Morning Report – Recovery Summer on the horizon? 4/17/14

Vital Statistics:

Last Change Percent
S&P Futures 1856.0 3.2 0.17%
Eurostoxx Index 3149.1 9.9 0.31%
Oil (WTI) 103.9 0.2 0.16%
LIBOR 0.226 -0.002 -0.88%
US Dollar Index (DXY) 79.7 -0.104 -0.13%
10 Year Govt Bond Yield 2.66% 0.03%
Current Coupon Ginnie Mae TBA 105.7 -0.2
Current Coupon Fannie Mae TBA 104.3 -0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.41

 

Markets are higher this morning as earnings continue to come in and for the most part the look good. GE and Goldman reported better than expected earnings this morning, although Google disappointed last night. So far (and it is very early) it looks like the market’s fears of a bad earnings season look unfounded. I think the biggest worry was going to be the banks, and so far, so good.
Markets will be closed tomorrow, and bonds close early today.
Initial Jobless Claims came in at 304k, which is a strong number historically. What is “normalcy” in initial jobless claims? Going back to 1970, it is about 375k. Here is a chart of initial jobless claims going back to 1970, so you can get some historical perspective:

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The Fed released the Beige Book yesterday. Overall, it shows activity increasing since last month, which isn’t surprising – the big question is whether it is a rebound from weather-related weakness or something sustainable. Certainly some of the manufacturing data we saw recently (industrial production, capacity utilization) seems to imply the latter. I think people don’t appreciate the industrial production reports that came out yesterday – the headline numbers for March were great on their own, but the upward revisions to February numbers were huge.

On the labor front, wage pressures remained contained, except for the Dallas district. Most districts are reporting labor shortages in skilled labor. On the negative side, food prices are rising, and rising food prices plus stagnant wages can be an economic damper. The main takeaway is that the economy seems to be accelerating and it is looking like it is more than just a rebound from weather-related weakness. That said, the weakness in housing starts continues to be a head-scratcher. We are still at levels that represent the bottoms of previous recessions. Any excesses of the bubble were corrected long ago.

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I suspect that a sudden increase in household formation is going to catch the builders absolutely flat-footed. Once the job market improves for young college grads, there is going to be a stampede for starter homes.
Yet one more data point that things are improving: banks are increasing their business lending. The big banks reported an 8.3% increase in commercial loans outstanding compared to a year ago. This is part of the reason why the bank earnings are not as bad as feared – business lending is replacing lost mortgage banking income. This portends an expansion in capacity, and almost by definition, hiring.
Recovery summer may finally come this year. Kind of messes with the whole “sell in May and go away” theory, doesn’t it?

56 Responses

  1. Hey! Frist!!

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  2. I found the “land” debate. I have no idea what he was trying to say. I suggest next time just responding with “this land is your land, this land is my land”

    http://www.jammiewf.com/2014/brain-patient-cant-find-doctors-thanks-to-obamacare-its-scary-because-this-is-america-i-didnt-expect-to-go-through-this/

    Also — the first thing you should do if you’re in an ACA plan and having problem is to call a caseworker with your member of Congress. If we are to have a politically determined system, you need to work it in that way.

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  3. I don’t think I’m cut out to be a federal moocher–I may have to work my way up to it.

    The first time I applied for this FDA job (and, mind you, it’s a GS13 position–not a file clerk or even janitorial assistant) I foolishly assumed that they were kidding about the college transcript. One, I’d been a commissioned officer and you can’t be one without your branch of service making sure you graduated from college before they commission you. And I’m fairly certain that the armed forces are a branch of the federal government. Two, I’ve been working as a scientist for over 20 years and have 13 publications to my name; I’m pretty sure I’ve got the knowledge, skills, AND experience to be a federal biologist.

    Oh, no. They really, really wanted that college transcript.

    So this time when I applied I dutifully sent them my college transcript along with updating my answers to their job-specific questions (not that my answers had changed, but I wanted that fresh date/time stamp on them). Same exact job, since they hadn’t filled it the first time I applied.

    This time they disqualified me because my dates of employment on my CV are listed as “September 1992 – May 1996. Research Associate/Histology” rather than “09/92 – 05/96. Research Associate/Histology”.

    Now I know why this job has been posted three times. I expect it will be posted a fourth time, as the person doing the hiring would really like to hire. . . me. He’s said that, the friend who recommended me for the position says it’s true, it’s just figuring out how to get the damned GS5 who’s reviewing the applications to put my name on the certificate.

    Sigh.

    /rant

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  4. How much fun is it cited wickard when all of a sudden it’s progressive’s who are on the wrong end? lots. see Ultra at 10:05 morning plum

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  5. Get that GS 13, hold if for 3 years, and parlay your winnings in to a lobbying/consulting gig.

    that’s what I did.

