Morning Report – Takeaways from Friday’s jobs report 2/10/14

Vital Statistics:

Last Change Percent
S&P Futures 1789.8 -3.7 -0.21%
Eurostoxx Index 3036.5 -2.0 -0.07%
Oil (WTI) 99.6 -0.3 -0.28%
LIBOR 0.234 0.000 0.00%
US Dollar Index (DXY) 80.67 -0.019 -0.02%
10 Year Govt Bond Yield 2.69% 0.01%
Current Coupon Ginnie Mae TBA 106 0.1
Current Coupon Fannie Mae TBA 105 0.0
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.24
Markets are flat without a lot of news out there. Bonds and MBS are flat. The market seems to have been unsurprised by the jobs report on Friday.
The Wall Street Journal did a nice piece on the takeaways from Friday’s jobs report. Punch line: January’s report was almost as disappointing as December, but you can’t blame the weather this time around.
Sometime today, the MBA will release delinquency and foreclosure data.
The CFPB is making data from the Home Mortgage Disclosure Act available on line. It is a way to compare fees and points charged to borrowers. It will also be used by regulators to determine which branches they want to hit. For lenders, it is a good way to gain insight into how you stack up in your geographic area.
Consumer Credit jumped in December, a potentially positive sign for the economy.

51 Responses

  1. How many on the left confuse a desire for smaller government, a less interventionist government, for hatred of government?

    Instead, they were coming around to the principles of the anti-government economics of Austrians Friedrich A. Hayek and Ludwig von Mises.

    Is this what you’re taught? It’s just dumb.

    and their sweeping hostility to any actions by government to keep downturns from becoming catastrophes or to promote greater economic fairness.

    How is this in any way “anti-government?” See, Dionne actually doesn’t believe the hyperbole, but he thinks your stupid enough to believe it.

    he was reflecting an insight embraced across partisan lines. Government’s exertions, both during the New Deal and more completely during World War II, helped rescue the U.S. economy from depression.

    What’s fascinating is that there is no evidence for Dionne’s assertions re the depression and government interference. Yes, it is an article of faith among the left but that doesn’t mean it’s true. It’s like the leftist assertion that Kennedy was a great President. Where’s the evidence?

    http://m.washingtonpost.com/opinions/ej-dionne-jr-an-economic-school-has-led-to-gridlock-in-washington/2014/02/09/12de8df0-9020-11e3-b46a-5a3d0d2130da_story.html?wpisrc=nl_opinions

    Oh, and Frist!

    Like

  2. FDR’s Treasury Secretary Henry Morganthau in 1939 – testimony in front of the House Ways and Means Committee:

    “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong…somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises…I say after eight years of this administration we have just as much unemployment as when we started…And an enormous debt to boot!”

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  3. And by the way, the New Deal “worked” only if you consider taking the unemployment rate from 25% to 16% over the course of 7 years “working.”

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  4. ” hostility to any actions by government to keep downturns from becoming catastrophes”

    Hayek was trying to prevent the downturn in the first place!

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  5. Hayek was trying to prevent the downturn in the first place!

    ur stoopid bagger

    Like

  6. Glenn Greenwald’s new site is up:

    https://firstlook.org/theintercept/2014/02/10/welcome-intercept/

    Today’s windmill at PL: Trying to convince them that the underground economy’s growth is a supply side, not a demand side argument.

    http://www.cnbc.com/id/100668336

    Like

    • jnc (frmo the cnbc link):

      “Those working and not paying the taxes puts the burden on those who pay the tax,” added Fiorenza. “Taxes could be lower if the government where able to capture the underground economy instead of raising taxes on those currently paying the various income and payroll taxes.”

      The never ending inability to sort cause from effect.

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  7. speaking of stoopid.
    Harold Meyerson’s latest. Why I read this with my morning coffee the other day …

    “Republicans have never felt notably fond of Waxman. When news of his retirement was announced at the House Republicans’ annual retreat last week, it reportedly was greeted with a standing ovation. That’s partly because Waxman has been an effective partisan warrior whose oversight hearings during George W. Bush’s presidency embarrassed the GOP, and partly because he played a major role in passing the Affordable Care Act. But on a deeper level, it’s hard to think of another legislator whose record more decisively consigned the Republican right’s favored ideology — libertarianism — to history’s dustbin.

