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

Posted on March 31, 2014 by Brent Nyitray

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. 

 

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48 Responses

  1. Michigoose, on March 31, 2014 at 8:27 am said:

    Frist. Because I can.

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  2. quarterback, on March 31, 2014 at 9:22 am said:

    More debunking of the inequality/envy industry.

    http://www.theatlantic.com/business/archive/2014/03/how-you-i-and-everyone-got-the-top-1-percent-all-wrong/359862/

    These next two election cycles should be a joy. Dems will be saying, 24/7, let’s not talk about how badly we’ve screwed up the economy and foreign policy; let’s talk about the evil rich.

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  3. jnc4p, on March 31, 2014 at 10:00 am said:

    Micheal Lewis book excerpt on NYT

    “The Wolf Hunters of Wall Street
    An Adaptation From ‘Flash Boys: A Wall Street Revolt,’ by Michael Lewis

    By MICHAEL LEWIS
    MARCH 31, 2014”

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  6. quarterback, on March 31, 2014 at 11:19 am said:

    Another airhead liberal multigazillionaire sings the praises of socializing her family’s medical costs. All praise to Obama.

    http://www.nationalreview.com/corner/374602/rachael-ray-tears-obamacare-pitch-andrew-johnson#comments

    Biden’s line, “Do it for mom; do it for your dad,” sums up liberalism’s substitution of centralized government and redistribution schemes for actual family bonds. Julia’s mom and dad were absent from her life but, our imagination can fill in, were somewhere out there on the other end of the all-ruling government that taxed, regulated, and provided for her.

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  7. novahockey, on March 31, 2014 at 11:57 am said:

    I recall and interview with Biden. He was using his mother as an example of how important Social Security is, because it allowed her independence, which is very important to her. It struck me as odd, as it relying on transfer payments is the opposite of independence.

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    • ScottC, on March 31, 2014 at 12:18 pm said:

      Kevin Williamson has become one of the, if not the, best writers at NR. He rarely disappoints in his columns, and today is no exception.

      Prices are a mystery, and why that is is a mystery. People often talk about prices as though they were set by conspiracy in some corporate boardroom, or as though the real-world marketplace worked like a cost-plus government contract, with firms totaling up the expense of all their inputs and then adding some percentage to it. Prices are in an important sense arbitrary, which is why, paradoxical though it may sound, they are meaningful.

      Also, although not particularly relevant to his overall point, I got a kick out of this one in light of our recent discussion of the Supremes:

      Similarly, the United States passed its first minimum-wage law in 1933. It was thrown out as unconstitutional, and then reestablished in 1938, at which point it became constitutional via the magic of the infinitely flexible Commerce Clause. (There’s a reason Supreme Court justices and fairy-tale wizards wear the same outfits, with the nine-member national super-legislature missing only those awesome conical hats, which we, a freedom-loving people, should insist they adopt immediately.)

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  9. quarterback, on March 31, 2014 at 12:46 pm said:

    FDR’s court-packing scheme as a practical matter destroyed the Constitution, giving progressives power to rewrite it as they wished. The rest is sugarcoating.

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  10. jnc4p, on March 31, 2014 at 12:58 pm said:

    Good Forbes piece on the apparent actual rule of thumb that economists use to pick a minimum wage level:

    “A minimum wage below around 45% of average wages seems not to affect anything or anyone very much.”

    http://www.forbes.com/sites/timworstall/2013/02/17/greg-mankiws-excellent-question-why-a-9-minimum-wage-why-not-90-or-90-cents/

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  11. quarterback, on March 31, 2014 at 2:26 pm said:

    Re the minimum wage, I have long thought this: so, no one actually believes it can’t and won’t cause unemployment etc. at a high enough level. Advocates of raising it just argue for putting it in a range where the effects are hard to measure, but basic principles should tell us that putting it high enough to have its intended “positive” effects necessarily will mean it is high enough to have the predictable negative ones. Again, as always, liberal therapies depend on offering benefits that are obvious and identifiable (“Hey, look at us, we just made your boss give you a raise!”) and detriments that are more diffuse, hard to measure, and effectively hidden (“Let’s not worry about that marginal increase in unemployment. You got a raise!”).

