Morning Report – A look at the week ahead 3/31/14

Vital Statistics:

 

  Last Change Percent
S&P Futures  1861.1 10.7 0.58%
Eurostoxx Index 3178.3 5.9 0.18%
Oil (WTI) 101.6 -0.1 -0.06%
LIBOR 0.231 -0.003 -1.18%
US Dollar Index (DXY) 80.05 -0.124 -0.15%
10 Year Govt Bond Yield 2.76% 0.03%  
Current Coupon Ginnie Mae TBA 105.1 -0.2  
Current Coupon Fannie Mae TBA 103.8 -0.2  
RPX Composite Real Estate Index 200.7 -0.2  
BankRate 30 Year Fixed Rate Mortgage 4.34    

 

Feels like a little end-of-quarter window dressing as the SPUs are up 11 points on no real news. (No, a strong ISM Milwaukee report doesn’t count). Bonds are getting hit as well. 
 
The ISM Milwaukee report jumped from 48.6 in February to 56 in March. New Orders and production rose 19 points. Could this be a weather-related rebound? Perhaps. However, note that we are starting to see other data points (Kansas City Fed) showing that the Midwest may be waking up. 
 
Lots of important data this week, starting with the ISM and construction spending tomorrow. Then on Friday we get the jobs report. The Street is at 200k nonfarm payrolls, and an unemployment rate of 6.6%. Given the “six months” number thrown out by Janet Yellen, we could start to see the jobs reports begin to matter again for bonds, where a strong reports will be very bearish.
 
Following on that theme, investors pulled $10.3 billion out of bond ETFs in March, the biggest liquidation since December 2010. If the economy is in fact picking up some steam, then the bond market is about to become a very treacherous place. 

 

Sweet Sixteen and the Elite Eight

This weekend the NCAA women are in the Sweet Sixteen round. Today’s games:

University of Kentucky vs Baylor (12:00 noon EDT)(all games are on ESPN) UPDATE: Baylor 90 – 72

Oklahoma State vs Notre Dame (2:00 pm EDT) Go Irish! UPDATE: Notre Dame 89 – 72 Yay, Mrs NoVA!

BYU vs UConn (4:30 pm EDT) Go Huskies! (In the spirit of rooting for anybody who’s playing against BYU) UPDATE: UConn 70 – 51

DePaul vs Texas A&M (6:30 pm EDT) UPDATE: Texas A&M 84 – 65

Sunday’s games:

University of Maryland vs Tennessee (12:00 noon EDT) Go Terps! UPDATE: Maryland 73 – 62

LSU vs Louisville (2:20 pm EDT) UPDATE: Louisville 73 – 47

PSU vs Stanford (4:30 pm EDT) UPDATE: Stanford 82 – 57

UNC vs South Carolina (6:30 pm EDT) UPDATE: UNC 65 – 58


And of course, the men’s tournament is in the Elite Eight round. The games the last two days–and especially last night–have been some great basketball! Today’s games :

Dayton vs Florida (6:09 pm EDT, TBS)(Why in the world the “09”? Why not 6:10?) UPDATE: Florida 62 – 52

Wisconsin vs Arizona (8:49 pm EDT, TBS). For McWing’s sake, Go ‘Cats! But I have to admit, my heart is with the Badgers. UPDATE: Wisconsin 64 – 63 in overtime. The Badgers were trying to kill me tonight!

Tomorrow:

UConn vs MSU (2:20 pm EDT, CBS). Do you even have to ask? GO STATE!! UPDATE: UConn 60 – 54

University of Kentucky vs UM (5:05 pm EDT, CBS). Let’s Go Blue! UPDATE: UK 75 – 72

Dare I hope that 75% of the Final Four be BiG teams?

Sigh. There is no joy in Mudville tonight.

Morning Report – Little to no progress on foreclosure inventory in the Northeast 3/28/14

Vital Statistics:

 

 

Last

Change

Percent

S&P Futures 

1844.9

4.3

0.23%

Eurostoxx Index

3153.3

19.6

0.62%

Oil (WTI)

101.8

0.5

0.52%

LIBOR

0.233

0.000

-0.11%

US Dollar Index (DXY)

80.16

0.044

0.05%

10 Year Govt Bond Yield

2.68%

0.00%

 

Current Coupon Ginnie Mae TBA

105.2

-0.1

 

Current Coupon Fannie Mae TBA

104.2

0.0

 

RPX Composite Real Estate Index

200.7

-0.2

 

BankRate 30 Year Fixed Rate Mortgage

4.33

   

 

Stock markets in the US are following overseas markets higher. Bonds and MBS are flat

 

Personal Income and Personal Spending rose .3% month over month in February. January’s spending number was revised down. The core personal consumption expenditure growth rate was 1.1% annualized, showing inflation remains tame and gives the Fed leeway to keep interest rates low. For all the talk about “six months” and “considerable time” don’t forget that this Fed takes the dual mandate seriously and believes inflation can be too low. If inflation remains around 1%, they will want to pursue policies to push it closer to 2%. The Fed has been trying to create inflation for six years and the numbers remain stubbornly low. 

