Morning Report – Snowmageddon issue 2/13/14

Vital Statistics:

Last Change Percent
S&P Futures 1812.7 -4.4 -0.24%
Eurostoxx Index 3074.2 -20.7 -0.67%
Oil (WTI) 100.2 -0.1 -0.14%
LIBOR 0.236 0.000 -0.11%
US Dollar Index (DXY) 80.33 -0.347 -0.43%
10 Year Govt Bond Yield 2.74% -0.02%
Current Coupon Ginnie Mae TBA 106 0.3
Current Coupon Fannie Mae TBA 104.5 0.3
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.28
Markets are lower this morning after a lousy retail sales number. Bonds and MBS are up small. Initial Jobless Claims came in at 339k.
Another major snowstorm has hit the New York area today, so expect volumes to be on the light side and rates to be a little more volatile than normal.
The low retail sales number was based on bad weather, so it might be tough to read too much into it.
Big merger in the cable TV space – Comcast is buying Time Warner cor $45 billion. Gives the arbs something to chew on for a while. And brings the NFL network to the New York area.
Delinquencies continue to drop. According to TransUnion, only 3.85% of mortgages were 60 days down, the lowest in 6 years.
In a true “man bites dog” situation, Ralph Nader is contesting the effective nationalization of Fannie and Freddie. Just before the companies started generating cash, the WH changed the rules and decreed that all funds must flow to Treasury and that they would not count as “debt repayment.” In other words, they nationalized the company without taking the existing shareholders out. The fate now resides in the courts.

14 Responses

  1. FIRST!! WOOHOO!

    Like

  2. “Comcast is buying Time Warner cor $45 billion.”

    While I don’t particularly like the government stepping in and telling companies they can’t buy this or that company, I would like to see more competition in this space. I don’t know how to make that happen without arm twisting somewhere (saying, telling cable companies that cannot penalize stations that sell themselves ala carte outside the cable system) but . . . but Comcast already sucks, and U-Verse already sees themselves as competing on being “not Comcast or Time Warner” and not on price of breadth of features.

    DirectTV offers solid customer service, but ends up costing as much as cable in the long run. More importantly, their special offers and bundling options and pricing tiers are just as opaque. I sign up for DirectTV, it’s not entirely clear to me how much I’ll actually be paying per month at the outset, much less how much I’d be paying a year from now.

    I really wish U-Verse was more aggressive, but AT&T remains reactive in the market, it seems to me. They are finally offering deals on 3G data that don’t suck, because T-Mobile was moving after them aggressively. Which would never have happened, if they had been allowed to buy them . . .

    So there is certainly an argument regarding the value of competition to consumers in preventing an AT&T from buying a T-Mobile. But I don’t believe there is anywhere that in the cable business that Time Warner competes directly with Comcast (indeed, Comcast here was Time Warner and Comcast just bought their regional operation here, meaning again no head-to-head competition).

    However, as entertainment turns more mobile and wireless and Internet based, there will be more competitive options, so I guess things will improve. One can hope, anyway!

    It will be interesting. I always thought Time Warner was a horrible cable company. I now thing Comcast is a less horrible cable company (that is, customer service is still horrible and painful, but we need it less frequently). Pricing tiers are opaque and their new policy of penalizing Netflix and Hulu users (I’m sorry, I mean, of charging people extra for data consumption over 300 gb) is understandable, but irritating, and again, how they track the data is entirely opaque. I used 500 gb of data? Doing what? I don’t know. They can’t tell me. They just say I did, and bill me for it. Throttling bandwidth is preferable to that, IMO.

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  3. But Republicans are anti-science.

    For decades, a series of studies have raised red flags. Surgery patients, cancer victims, and transplant recipients who were enrolled in the program were all found to fare worse—not merely than privately-insured patients with presumably easier lives, but worse than equally poor people who lacked any insurance at all. This literature was capped off by the landmark “Oregon study,” a brand-new analysis that marshals gold-standard methodology to compare Medicaid recipients with uninsured people.

    http://thefederalist.com/2014/02/12/the-party-of-science-has-absolutely-no-clue-what-its-talking-about/

    Like

    • Everybody is anti-science (even on non-partisan issues) when they don’t like the conclusions of the science, or really like what the quack-science says, even though the evidence is thin or contrary. “Anti-science” is what liberals call conservatives who are on the wrong side of an issue (even if, like stem cell research, they are at least as wrong headed).