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  12. jnc4p, on March 31, 2014 at 2:40 pm said:

    Hopefully the next time the Treasury Secretary and/or the Chairman of the Federal Reserve asks an officer at a publicly traded corporation to break the law, that officer keeps Ken Lewis in mind and resigns rather than comply.

    http://www.bloombergview.com/articles/2014-03-27/ken-lewis-sticks-it-to-new-york-s-top-cop

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  13. Whitaker. Motherfucking. Chambers, on March 31, 2014 at 2:56 pm said:

    Government is the criminal enterprise, no?

    That said, some good came out of this case. Thanks to Cuomo’s decision to investigate, the public learned that Ben Bernanke and Hank Paulson had threatened to remove Lewis from his job back in December 2008 if he did anything to disrupt Bank of America’s plans to buy Merrill Lynch & Co.

    But by all means, change the watchers.

    The SEC won’t be doing anything on this front, either. Before she took over as head of the SEC last year, Mary Jo White represented Lewis in the New York lawsuit, back when she was a partner at Debevoise. (The SEC declined to pursue the case years ago, anyway.)

    We’ve always been in the best of hands. Thank God for TARP or we might have lost some of these fine institutions and their leaders.

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  14. jnc4p, on March 31, 2014 at 3:21 pm said:

    “Government is the criminal enterprise, no?”

    At the least it was a criminal conspiracy between Bernanke, Paulson and Geithner.

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  16. jnc4p, on March 31, 2014 at 3:33 pm said:

    I’d have charged all of them, not just Ken Lewis.

    Bernanke in cuffs doing the perp walk.

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  17. novahockey, on March 31, 2014 at 4:20 pm said:

    Dave Camp, chair Ways and Means, not seeking re-election.

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  18. jnc4p, on March 31, 2014 at 4:26 pm said:

    Term limited as chair, correct?

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  20. jnc4p, on March 31, 2014 at 4:34 pm said:

    I don’t have much use for whining about term limits, but I think the point about ranking member vs chair is valid.

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  21. novahockey, on March 31, 2014 at 4:39 pm said:

    yeah, being ranking isn’t all that much fun.

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  23. Michigoose, on March 31, 2014 at 7:35 pm said:

    I wonder if they’ve got Princeton Mom on their consulting payroll?

    The conservative minds of the Heritage Foundation have found a way for Republicans to shrink the gender gap: They need to persuade more women to get their MRS degrees.

    The advocacy group held a gathering of women of the right Monday afternoon to mark the final day of Women’s History Month — and the consensus was that women ought to go back in history. If Facebook executive Sheryl Sandberg’s mantra is “lean in,” these women were proposing that women lean back: get married, take care of kids and let men earn the wages.

    [snip]

    The reality, the panelists at Heritage said, is that women are less happy than they were before the feminist movement, that women enjoy domestic work, and that most moms would prefer not to work full time, if at all.

    Maybe so. But it will take some convincing. The audience for these pronouncements Monday was small and mostly male, many of them apparently Heritage interns.

    “Wow,” said John Hilboldt, Heritage’s lectures director, as he opened the session. “Where are all the ladies?”

    I still don’t think they’re trying hard enough. There have to be a few women that they haven’t insulted yet somehow.

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  24. Whitaker. Motherfucking. Chambers, on March 31, 2014 at 7:44 pm said:

    Well, we hate women, especially poor women. That’s why we’re trying to suppress this,

    http://www.nejm.org/doi/full/10.1056/NEJMsa1212321#t=articleTop

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  25. jnc4p, on March 31, 2014 at 7:56 pm said:

    I wonder if Ezra realizes how this analogy hurts his argument.

    “Why the government should provide internet access
    …
    So just as we have a postal service that’s a public option for communications in the form of mail, we also need public options in every city for very high-capacity, very high-speed fiber internet access. That way we’ll make sure and we can compete with every other nation in the 21st century.”

    http://www.vox.com/susan-crawford-internet-public-option/

    The postal service of course is being rendered obsolete first by the private carriers such as UPS & Fed Ex and now the advent of electronic communications, but that’s the model for competing with every other nation in the 21st century.