 

Note that in response to recent data, Barclays has trimmed its estimate for Q1 GDP to 2% from 2.4%. 

 

The latest CoreLogic Market Pulse is out, with a couple of good articles. First, it discusses how housing affordability differs between first time homebuyers and buyers with an existing home. Affordability has been declining, but it has been declining more for first time homebuyers, which may partially explain why the first time homebuyer remains on the sidelines. Until they return to the market, we are going to have this sort of abnormal market, IMO. 

 

Foreclosure inventory is down 31% nationally from a year ago to about 837,000 homes. or about 2.1% of all homes with a mortgage. In states like California, professional investors snapped up the foreclosure inventory and at this point supply is constrained and prices are rising. Not so in the Northeast, where very little progress has been made on the foreclosure inventory, and unsurprisingly prices have barely budged. 

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Morning Report – grim Q4 numbers out of the MB 3/27/14A

Vital Statistics:

 

Last Change Percent
S&P Futures 1841.2 -1.4 -0.08%
Eurostoxx Index 3116.2 -14.0 -0.45%
Oil (WTI) 101.2 1.0 0.96%
LIBOR 0.234 0.000 0.11%
US Dollar Index (DXY) 80.12 0.090 0.11%
10 Year Govt Bond Yield 2.70% 0.01%
Current Coupon Ginnie Mae TBA 105.1 -0.1
Current Coupon Fannie Mae TBA 104.2 -0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.33

 

Markets are lower after yesterday’s sell off. Bonds and MBS are down small. Initial Jobless claims came in at 311k, lower than expected.
The final revision to fourth quarter GDP is in – 2.6%. The advance estimate was +3.2%. Personal consumption was up 3.3%, which is a good number. The price index came in at 1.6%, which is still below the target level for the Fed.
Mortgage banking profits hit a low in Q4. Average per-loan profits fell from $743 in Q3 to $150 in Q4, according to the MBA. This is the lowest level since the MBA began tracking this in 2008.  Loan production expenses increased to $6.959 from $6,368 in the quarter. Loan production expenses are an “all-in” number that includes commissions, overhead, etc. Personnel expenses per loan averaged $4,385 in Q4 vs $4,130 in Q3. Average production volume was $367 million in Q4, down from $391 million in Q3. Secondary marketing income increased by 4 bps. Finally, the productivity rate was 2.0 loans per production employee per month, a decline from 2.5 loans in the third quarter. Lower volume + increased compliance costs = lower profits. And this is in Q4, before all the new rules kicked in.
Is the distressed REO-to-rental trade getting played out? According to RealtyTrac, we have reached a state of stasis in the distressed real estate arena, with a dwindling supply of homes, institutional investors beginning to balk at the higher prices, a lack of supply of new construction, and an MIA first time homebuyer. All cash sales were 43% of all U.S. residential sales in February. The historical number is closer to 20%. There is an incredible amount of pent-up demand for the first time homebuyer once the economy recovers. That dip in household formation was due to a lousy economy, not fertility rates 25-30 years ago.

Pending Home Sales dropped .8% month-over-month and 10.2% year-over-year. I’m sure weather played a role in this drop, but it confirms what RealtyTrac is saying above.
Maxine Waters has proposed a bill to wind down the GSEs and replace it with a system that regulates the mortgage industry like a public utility, where a co-op of lenders would issue MBS guaranteed by the government. I wonder if that would also mean that the government would dictate how much a lender is permitted to make on a loan. She would reduce the private sector’s first loss risk to 5% from 10%, and lower the required down payment to 5% (3.5% for first time homebuyers). Naturally, this is a bill the left is going to love because it ensure that “underserved” constituencies continue to be subsidized by other borrowers. This bill has a less than zero chance of ever becoming law, so it is basically just a political marker and nothing more.

 

Morning Report – The market continues to give weak data a pass 3/26/14

Vital Statistics:

 

  Last Change Percent
S&P Futures  1865.7 6.4 0.34%
Eurostoxx Index 3135.4 38.8 1.25%
Oil (WTI) 99.63 0.4 0.44%
LIBOR 0.233 -0.001 -0.43%
US Dollar Index (DXY) 80.1 0.157 0.20%
10 Year Govt Bond Yield 2.74% 0.00%  
Current Coupon Ginnie Mae TBA 104.8 -0.1  
Current Coupon Fannie Mae TBA 103.9 0.1  
RPX Composite Real Estate Index 200.7 -0.2  
BankRate 30 Year Fixed Rate Mortgage 4.35    

 

Markets are higher this morning in spite of a kind of weak durable goods number. The headline number was better than expectations, but once you strip out air and defense, they actually fell. The market seems to be handing out weather-related “get out of jail free” cards like candy these days. Bonds and MBS are flattish.
 
Mortgage Applications fell 3.5% last week. Purchases rose 2.8% while refis fell 7.7%. Rates rose 6 basis points which explains the drop. Refis dropped to 53.8% of all loans.
 