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  6. You’d think that being a service-connected disabled vet would be gold, wouldn’t you?

    A friend has suggested that I contact my congressman.

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  7. ” I suggest next time just responding with “this land is your land, this land is my land” ”

    That’s literally the thesis being argued. Pete Seeger as a constitutional scholar.

    If anything it supports the rancher’s argument.

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  8. NoVA, he didn’t even get the Wickard reference. It’s just utilities = Koch = bad.

    On a broader note, I’m starting to come to the conclusion that interacting on the PL is actually degrading the quality of my own commentary.

    Michi – that doesn’t surprise me at all, but I’m sorry it’s the case for you.

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  9. “Pete Seeger as a constitutional scholar”

    We’re so fucked.

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  10. Michi – that doesn’t surprise me at all, but I’m sorry it’s the case for you.

    If you’re referring to the disabled vet card, I’ve never once played it in my life before (in fact, I usually didn’t even divulge the information unless required to). The one time I try to use it–after being told repeatedly that I should–it becomes so much flotsam.

    This is why I don’t think I’m cut out to be a federal moocher–I don’t have the patience to deal with this kind of crap.

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  11. “I don’t have the patience to deal with this kind of crap.”

    we’re at like act 2. when she turns, she will be a powerful ally.

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  12. “If you’re referring to the disabled vet card, “

    No, the hiring bureaucracy, especially the problem with the date formatting on your resume.

    I decided long ago that I would never bid for any kind of federal contract or do any work for the government. Too much hassle.

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  13. Great quote:

    ““Whenever I hear the word ‘hope’ these days, I reach for my whiskey bottle,””

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  14. FWIW, when I was unemployed, I applied to a bunch of jobs for the government. There aren’t a lot of vets out there who actually understand financial markets and where the bodies are buried.

    I got zero interest from them. So whatever the secret password is, I don’t got it either.

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  15. It’s like anything else. I got my fed job through a connection.

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  16. This time they disqualified me because my dates of employment on my CV are listed as “September 1992 – May 1996. Research Associate/Histology” rather than “09/92 – 05/96. Research Associate/Histology”.

    What else can you expect, Julia? One must comply with instructions and requirements. If hired, you probably would, first thing, fail to put cover sheets on the TPS reports.

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  17. I got my fed job through a connection.

    You’d think that the facts that (1) I was referred by an NIH researcher, and (2) the hiring authority wants to hire me (me, not a simulacrum of me) would be a “connection” in this sense.

    What else can you expect, Julia?

    Today is really not a good day for that.

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  18. I’m not anti-corporate by a long shot, but this is absurd.

    “When ‘Liking’ a Brand Online Voids the Right to Sue

    By STEPHANIE STROM
    APRIL 16, 2014”

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  19. Latest on the Detroit municipal bankruptcy.

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  20. “The city gained flexibility, in part, by agreeing to assume a higher rate of investment return by the funds themselves. Projecting a rate of return is an essential part of fiscal policy, but experts often debate what is both realistic and sustainable for public pensions, and the federal bankruptcy judge in the case will be the ultimate arbiter. ”

    okay then.

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  21. I love that the mask has finally slipped over at PL. they’re all Cao inside. And this rancher in NV has pushed them to reveal who they are.

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  22. I’ve generally been avoiding PL other than HHR. Maybe I’m gonna have to go look.

    I mean, half of them are convinced I’m a Closet Conservative, anyway, so what can it hurt?

    when she turns, she will be a powerful ally.

    That’s just crazy talk.

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  23. 6.75% is not an unrealistic assumption for future returns on the fund. If they were assuming high single digits, then yes I would say they are sweeping their problems under the rug. 6.75% is fair.

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  24. I love that the mask has finally slipped over at PL. they’re all Cao inside. And this rancher in NV has pushed them to reveal who they are

    You are just realizing what many of us have known for years? Greg, the new Waldman character, and all their flock are by turns laughable and appallingly evil and malicious. No one with a serious mind should be deceived they are otherwise. I can’t read comments any more, but they are nothing more than guilty pleasure entertainment anyway. Most of those people are deeply sick in the head and heart.

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  25. The plot thickens; at the advice of Fairlington Blade, who is a faceless government scientist himself, I went and looked at my resume as submitted on USAJobs. They formatted it; it matches their requirements.

    I’ve been told by a lawyer that the words “arbitrary and capricious” are a powerful tool.

    Anyone got any advice on how to find out the name of an HR functionary and his/her supervisor?

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  26. Call your HoR local office and tell them. Might light a fire beneath an ass or two.