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  26. jnc4p, on March 31, 2014 at 9:03 pm said:

    From the full piece:

    “Karin Agness, founder of the conservative Network of enlightened Women, took issue with Sandberg’s “Lean In” and “Ban Bossy” efforts, which encourage women and girls to be assertive. “Rather than try to ban words like ‘bossy,’ let’s try to promote real leadership skills, like developing a thick skin,” she said.”

    http://www.washingtonpost.com/opinions/dana-milbank-conservatives-to-women-lean-back/2014/03/31/e8b96c00-b91b-11e3-9a05-c739f29ccb08_story.html

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    • ScottC, on March 31, 2014 at 9:12 pm said:

      jnc:

      Thanks, I was just about to provide the full link myself. And for those of you who really want to be insulted, you can find a video of the full event here. The four women-hating speakers at the event were Karin Agness, Mona Charen, Mollie Hemingway, and the host Angelise Schrader.

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  27. Michigoose, on March 31, 2014 at 9:28 pm said:

    Scott:

    I didn’t ever say (nor, I believe does Milbank) say “women-hating”. I said insulting.

    To say that marriage will solve all of women’s problems and make them happier than they are now is insulting. Next thing you know we’ll be told to lie back and think of England.

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    • ScottC, on March 31, 2014 at 9:58 pm said:

      Mich:

      I’m guessing you didn’t even bother to watch the event. Apart from that, I don’t think you can speak for women generally, as you so often try to do. I suspect most women aren’t nearly as sensitive and prone to finding themselves insulted as you are.

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  28. Michigoose, on March 31, 2014 at 10:01 pm said:

    Why do liberal women assume that all women are as easily insulted as they are?

    Why do conservative men assume that all women agree with them as to what is insulting and what is not?

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    • ScottC, on March 31, 2014 at 11:17 pm said:

      Mich:

      Why do conservative men assume that all women agree with them as to what is insulting and what is not?

      They (and I) don’t.

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  29. jnc4p, on March 31, 2014 at 10:36 pm said:

    “To say that marriage will solve all of women’s problems and make them happier than they are now is insulting.”

    That’s not actually the argument that’s being presented. The real one is that some women don’t like the trade offs between work and home/family that have occurred in recent decades.

    Edit: Actually this is a good example about why it’s pointless to attempt this conversation. The caricature presented bears so little resemblance to the event as perceived by those who organized it, there’s no real basis to even have a discussion.

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    • ScottC, on March 31, 2014 at 11:13 pm said:

      jnc:

      The caricature presented bears so little resemblance to the event as perceived by those who organized it

      I’ll go further and say that the caricature bears no resemblance to the event as it actually occurred. I just watched it and it was quite interesting. Lots of notable data to appeal to the scientifically inclined, although as one panelist said, the data is so overwhelming that anyone who could be persuaded by data probably already has been. I’ve seen Charen before and she is always both well-informed and well-spoken. But I thought Mollie Hemingway, who I’ve never seen before, was particularly good.

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  30. quarterback, on April 1, 2014 at 5:51 am said:

    Gosh, what a surprise that the piece turns out to have been written by Dana Milbank. They are still paying that hack?

    I know many, many, many women who would say they feel insulted by the Milbank/Michi mindset, except that these sorts of women don’t go around whining about feeling insulted. It is more like disgusted and outraged by Democrats and liberals and feminists. On Sunday I heard some very funny reactions to the movie Noah from intelligent, educated women, along the lines of, “With all the focus on killing babies, putting the environment above man, clueless about the Bible … I thought it had to have been written by Democrats.”

    Next thing you know we’ll be told to lie back and think of England.

    Next thing you’ll be sobbing on your fainting couch. It’s alright, though, Obama has given womankind free birth control, finally achieving the Founding Mothers’ vision.

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    • ScottC, on April 1, 2014 at 6:49 am said:

      qb:

      Gosh, what a surprise that the piece turns out to have been written by Dana Milbank.

      Indeed. It is such an unthinking piece, and all too typical of the liberal tendency to caricature and dismiss conservative women with mockery rather than to address them and their arguments seriously.

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  31. quarterback, on April 1, 2014 at 7:00 am said:

    Dana Milbank is someone I’m confident doesn’t actually know any conservatives or libertarians. He’s a classic. No doubt he can’t understand how almost half the country voted for Romney, since no one he knows did.