The buy and mod business remains robust, at least in NY, one of the most lender-unfriendly states out there. DQs loans in Northeast judicial states like NY and NJ trade for 60% of BPO, as opposed to California, where it is closer to 80%. Maybe this is what it takes to move the logjam of foreclosed properties in New York. 
 
Party like its 1999:  Candy Crush is worth $7 billion. Guess all of those annoying facebook push ads must be worth something.
 

 

Fed Head Lockhart tries to clarify the “considerable time = six months” comment by saying that six months is a minimum, and it will probably be longer than that. Apparently some market participants were taking Yellen’s comments to mean “as soon as April.”

 

Redwood just priced $180 million of top rated jumbo securities paying 4% at 101.30. The REIT had been simply selling loans outright to banks lately given their appetite. 

 

Morning Report – Home Price Appreciation is decelerating 3/25/14

Vital Statistics:

 

  Last Change Percent
S&P Futures  1856.7 7.3 0.39%
Eurostoxx Index 3094.9 42.0 1.37%
Oil (WTI) 100 0.4 0.44%
LIBOR 0.234 -0.001 -0.32%
US Dollar Index (DXY) 80.05 0.111 0.14%
10 Year Govt Bond Yield 2.75% 0.02%  
Current Coupon Ginnie Mae TBA 104.8 0.0  
Current Coupon Fannie Mae TBA 103.8 -0.1  
RPX Composite Real Estate Index 200.7 -0.2  
BankRate 30 Year Fixed Rate Mortgage 4.85    

 

US futures are following European markets higher. Bonds and MBS are down.
 
Some economic data this morning: New home sales fell 3.3% in Feb to an annualized 440k. Consumer Confidence increased from 78.3 to 82.3, while the Richmond Fed Manufacturing Index fell a point to -7. I suspect weather played a role in the new home sales and Richmond Fed numbers.
 
The FHFA house Price Index rose .5% in January, a little lower than expected. Case-Shiller rose 13.24% YOY, slightly below expectations. The Black Knight (formerly known as Lender Processing Services) home price index was flat in Jan, but up 8% year over year. They have home prices within 14% of the June 2006 peak. Note that in the Black Knight survey, the Northeastern states (NY, NJ) are starting to wake up.
 

 

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Charles Plosser was surprised by the market’s reaction to the FOMC statement. Punchline: We should be talking about economic conditions, not timelines. FWIW, I was surprised as well. 6 months after the end of tapering (which will presumably happen at the Dec FOMC meeting) puts you at the June FOMC meeting. Since most forecasts have the Fed funds rate increasing sometime in 2015, an early forecast of a June 15 hike doesn’t seem all that surprising. A lot can happen in 15 months. Plosser would like to see the Fed Funds rate over 2% for 2015 and over 3% for 2016. 
 
The American Enterprise Institute has weighed in on Johnson-Crapo (the replacement for the GSEs). Part of the issue is that the affordable housing mandates don’t disappear, but are moved underground, to be administered by the FMIC. The difference is that it won’t be funded by HUD, it will be funded by a tax on banks, which will ultimately get passed on to borrowers. Others have pointed out that while Johnson Crapo might have issues with the left, it is going to have big issues with the right. FWIW, Dick Bove comes out in defense of the GSEs

Morning Report – The Week Ahead 3/24/14

Vital Statistics:

 

Last Change Percent
S&P Futures 1861.9 4.9 0.26%
Eurostoxx Index 3080.6 -15.9 -0.51%
Oil (WTI) 100.2 0.7 0.69%
LIBOR 0.235 0.002 0.97%
US Dollar Index (DXY) 80.26 0.154 0.19%
10 Year Govt Bond Yield 2.78% 0.03%
Current Coupon Ginnie Mae TBA 104.8 -0.2
Current Coupon Fannie Mae TBA 103.7 -0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.39

 

Markets are higher this morning after some good manufacturing data out of Europe and the US. Bonds and MBS are down.
The Chicago Fed National Activity Index rebounded in February to a better-than-expected.14 after a downward-revised -.45 in January. The Markit US Manufacturing PMI came in light.
We have quite a bit of data this week, with the FHFA Home Price Index, Case-Shiller, and new home sales. On Wed, we get durable goods, Thursday, we get GDP and Personal Income / Spending.
Small cap stocks are back to bubble valuations.

War and Peace

Reprinted for educational purposes only.

Shootings involving combat veterans raise questions of police training

By Ciara O’Rourke and Jeremy Schwartz – American-Statesman Staff

Gene Vela was supposed to graduate in May with a master’s degree in global policy studies. It would have been a milestone for Vela, who was among the first U.S. Marines involved in the initial invasion of Iraq.

Vela, 30, battled post-traumatic stress disorder in the Marines and after leaving the military, and his struggles have included run-ins with Austin policefor driving while intoxicated, among other interactions.

More recently, though, he seemed to be forging a new life. Last year, he was a summer intern in Washington for U.S. Rep. Joaquin Castro and he was named Senate Representative of the Year for his work on the Senate of College Councils at the University of Texas, in part for helping create a veteran liaison program there. In September, he spoke at a law enforcement summit on the challenges veterans face when they return from war.