      But I think it’s an honest assessment. I’ve had reasoned discussions with liberals about the Republican anti-science position on stem cells, which came down to a literal inability to see or consider the possibility that they were making way too big a deal about it, and that in the end the Republican position in opposition to funding very much research into fetal stem cells was going to make no difference to either the march of scientific progress or fetal stem cell research—which was still perfectly legit and possible in America (just not with federal money) and bankrolled by governments all over the world and . . .

      Point being, the rational, objective position for a pro-stem-cell research person should have always been: well, that’s irrelevant. On to other things that have some meaning. But it’s not, because it’s not about research or science, it’s about playing politics.

      I love this argument, too: well, of course they are anti-science. They think they earth is 5000 years old. They don’t believe in evolution. They don’t believe in Global Warming. As if these are all the same thing, and that everybody who doesn’t share their exactly beliefs on every issue is, by default, a slack-jawed young earth Creationist. That is, the equation is: don’t believe the government should be funding fetal stem cell research or passing laws to reduce “climate change”? Then you also believe the earth was created by a bearded man in white robes about 5000 years ago. There is no difference in those beliefs.

      Also, if you believe in Intelligent Design, you’re anti-science. Because, you know, it’s obvious just by looking at the universe and physical laws that it’s all entirely random. That’s scientific!

      BTW, humanity is terrible at accepting statistical truths. As they do not feel intuitively correct (more healthcare must mean healthier people and longer lives!) then we tend to continue to act and govern as if our intuitive, but demonstrably incorrect, beliefs are true.

      Like

  4. @Kevin, the deal will have to be approved by the FCC and either FTC or DOJ for antitrust. State regulatory approval might be needed as well.

    The companies are forecasting an end-of-year close, which means they are factoring in a lengthy regulatory review.

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  5. @Brent: “@Kevin, the deal will have to be approved by the FCC and either FTC or DOJ for antitrust. State regulatory approval might be needed as well.”

    This is a case where for other more byzantine reasons there’s really no head-to-head competition anyway, so I’m not sure what the difference in the marketplace will ultimately be.

    I don’t know the current state of the industry in any detail, but I know when Cablevision set up in Memphis in the 1970s, before Time Warner bought them in the late 80s, they got exclusive right-of-ways so even if another company had wanted to come to town and roll out miles of coax cable for their competing cable service, it was against the frackin’ law (back to my argument about how the vast majority of monopolies require government collusion to exist), the utilities were forbade from giving them access, etc. Arguably, this was in order for Cablevision to secure investors, who didn’t want to throw millions of dollars into a less-than-sure thing. This apparently played out across the country, so when it comes to television delivered via coaxial cable, most areas have a single provider.

    Fortunately, Comcast is probably way more important now for their Internet services, and there are alternatives. Not perhaps as many as I’d like, but there are alternatives.

    And despite U-Verse not being that competitively aggressive, Comcast has felt the pressure and has rolled out bundles that are attractively priced. Including one here, which I tried to sign up for, because it was advertised on my cable bill, but that I could not sign up for on the website and nobody I talked to seemed to be able to figure it out. Eventually I got a pricing discount that got me to the same service level, but Comcast still kind of sucks when it comes to customer service.

    …. I’ll be interested to see if the acquisition is successful. It might end up being positive, who knows? Bigger is not always badder.

    Like

  6. Somebody post this at PL!

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  7. To Brent’s point aboot (Canadian pronunciation) about CBO’s scoring of The Abomination and it’s effects on jobs and the economy.

    Like

  8. Worth noting:

    “As Health Care Shifts, U.S. Doctors Switch to Salaried Jobs

    By ELISABETH ROSENTHALFEB. 13, 2014”

    http://www.nytimes.com/2014/02/14/us/salaried-doctors-may-not-lead-to-cheaper-health-care.html?pagewanted=all

    Like

  9. I love that hack Sargent is quoting this guy, “ob Jesmer, who was executive director of the NRSC from 2008-2012.”

    How did the Republicans do electorally in those two cycles?

    http://m.washingtonpost.com/blogs/plum-line/wp/2014/02/13/waiting-on-immigration-is-a-crazy-move-for-gop/

    Hack Sargent’s concern for Republican electoral prospects is touching.

    Does he lack any level of self awareness? Or is this just red meat for his rube readers?

    Like

  10. This paragraph in the context of this article leaves me dumbfounded.

    “I honestly thought from my own standpoint that the vast majority would register,” said Sen. Tony Guglielmo, R-Stafford, the ranking GOP senator on the legislature’s public safety committee. “If you pass laws that people have no respect for and they don’t follow them, then you have a real problem.”

    http://www.nationalreview.com/corner/371093/en-masse-connecticuts-gun-owners-defy-new-registration-law-charles-c-w-cooke

    Like

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