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  32. Whitaker. Motherfucking. Chambers, on April 1, 2014 at 7:43 am said:

    Meh. Hater’s gonna hate.

    Now, make me a sammich!

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    • ScottC, on April 1, 2014 at 7:59 am said:

      McWing:

      The Krugman shits himself again.

      It’s amazing to me how people on the left routinely conflate Ayn Rand with the right. If only it were so!

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  34. Whitaker. Motherfucking. Chambers, on April 1, 2014 at 8:26 am said:

    it should be no surprise for Teh Krugman as he’s on record that he doesn’t read anybody to the right of himself.

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  35. Whitaker. Motherfucking. Chambers, on April 1, 2014 at 8:35 am said:

    Some dumb broad back talks Dana Milbank.

    http://blog.heritage.org/2014/03/31/dana-milbanks-war-women/

    Doesn’t known her place, does she.

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  36. jnc4p, on April 1, 2014 at 9:56 am said:

    “It’s amazing to me how people on the left routinely conflate Ayn Rand with the right. If only it were so!”

    This seems to be a good self description by her:

    “Objectivists are not ‘conservatives’. We are radicals for capitalism; we are fighting for that philosophical base which capitalism did not have and without which it was doomed to perish.”

    http://en.wikipedia.org/wiki/Capitalism:_The_Unknown_Ideal

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  37. jnc4p, on April 1, 2014 at 10:01 am said:

    I always found this to be an interesting observation about the grass being greener when it came to work vs home balance. How much of it is hazy nostalgia vs reality is for the reader to determine.

    “Some of us stay married because we’re in competition with our divorcing 1960s and 1970s parents, who made such a hash of it. What looks appealing to us now, in an increasingly frenetic, digital world, is the 1950s marriage. Writes Karen Karbo, in Generation Ex, reminiscing about her mother’s evening routine of serving old-fashioneds to her dad by the pool:

    At the turn of the millennium, our marriages and remarriages bear almost no resemblance to these single-paycheck, cocktail-hour unions. Once considered sexist and monotonous, these staid marriages are emblems of an easier time. What seemed too dull and constricting a mere fifteen years ago now looks luxurious, like those huge gas-guzzling cars with all that chrome and the tuck-and-roll seats.

    “

    http://www.theatlantic.com/magazine/archive/2009/07/lets-call-the-whole-thing-off/307488/4/

    Edit: Related piece more directly on point.

    “The sexual revolution’s legacy, she maintains, is “the paradox of declining female happiness.” She cites a 2009 study in which two Wharton School professors, using 35 years of General Social Survey data, found that despite educational and employment advances, women were reportedly less happy than they used to be. Ouch!”

    http://www.theatlantic.com/magazine/archive/2012/10/the-weaker-sex/309094/

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    • ScottC, on April 1, 2014 at 10:41 am said:

      jnc:

      I always found this to be an interesting observation about the grass being greener when it came to work vs home balance.

      The Heritage Foundation panel spoke of many things, but I thought it was not talking so much about work/home balance as it was talking about the effect that feminism as a movement has had on various aspects of society, particularly the institution of marriage, and how that has impacted on women’s reported happiness.

      On a more political level, they discussed at length the fact that apparent gender gap in voting between R’s and D’s is not so much a gender gap as it is a marriage gap. There is a fairly significant disparity, in the R’s favor, in the way that married women vote, but there is an even greater disparity, in the D’s favor, in the way that single women vote. They spent some time discussing why that might be, and what would drive single women to vote so overwhelmingly for D policies.

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  38. Whitaker. Motherfucking. Chambers, on April 1, 2014 at 10:34 am said:

    Effing misogyny! Burn the witch! Er, warlock!

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  39. quarterback, on April 1, 2014 at 6:29 pm said:

    Re single v married women’s voting, the D party is the ideal home for the woman progressivism has created, isn’t it? That woman being Julia, the hyper-individual, rootless, family-less, secularized, creature of the bureaucratic world. I hate to keep going back to her, but Julia pretty much explains all of current politics. She doesn’t need anyone or anything–except for her Sugar Daddy big government, to give her abortions and condoms and provide for her other needs. Moreover, she is dependent on it.

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