But on Nov. 10, 2013, the night before Veterans Day, Austin police and paramedics were dispatched to Vela’s apartment in Central Austin after a friend concerned about his well-being called police. Within half an hour, police had fired at Vela after they say he aimed a gun at them. Then the graduate student was bound for jail on a charge of aggravated assault against a public servant, with a wound on his shoulder where a bullet grazed him above a tattoo bearing the words “U.S. Marine Corps.”

The incident wasn’t the only time in recent months that a standoff between police and combat veterans in Central Texas has ended in bloodshed.

Between December 2012 and December 2013, there were at least four such shootings in the region, including three in the last six months of 2013. A fifth shooting incident involved a young Army veteran who apparently didn’t deploy to war, according to personnel records.

An American-Statesman analysis of data obtained from nearly two dozen local law enforcement agencies shows that, since 2003, nearly 10 percent of subjects in Central Texas shooting incidents involving police were military veterans or active-duty service members. While actual numbers are low, the outcome is often tragic.

Of the four most recent shootings involving combat veterans who had served in Iraq or Afghanistan, two recently returned Fort Hood soldiers were shot and killed by police in separate incidents; a third – Vela – was wounded; and a fourth was unhurt in a shootout with Fredericksburg police. In at least three of the cases, the shootings were preceded by attempts at police negotiations.

The incidents also turned deadly for police: a Killeen police officer was fatally shot in one of them.

The shootings, experts and advocates say, highlight the need for more specialized law enforcement training in navigating encounters with veterans in crisis.

Few law enforcement agencies in Central Texas provide their officers with such specialized training, which experts say can save lives – both of officers and veterans – and funnel troubled veterans into getting mental health help instead of into jail or prison, where studies show their symptoms often grow worse.

State and local officials are hoping to remedy that with a new training program in the final stages of development and which officials hope will eventually help law enforcement agencies statewide.

The Veterans Tactical Response Program, which is being developed by the Texas Health and Human Services Commission, the Department of Veterans Affairs and the Austin Police Department, is built around the idea that law enforcement officers can take specific approaches to defuse life-threatening situations involving combat veterans.

Experts say that combat veterans can respond differently to police interactions than civilians, both because of their military experience and their risk of traumatic brain injury and post-traumatic stress disorder, which affects an estimated 20 percent of combat veterans. And, if armed, experts say veterans are often far better trained than civilians in how to use their weapons.

Experts say law enforcement officers might be in a unique position to gain the trust of veterans in crisis.

“By relating to them as equals and as servants of the greater good who might not always be understood and appreciated, police officers and negotiators have a better chance than almost anyone to earn a veteran’s trust and to de-escalate situations that potentially may become dangerous,” FBI researchers said in a recent bulletin.

An increasing number of police officers are military veterans; about 37 percent of Austin police have served in the military.

The Texas program was a response to what officials called a “marked increase” in incidents involving combat veterans, ranging from domestic disturbances to suicides. But hard data on veteran-involved police standoffs is hard to come by, as is even basic information about veteran contacts with law enforcement and the justice system.

In 2011, however, the FBI revealed that between 1995 and 2009, 6 percent of all incidents in its internal database of hostage and barricade incidents involved a veteran or active-duty military member. The agency wouldn’t release more recent information.

Of 106 subjects involved in police-related shootings in Central Texas since 2003 — according to data provided by nearly two dozen local agencies in Travis, Hays, Williamson and Bell counties — nearly 10 percent were identified as veterans or active-duty members by the personnel offices of the Army, Marine Corps, Air Force and Navy. The area, sitting between Killeen’s massive Fort Hood and the half-dozen military installations in San Antonio, has one of the highest concentrations of veterans in the state.

The numbers are relatively low, especially before 2013: just six incidents between 2007 and 2012. And initial research suggests that nationwide, Iraq and Afghanistan vets are ending up in jail or prison at lower rates than veterans of previous conflicts.

A 2012 study in the Journal of Consulting and Clinical Psychology found that 9 percent of Iraq and Afghanistan era veterans reported having been arrested since returning home, though that rate reached 23 percent among veterans with PTSD and frequent anger symptoms.

Frustrated by the inability to get a clear picture of how many veterans have entered the justice system, the Legislature last year passed a law requiring the Texas Department of Criminal Justice to track the number of inmates who are veterans using state and federal databases. The current system of self-reporting is notoriously unreliable because many veterans fail to identify as such, experts say.

“Without the ability to confirm veteran status, TDCJ is unable to effectively offer PTSD-tailored mental health services to the individuals who would benefit from it,” said Jorge Renaud, policy analyst with the Texas Criminal Justice Coalition, a policy research group advocating for criminal justice reform.

Many who train law enforcement on interacting with veterans in crisis say they walk a fine line between advocating for the training and feeding into stereotypes of combat veterans as ticking time bombs.

Officer Troy Schouest, who heads the Veterans Tactical Response Program for the Austin Police Department, said he opposes tracking violent incidents involving veterans. “I don’t want to create a false stigma, or single any one group out,” he said. “I don’t want people to think veteran is a dirty word.”