    After all, would a libertarian favor government regulations that cleaned the air? That made drinking water safer? That told people what was in their food? That entitled poor children to checkups? The libertarian position is that the market will take care of these things. Of course, the reason all those regulations became law was precisely because the market doesn’t take care of such things.”

    http://www.washingtonpost.com/opinions/harold-meyerson-henry-waxman-liberalisms-legislative-genius/2014/02/05/b84daa00-8dd7-11e3-98ab-fe5228217bd1_story.html

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  8. @novahockey: “After all, would a libertarian favor government regulations that cleaned the air? That made drinking water safer? That told people what was in their food? That entitled poor children to checkups? The libertarian position is that the market will take care of these things. Of course, the reason all those regulations became law was precisely because the market doesn’t take care of such things.””

    Because libertarians are opposed to clean air and water and (for cripes sakes) disclosure about what we eat. So we could be eating pencil shavings and cow brains, and we’d have no idea because libertarians don’t give a shit what’s in their food.

    Oldest, most cliched, most idiotic trop in the books: people I don’t agree with hate clean air and water and puppies and rainbows!

    Like

  9. @ScottC: ““Those working and not paying the taxes puts the burden on those who pay the tax,””

    If we get rid of illegal activities, such as prostitution and drug sales, how big a problem is this, really? And is there more or less under-the-table construction work now than there was 20 years ago or 40 years ago?

    And it would be easy to capture tax revenues of illegal drugs and prostitution. Legalize and license!

    … and if you make a habit of not paying taxes, the IRS comes after you. It’s hard to operate a large legitimate business and pay everybody under the table and not have the IRS end up owning all your assets.

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  10. @Brent: “And by the way, the New Deal “worked” only if you consider taking the unemployment rate from 25% to 16% over the course of 7 years “working.””

    And that’s only if you assume the New Deal is what turned the tide, and I think that’s doubtful. Time an innovation in products and services helped turned that tide. While I think there may have been financial benefits in the long run to certain New Deal programs. The infrastructure work of the Works Progress Administration, for example. But I think that would have been more slow growth, and hard to measure, at any rate. But I expect the Eisenhower Interstate system had a huge net economic benefit to our country in a similar way. One equally hard to accurate measure, since we have no control group to compare it to.

    The New Deal had it’s desired result, though (I think): it kept Roosevelt in office until he died, made the U.S. government permanently a more progressive form of government and began the long, slow march towards to more security (insured by the government) and a larger entitlement mentality on the part of the electorate.

    Like

    • Kevin:

      The New Deal had it’s desired result, though (I think): it kept Roosevelt in office until he died, made the U.S. government permanently a more progressive form of government and began the long, slow march towards to more security (insured by the government) and a larger entitlement mentality on the part of the electorate.

      Or, as BO might have put it, it fundamentally transformed the nation.

      Like

  11. For a discredited ideology that’s been consigned to history’s dustbin, libertarianism sure does get a lot of commentary from various progressives.

    Like

  12. The underground economy seems to be the classic supply side argument.

    Labors who find it worth while not to supply labor at after tax rates do find it worth while to do so if there are no taxes taken out.

    Homeowners who would forgo building a deck with the full load of taxes and regulatory costs built into the labor cost will do it under the table at a lower price point.

    Brent – let me know if I’m wrong on my reasoning here.

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  13. In FDR’s case, it wasn’t hubris.

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  14. @Troll: “How many on the left confuse a desire for smaller government, a less interventionist government, for hatred of government?”

    I think it’s charitable to call it “confusion”. The best it can be called is “intentionally obtuse”. It’s the obverse of saying a quasi-socialist/pacifist hates America based on the fact that they want more government social programs and less military defense.

    The fact is, these people, generally, don’t say anything that suggests they hate government or America. They might hate American military adventurism or the effort to grow government and have it take over healthcare, let’s say, but that’s not “hating government” or “hating America”. It’s hating government-controlled healthcare or Wars of Choice, which is not the same thing. And I think most of the people who accuse their opposites of “hating America” or “hating government” or “hating happiness and rainbows” know what they are doing, at some level, at least.

    “What’s fascinating is that there is no evidence for Dionne’s assertions re the depression and government interference. Yes, it is an article of faith among the left but that doesn’t mean it’s true. It’s like the leftist assertion that Kennedy was a great President. Where’s the evidence?”

