.

    And second what Scott said. Although I wonder how much a prop bet on “the first play from scrimmage will result in a safety” paid off.

    Like

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  47. Whitaker. Motherfucking. Chambers, on February 3, 2014 at 9:03 am said:

    Nova, I guess it’s more along the lines of they should know better.

    Plus, a la David Carradine, it’s embarrassing.

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  48. Geanie, on February 4, 2014 at 9:01 am said:

    I took the test. Evidently I am a Humanitarian. Sounds good to me.

    Good Morning All… and Have a Great Day!

    Like

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  49. jnc4p, on February 4, 2014 at 10:03 am said:

    How goes the appeal?

    Like

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Be kind, show respect, and all will be right with the world.