Star Lara, who trains California law enforcement agencies for the nonprofit group Swords to Plowshares, said she likewise tries to disabuse officers of that notion. “We never want someone to leave the training thinking that all veterans are (messed) up,” she said. “But oftentimes if it’s a law enforcement interaction … They are going to meet the veteran on a very bad day.”

Gene Vela’s encounters with Austin police began soon after he moved to the city, about three years after he left the military, where he worked as an armored vehicle crewman. In 2005, he received an other than honorable discharge, after nearly four years of service, for underage drinking, breaking curfew and using disrespectful language toward a sergeant, according to his attorney, Skip Davis. The discharge, which Davis said stemmed from untreated PTSD, complicated efforts to get VA treatment and benefits, some close to him say.

In one of his encounters with police, Vela told officers he was “getting his shotgun ready” after they asked him to open his door, according to a prosecutor’s motion to raise bond in a 2009 burglary case.

The next month, officers were dispatched to Vela’s apartment after he called 911 and said he wanted to go to a psychiatric emergency service clinic, according to the motion. When Vela opened the door to speak to police, it says, he threatened to shoot one of the officers. He was convicted of making a terroristic threat against a public servant.

The court document also details multiple instances in which prosecutors suggest Vela should have received an evaluation from a mental health officer or seen someone from the Austin Police Department’s crisis intervention team but didn’t.

In recent years, though, Vela appears to have thrived at the University of Texas, where he was well-known and well-liked at the LBJ School of Public Affairs. Davis said that Vela supports his daughter and sends money home to his mother. He was on track to start treatment for PTSD when police went to his apartment in November.

On Nov. 10, police say, Vela didn’t answer the door when officers knocked, but he pointed a laser-equipped handgun at officers through a window. When officer Adrien Chopin shot at Vela from the street, the window broke, and Vela retreated farther back into his apartment, according to police. Officers then heard “the distinct sound of a rifle or pistol being loaded,” according to an arrest affidavit, and then a gunshot. Police have said Vela returned to the window and again pointed a gun at officers, something Davis disputes. Chopin and officer Leo Cardenas fired, hitting Vela.

Davis said Vela was sound asleep when he was “brusquely awakened” by a dispatcher calling and someone banging at his front door. “He was groggy and disoriented,” Davis said. “He had no idea who was at his door.”

During the standoff, according to records, an officer said he heard Vela say, “Come kill me” and “Help me.”

The incident happened just a couple of weeks after some officers on the department’s negotiation and critical incident teams had participated in a trial run of the Veteran Tactical Response program training.

But hostage negotiators didn’t arrive at Vela’s apartment until after he was shot, according to police. A few days after the shooting, the department’s training liaison for the program said he still hadn’t heard about the incident and it’s unclear if any of the officers responding that night had received the training. An Austin police spokeswoman said officials couldn’t answer questions about the incident because of the ongoing investigation.

While Vela’s military and criminal history was known by some officers within the department, the arrest affidavit in connection with the case indicates responding officers didn’t know Vela’s name until after the first shot was fired.

Officer Troy Schouest, Austin’s police liaison for the Veterans Tactical Response program, said the goal is to train everyone in the department so that officers can try to defuse crisis situations until a negotiator arrives. More officers from the department’s critical incident team, as well as officers from Lakeway Police Department, are scheduled to take the class in April, he said. Once the VA finishes vetting the program and officially signs off, “we can finally offer it to everyone on a continuous basis,” Schouest said. “We are going to schedule it as a stand-alone class and as part of a new communication series we have under development.”

Vela’s court case now pits prosecutors, who have said Vela is a threat to the public, against Davis, who says Vela should be receiving in-patient PTSD therapy instead of sitting in jail on $700,000 bail.

Had Vela been given a lower bail, Davis said, “Gene would have finally gotten his ‘war demons’ under control and returned to UT to finish up the one semester he had remaining to graduate.”

While most agencies give their officers crisis intervention training, which includes lessons on how to deal with subjects in the midst of a mental health crisis, experts say veteran-specific training consists of a unique set of approaches that are different than those used with civilians.

“(Combat veterans) must not be put into situations where they will be forced to act in a way that proves their personal courage,” researchers concluded in a 2011 FBI Law Enforcement Bulletin. “They want to be treated with respect, and they have little tolerance for half-truths and disingenuous talk.”

Training typically includes helping officers identify a subject as a veteran, both by looking for clues such as military-style tattoos or armed forces bumper stickers, and by having dispatchers routinely ask 911 callers about veteran status.

Barking orders, sudden movements or loud noises can all worsen the situation.

“The normal tactical response is flashbangs (grenades), hit the house,” Schouest said. “But if you’re dealing with a veteran in crisis and you start with flashbangs before negotiating, we could escalate the crisis, push them further in.”

The Texas program includes training on military culture and education around issues related to traumatic brain injury, which military leaders have called the signature wound of the Iraq and Afghanistan wars.

Since 2003, nearly 260,000 service members have been diagnosed with traumatic brain injury, which is caused by concussive blasts, according to the Defense and Veterans Brain Injury Center. Injuries to the frontal lobe, especially, can reduce impulse control and cause outbursts of anger, experts say.