    While I agree that there’s no evidence government interference did anything but potentially lengthen the Great Depression (at, lets be fair, the insistence of the electorate), there’s plenty of evidence Kennedy was a great President. He was getting blow jobs from Marylin Monroe in the Whitehouse while the press watched and nobody knew a damned thing for 20 years. Any one of those things would have made him a great president.

    Now, what there isn’t much evidence of is that Kennedy was a liberal president. He was moderate conservative (very conservative as far as tax policy at the time is concerned, or was at least convinced to adopt a conservative tax policy) and he was a hawk. If a Ronald Reagan had “led” us through something like the Cuban Missile Crisis, he’d be called History’s Greatest Monster right now. He was staunchly anti-Communist, which would have him kicked out of any self-respecting liberal’s cocktail party, even today.

    Like

  15. @ScottC: “Or, as BO might have put it, it fundamentally transformed the nation.”

    There ya go. Problem is, when that becomes a goal in and of itself, bad things can happen. 😉

    Like

  16. @markinaustin: “KW – I have read estimates as high as $40B in revenue if MJ were regulated like tobacco.”

    I’m sure of it. Which is why, for my question, I extracted illegal drugs and prostitution. That stuff is black market because it’s illegal . . . which is not that bright. Legalize MJ. Cheap to produce, tax it highly, and it’s a revenue generator. And then the anti-pot campaigns can replace the anti-smoking campaigns. Lots of crap in MJ smoke, too. 😉

    Like

  17. Well, if you tax dope at a high rate you generate high rates of underground commerce, no?

    Like

    • McWing:

      Well, if you tax dope at a high rate you generate high rates of underground commerce, no?

      Yes, but not as much as it would be when it is illegal.

      Like

  18. That leaves close to 15 percent of federal taxes owed that are never paid—about $385 billion a year. If that $385 billion were collected, it could fund universal pre-K for 4-year-olds, double the size of both the Earned Income Tax Credit and the U.S. Air Force budget, and reduce the deficit by more than a quarter—all at the same time.

    Jesus, just reducing the deficit? That’s like reducing the crippling, enslaving debt we’ve left out children by .05%.

    That’s why you should NEVER readily supply ANY government more money that it absolutely needs. Einsteins like this think it’s a license to spend it on the equivalent of hookers and cocaine.

    http://mobile.businessweek.com/articles/2014-02-10/how-to-get-tax-cheats-to-pay-their-share

    Like

  19. JNC — PL is simply not usable with that system.

    Like

  20. Figures he would end up being the poster boy for abuse of deferred prosecution agreements:

    “Chris Christie’s long record of pushing boundaries, sparking controversy
    By Carol Morello and Carol D. Leonnig, Updated: Monday, February 10, 2:05 PM

    As the top federal prosecutor in New Jersey, Chris Christie struck an unusual deal with Bristol-Myers Squibb.

    In exchange for not charging the drug-making giant with securities fraud, Christie’s office would require it to fund a professorship at Seton Hall University’s law school — Christie’s alma mater.”

    http://www.washingtonpost.com/local/chris-christies-long-record-of-pushing-boundaries-sparking-controversy/2014/02/10/50111ed4-8db1-11e3-98ab-fe5228217bd1_story.html?hpid=z1

    Like

  21. So granny gets no hospital care until Jr. at PS 46 quits coloring outside the lines.

    Don’t test me punk!

    Like

  22. Forget repeal, Obama and the D’s are doing for us.

    Why do Democrats hate employees of small business and want them to die?

    Serious question.

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  23. Can’t let it take effect before the election. Then people might vote based on it.

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  24. There’s always a next election.

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  25. “And, a senior official noted when asked what legal authority the administration had to give the year reprieve to smaller businesses, “We’ve done it in a bunch of other areas “”

    Like

    • Yeah, I read that. I meant any precedent outside of Obama’s own history. Has any president simply ignored the laws he was charged with enforcing to the degree this president has?

      Like

  26. “Whitaker. Motherfucking. Chambers, on February 10, 2014 at 3:31 pm said:

    There’s always a next election.”

    He’s out of office in 2016. Then it’s HRC’s problem.

    Like

  27. When the President does it, that means it is not illegal.

    he’s Nixon. ha, fucking, ha.