Bettie Beckworth, who is spearheading the Veterans Tactical Response Program for the state Health and Human Services agency, said that a veteran suffering from traumatic brain injury might also have trouble responding quickly to an officer’s questions. “(Police) may think they are resisting, but they need to slow down with their questions,” she said. “They can’t see the injury so people don’t understand why they are acting like that.”

Several police agencies surveyed by the American-Statesman said they would welcome such training, though it’s not clear when it will be widely available. Once the state’s training materials are finalized, officials hope to persuade the Texas Commission on Law Enforcement to adopt it as part of its statewide training.

“We want to make sure it’s available to departments all across the state,” Beckworth said. “The goal at this point is to ensure that not only do we train the special tactical teams, but offer training for patrol officers.”

Training experts in Texas and throughout the country are also eager to introduce the training to law enforcement academies, in hopes that it will become more institutionalized.

Bureau of Alcohol, Tobacco and Firearms negotiators have begun to use the strategies after contacting officials with the Texas training program. Peter Bukiri, a violent crime reduction strategist with the bureau, said the Veterans Tactical Response Program has helped negotiators and members of federal SWAT teams execute high-risk warrants.

Bukiri, whose law enforcement career spans 40 years, said he saw similar incidents after the Vietnam War, before such training existed. “We’ve always dealt with it, but it was really shoot-from-the-hip stuff,” he said. “(The Veterans Tactical Response Program) explains it in detail, what you’re dealing with. … I’d like to see the trainings almost become mandatory. This is the future.”


Victor Valdez

Military service: A former Fredericksburg High School student, Valdez entered the Marine Corps in March 2009 and a year later deployed to Afghanistan with the 3rd Battalion, 5th Marine Regiment, which suffered the most casualties of any Marine unit in the Afghan war. Over nine months, 25 Marines in the unit were killed and nearly 20 percent of the unit’s troops — 184 Marines — were wounded.

Incident: Valdez left the Marines in March 2013. Nine months later, on Dec. 18, Valdez went to a Valero gas station and ordered the two clerks to leave before he emptied the cash register, according to court records and a city official. Fredericksburg police reached Valdez by phone and tried to negotiate with him, according to an affidavit.

After an hour and a half, the affidavit says, Valdez approached the front of the store and began shooting through the windows at police. The officers shot at, but didn’t hit Valdez, who was cut by broken glass.

Outcome: He was indicted on two counts of aggravated robbery and 12 counts of aggravated assault with a deadly weapon on a public servant and is in the Gillespie County Jail with bail set at $490,000.

Training: Brian Haley, a patrol lieutenant with the Fredericksburg department, said officers receive crisis intervention training that’s required by the state but not training specific to veterans.

Getting help

Active-duty service members and volunteers in crisis can call the Military crisis line: 1-800-273-8255, press 1, or go to veteranscrisisline.net to chat with Department of Veterans Affairs responders.

Gene Vela

Military service: Joined the Marine Corps in December 2001, operating and maintaining assault vehicles and weapons systems. Deployed to Iraq in 2002 as part of the initial invasion force.

Diagnosed with PTSD, Vela struggled after returning home and had several run-ins with police. But he was also supporting his daughter, earned a bachelor’s degree and was pursuing a postgraduate degree at the University of Texas’ LBJ School of Public Affairs.

Incident: On Nov. 10, Austin police received a distress call from a friend of Vela, and officers arrived at his second-floor apartment near UT. After officers said Vela pointed a gun with a laser sight them, Vela was shot in the shoulder by an officer.

Outcome: He’s in the Travis County Jail on charges including aggravated assault against a public servant.

Training: The Austin Police Department is the first in the state to be trained as part the Department of Health and Human Services Commission’s Veterans Tactical Response Program. While some officers have participated in an early training class, it’s unclear if any of those officers were summoned to Vela’s apartment.

Dustin Cole

Military service: Pfc. Dustin Billy Cole, of Talihina, Okla., joined the Army in October 2008 and had two deployments to Afghanistan, where he was a combat engineer.

Incident: In July 2013, five months after he returned from his second deployment, Cole’s neighbors at his Killeen apartment complex called police saying a man with a gun was threatening residents at the pool. A SWAT team arrived shortly before midnight and attempted to negotiate with Cole, who had gone into his apartment.

At one point, it appeared police were able to talk Cole into surrendering; he came to his front door with his hands up, according to police. But when officers tried to arrest him, Cole went back into his apartment, picked up an assault rifle and fired on officers, killing Robert Hornsby and wounding Juan Obregon. Officers returned fire, killing Cole.

Outcome: Cole was buried in Pushmataha County, Okla. Officer Hornsby, a father of two, was mourned by hundreds at a public service in Killeen.

Training: Killeen police say they have used two professional services to provide specific training to officers on dealing with military subjects with PTSD. It’s unclear if the responding officers had taken part in that training.

Kelly Bangle

Military service: Staff Sgt. Kelly Bangle, of Arizona, joined the Army in 2003, serving as a signals intelligence officer. He deployed to Afghanistan in 2006 and to Iraq in 2011. He was among the last U.S. soldiers to leave Iraq.

Incident: On Dec. 14, 2012, Fort Hood police were called to a suspicious vehicle near the post’s Kouma Lake at around 3 a.m. While approaching the vehicle, officers received gunfire, according to Fort Hood officials. They returned fire, killing Bangle.

Outcome: Bangle, a father of three, was buried in Cochise County, Ariz.

Training: The two Department of the Army police officers on the scene had received broader crisis intervention training, but not combat veteran-specific training.

Local training

Specialized training remains rare in communities surrounding Fort Hood, which for much of the last decade has sent more soldiers to war than any other U.S. military installation.

Between December 2012 and July 2013, two active-duty soldiers recently returned from the war zone were shot and killed in shootouts with police. Staff Sgt. Kelly David Bangle was killed by civilian Fort Hood police after he fired on them from his car in the pre-dawn hours of Dec. 14, 2012; seven months later, Pfc. Dustin Cole was shot and killed in a shootout with Killeen Police Department SWAT team members, who were called out to his off-post apartment complex by concerned neighbors.

Killeen Assistant Police Chief Michael Click said that while he couldn’t comment on the Cole shooting because of ongoing legal proceedings, SWAT team members and negotiators have undergone some special instruction in working with combat veterans.

Police departments in Temple, Belton and Harker Heights conduct broader trainings, though officials say their officers are well educated on the issue.

“The majority of our members are prior military and consequently we have a cultural awareness of the issues,” said Harker Heights Chief Mike Gentry. “But this has not resulted in a specific training curriculum.”

At Fort Hood, where most Department of the Army police officers are also combat veterans, officials report similar dynamics.

“We do not tailor the training for handling combat veterans in crisis, just training on people in crisis,” Fort Hood officials said in a statement.

Digging deeper

Jeremy Schwartz has covered military and veterans issues for the American-Statesman since 2009. After a spate of police shootings involving veterans, Schwartz sought to quantify such incidents and examine the causes, effects and solutions.

Getting help

Active-duty service members and volunteers in crisis can call the Military crisis line: 1-800-273-8255, press 1, or go to veteranscrisisline.net to chat with Department of Veterans Affairs responders.

Gene Vela

Military service: Joined the Marine Corps in December 2001, operating and maintaining assault vehicles and weapons systems. Deployed to Iraq in 2002 as part of the initial invasion force.

Diagnosed with PTSD, Vela struggled after returning home and had several run-ins with police. But he was also supporting his daughter, earned a bachelor’s degree and was pursuing a postgraduate degree at the University of Texas’ LBJ School of Public Affairs.

Incident: On Nov. 10, Austin police received a distress call from a friend of Vela, and officers arrived at his second-floor apartment near UT. After officers said Vela pointed a gun with a laser sight them, Vela was shot in the shoulder by an officer.

Outcome: He’s in the Travis County Jail on charges including aggravated assault against a public servant.

Training: The Austin Police Department is the first in the state to be trained as part the Department of Health and Human Services Commission’s Veterans Tactical Response Program. While some officers have participated in an early training class, it’s unclear if any of those officers were summoned to Vela’s apartment.

Dustin Cole

Military service: Pfc. Dustin Billy Cole, of Talihina, Okla., joined the Army in October 2008 and had two deployments to Afghanistan, where he was a combat engineer.

Incident: In July 2013, five months after he returned from his second deployment, Cole’s neighbors at his Killeen apartment complex called police saying a man with a gun was threatening residents at the pool. A SWAT team arrived shortly before midnight and attempted to negotiate with Cole, who had gone into his apartment.

At one point, it appeared police were able to talk Cole into surrendering; he came to his front door with his hands up, according to police. But when officers tried to arrest him, Cole went back into his apartment, picked up an assault rifle and fired on officers, killing Robert Hornsby and wounding Juan Obregon. Officers returned fire, killing Cole.

Outcome: Cole was buried in Pushmataha County, Okla. Officer Hornsby, a father of two, was mourned by hundreds at a public service in Killeen.

Training: Killeen police say they have used two professional services to provide specific training to officers on dealing with military subjects with PTSD. It’s unclear if the responding officers had taken part in that training.

Kelly Bangle

Military service: Staff Sgt. Kelly Bangle, of Arizona, joined the Army in 2003, serving as a signals intelligence officer. He deployed to Afghanistan in 2006 and to Iraq in 2011. He was among the last U.S. soldiers to leave Iraq.

Incident: On Dec. 14, 2012, Fort Hood police were called to a suspicious vehicle near the post’s Kouma Lake at around 3 a.m. While approaching the vehicle, officers received gunfire, according to Fort Hood officials. They returned fire, killing Bangle.

Outcome: Bangle, a father of three, was buried in Cochise County, Ariz.

Training: The two Department of the Army police officers on the scene had received broader crisis intervention training, but not combat veteran-specific training.

Local training

Specialized training remains rare in communities surrounding Fort Hood, which for much of the last decade has sent more soldiers to war than any other U.S. military installation.