    Like

  28. It’s the “fuck you that’s why” precedent. See Wilson, Woodrow.

    Like

  29. Krugman admits the obvious:

    “It helps, I’d argue, if you think of the American population as comprising two groups: those who receive subsidies toward their health insurance and those who don’t – the subsidized and the subsidizers. In reality these categories are arguably a bit more complex than a mere matter of monetary transfers, since Obamacare also in effect subsidizes those in poor health by charging them the same premiums as the healthy. But I don’t think this changes the point.

    So, we know that Obamacare has costs to the subsidizers, in the form of the subsidies that must be paid – about 0.9 percent of GDP — and that eventually must be reflected in higher taxes or lower spending than would otherwise take place. These subsidies correspondingly represent benefits to the subsidized; yes, Virginia, it’s redistribution, although many people who end up subsidizing rather than subsidized were at risk of being on the other side, and will therefore gain from the insurance aspect.”

    http://krugman.blogs.nytimes.com/2014/02/10/why-do-you-care-how-much-other-people-work/

    ” the subsidized and the subsidizers”

    Or as I like to call them, the PPACA winners and the PPACA winners.

    However I don’t understand what he means here:

    “What about the subsidizers? Don’t say that it’s obvious that they are hurt – remember, we’re talking about additional costs over and above the cost of the subsidies.”

    How is it not obvious if they are in fact paying higher taxes than would otherwise take place, or is he arguing that if people leave the work force it doesn’t impose a cost on someone else from the mere fact that they have left the work force. That I can see.

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    • jnc (from Krugman):

      although many people who end up subsidizing rather than subsidized were at risk of being on the other side, and will therefore gain from the insurance aspect.”

      Nope. Since they were compelled to subsidize rather than choosing to, one cannot say they gain from the “insurance aspect”.

      Like

  30. Too big for quote of the day, but I still like it nonetheless:

    “An ACT of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority. The obligation of a law in governments established on express compact, and on republican principles, must be determined by the nature of the power, on which it is founded. A few instances will suffice to explain what I mean. A law that punished a citizen for an innocent action, or, in other words, for an act, which, when done, was in violation of no existing law; a law that destroys, or impairs, the lawful private contracts of citizens; a law that makes a man a Judge in his own cause; or a law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers; and, therefore, it cannot be presumed that they have done it. The genius, the nature, and the spirit, of our State Governments, amount to a prohibition of such acts of legislation; and the general principles of law and reason forbid them. ”

    CALDER v. BULL, 3 U.S. 386 (1798)

    http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=CASE&court=US&vol=3&page=386

    Like

    • To our legal brethren:

      Are there any legal steps that can be practically undertaken to prevent Obama’s clear disregard of the written law?

      If not, is there anything to prevent a future president from suspending the enforcement of the American Taxpayer Relief Act of 2012, and “delaying” the expiration of the Bush tax cuts, effectively bringing the top income tax rate back to 35%?

      Like

  31. The House debt limit bill includes a fund for an SGR offset. either short-term or for a permanent fix.

    Like

  32. “If not, is there anything to prevent a future president from suspending the enforcement of the American Taxpayer Relief Act of 2012, and “delaying” the expiration of the Bush tax cuts, effectively bringing the top income tax rate back to 35%?”

    Threat of impeachment and/or political consequences.

    As we all know, if it was a Republican president delaying these provisions, it would be considered sabotage and an impeachable office.

    And of course this requires linking to the Beastie Boys.

    Someone should upload a YouTube parody with actual PPACA news footage spliced in with all the various delays and regulatory changes.

    Like

    • jnc:

      Threat of impeachment and/or political consequences.

      Perhaps as a political matter it would be a bad idea, but the House should definitely impeach him at this point.

      Beyond that, though, could an employee who was due to get employer provided insurance as a result of the O-Care mandate sue the president or the department of justice for failing to enforce the law?

      Like

  33. Sure. They will play the standing games though.

    They would have had a better cause of action after open enrollment ended for the individual exchanges, but that’s probably part of the reason why the announcement was made now.

    Edit: the other point, and probably only NoVA has done a deep enough dive for this, is how “black letter” the dates were in the law and if the departments have explicit authority to make changes in the rules writing process. Never underestimate Congress’ willingness to over delegate.

    Also one other tool available is for Congressional oversight of the executive’s implementation. However, Democrats are for the law and in the same party as the President and will therefore not make a big deal about these changes and Republcians oppose it entirely and thus it’s just the usual food fight with them.

    Issa hasn’t been particularly effective at oversight, and anyway, it’s the Senate with the confirmation power that has the real leverage with oversight.

    Like

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