Between December 2012 and July 2013, two active-duty soldiers recently returned from the war zone were shot and killed in shootouts with police. Staff Sgt. Kelly David Bangle was killed by civilian Fort Hood police after he fired on them from his car in the pre-dawn hours of Dec. 14, 2012; seven months later, Pfc. Dustin Cole was shot and killed in a shootout with Killeen Police Department SWAT team members, who were called out to his off-post apartment complex by concerned neighbors.

Killeen Assistant Police Chief Michael Click said that while he couldn’t comment on the Cole shooting because of ongoing legal proceedings, SWAT team members and negotiators have undergone some special instruction in working with combat veterans.

Police departments in Temple, Belton and Harker Heights conduct broader trainings, though officials say their officers are well educated on the issue.

“The majority of our members are prior military and consequently we have a cultural awareness of the issues,” said Harker Heights Chief Mike Gentry. “But this has not resulted in a specific training curriculum.”

At Fort Hood, where most Department of the Army police officers are also combat veterans, officials report similar dynamics.

“We do not tailor the training for handling combat veterans in crisis, just training on people in crisis,” Fort Hood officials said in a statement.

Digging deeper

Jeremy Schwartz has covered military and veterans issues for the American-Statesman since 2009. After a spate of police shootings involving veterans, Schwartz sought to quantify such incidents and examine the causes, effects and solutions.

Morning Report – Risk spreads back to bubble levels 3/21/14

Vital Statistics:

Last Change Percent
S&P Futures 1869.8 3.7 0.20%
Eurostoxx Index 3093.3 4.4 0.14%
Oil (WTI) 99.25 0.3 0.35%
LIBOR 0.233 -0.001 -0.32%
US Dollar Index (DXY) 80.17 -0.023 -0.03%
10 Year Govt Bond Yield 2.78% 0.01%
Current Coupon Ginnie Mae TBA 104.8 0.0
Current Coupon Fannie Mae TBA 103.6 -0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.42
Markets are up small on no real news. Bonds and MBS are down small. There is no economic data this morning.
KB Home sold $400 million of 5 year senior notes at 4.75%. The proceeds are going to be used to acquire land. I think we can expect to see more bond issuance as companies take advantage of low rates and tight spreads. Bond investors are paying up for paper at the moment, as spreads are about as tight as they have ever been. This means that (a) the bond market is vulnerable to shocks and (b) we could experience some turbulence as rates start rising. Look at the chart below – high yield spreads are back at bubble levels.

Existing home sales fell yesterday, as professional investors begin to balk at high prices. According to RealtyTrac, institutional investors bought 44,087 properties in Q4, down from a peak of 60,648 in the second quarter of last year. As the labor market improves, we should see a return to a more normal level of cash vs mortgage buyers.

Morning Report – A considerable time 3/20/14

Vital Statistics:

Last Change Percent
S&P Futures 1848.1 -4.1 -0.22%
Eurostoxx Index 3053.4 -22.9 -0.75%
Oil (WTI) 99.67 -0.7 -0.70%
LIBOR 0.234 0.000 -0.11%
US Dollar Index (DXY) 80.26 0.268 0.34%
10 Year Govt Bond Yield 2.78% 0.01%
Current Coupon Ginnie Mae TBA 104.7 0.0
Current Coupon Fannie Mae TBA 103.6 -0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.36
Markets are lower after yesterday’s FOMC meeting sent rates higher and stock lower. Initial Jobless Claims came in at 320k, lower than expected, but higher than last week.
In other economic indicators, the Philly Fed Business outlook rebounded in March, and the index of leading economic indicators rose. Existing Home sales were virtually flat at 4.6 million units. The median home price rose to $189,000, a 9% increase year-over-year. The NAR notes that most of the price appreciation is at the higher price points – the lower price points (sub $250k) are actually falling. In fact, most of the price appreciation is in the $1 million + bucket.
Stocks and bonds sold off on the FOMC statement as investors re-calibrated their estimates as to when rates will begin to rise. The 10 year bond sold off about 6 basis points, but the real action was in the 2 year where rates jumped from 34.7 basis points to close at 42 basis points. In the press conference, Yellen threw out the (probably offhand) comment that “a considerable time” could mean “six months” and that was the catalyst for the bond market sell-off. You can read some of the parsing here. As expected, the Fed cut asset purchases by $10 billion a month. They also got rid of the 6.5% unemployment target and went to more qualitative guidance, as expected.
The Fed released their latest economic forecasts – unemployment and GDP were lowered, while inflation was increased. The forecast for when rates would rise shortened a bit, while the expected rate increased. We will have to wait for the minutes to get a better read on what is behind that.
Homebuilder Lennar is up a couple of percent pre-open after reporting first quarter numbers that beat expectations. Orders increased 10% in units and 25% in dollar value. ASPs rose 18%. and gross margins increased 300 bps. This was the highest first quarter margin in the company’s history. The company felt it was still a little too early to predict the strength of the spring selling season, but hopefully they will give some color on the 11:00 am EST conference call. The big question will be whether they can still push through price increases or have we reached the point where it is depressing traffic.