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  27. What agency is it and what’s the name. is It HHS? give me 10 mins.

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  28. Call your HoR local office and tell them.

    That’s where I’m starting. Thanks.

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  29. NoVA:

    HHS. The job is with the FDA. Interdisciplinary Scientist.

    If you’d like, I can forward you the e-mail I got from HHS.

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  30. sorry — i mean the staffer’s name. novahockeypl@gmail.com if you’d like.

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  31. “You are just realizing what many of us have known for years? ”

    Well. sometimes you don’t want to believe.

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  32. Yeah, it’s been interesting to see the same people who freak out at stop and frisk call for A-10 strikes on the guy. And as far as I can tell they mean it to due to the whole “militia are worse than Al’Queda” argument.

    However, as I mentioned earlier what I’m noticing about myself is how the site’s evolution of tone and discourse is making me worse at making my own points and also thinner skinned.

    QB – did you read that climate article I linked from the NYT? It has an interesting aside about how the left can be self marginalizing as the subject being profiled decided to disband his annual environmental festival because it was getting too popular and thus undermining it’s authenticity.

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    • Jnc, no have not looked at link. I will try to remember. You can probably tell I am really busy and going in a lot if different directions lately. No let up in sight.

      I am surprised that Alethiea gets under people’s skin so much. S/he is just a clown to me. Dumb as a rock but in my experience not as malicious and strident as most of the rest of the pack. There are a couple of lefties who can be interesting. Desertgoathead has ideas that are pretty scary to me but can have interesting discussions and is very smart. Leftcoast can be. Not many others. What a sad place it became.

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  33. ” also thinner skinned.”

    What’s her name freaked me the hell out a while back. it’s was so eerily calm about the whole thing. “there will be no violence in our system.” like ” I’m sorry, Dave. I’m afraid I can’t do that.”

    that and the “oh, it’s pretend philosophy.”

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  34. Worth a note:

    “The government can’t agree if Fannie and Freddie will cost taxpayers $19 billion or make $181 billion

    By Dina ElBoghdady
    April 17 at 2:14 pm”

    http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/17/the-government-cant-agree-if-fannie-and-freddie-will-cost-taxpayers-19-billion-or-make-181-billion/

    Anyone know how the minority shareholder lawsuit is playing out?

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  35. However, as I mentioned earlier what I’m noticing about myself is how the site’s evolution of tone and discourse is making me worse at making my own points and also thinner skinned.

    There’s a reason some of us liberals don’t post there as much as we did. NoVA, you’re thinking (I think) of Aletheia. She (or he–whatever!) was the first one to call me a conservative, so I’ve got a soft spot in my heart for her/him. Anyone who could be that misguided about me is probably misguided in general.

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  36. Aletheia probably thinks the Daily Worker is right leaning…

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  37. She would be the first to tell you that it doesn’t reflect a communist viewpoint, at any rate.

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  38. yep. really got under my skin for awhile. until i realized … she’s a clown.

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  39. “communist viewpoint, at any rate.”

    that’ was the creepy part.

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  40. I drop into PL once in a while, but not like I used to

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  41. We celebrated our Seder on second night, so that Rosanne could participate [4-14 would have been impossible for her].

    The twins, Julia and Rebecca, age 5, were pretty hyped, having made their own matzah on Sunday, and having heard the story of Moses and Aaron and Miriam.

    During the Ten Plagues discussion, Julia asked why God had to do so many bad things. I said because each time Moses asked Pharoah to let his people go, Pharoah would first say yes, and then change his mind. So each time Pharoah changed his mind the punishment got worse. Then she asked “What is God?” I asked her what infinity was, and she said a number so big it means everything, and you cannot imagine how big it is; and I said it was sort of like that about God, but sometimes when we know we shouldn’t do something a little voice inside us warns us, and some of us think that is how God talks to us. Julia said “I never hear that.” We laughed, and Rosanne added that she hears that little voice too often, and we laughed some more. Meanwhile Dara [the chemist and pharmacist] was whispering to me “no God… convenient myth… neuroelectrochemical signals”. I suggested to Dara that she work on that angle for delivery to 6 YOs next year – but I agreed with her that at some point they would have to understand both the concept of myth and how the brain works.

    Well, next morning [yesterday] I took the twins to school, and Rebecca came in while I was brushing my teeth. I had let the water run.

    She chided me for wasting water, and then said “that little voice inside you should tell you that, Nonno.”

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  42. NoVA: I’ve got a new nickname for you.

    Darth Maul

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  43. i’m not sure i understand why.

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  44. Ping

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  45. NoVa, I suspect it’s the black and red motif of your icon.

    Mark – Nice story. You can also just tell Dara that next time you’ll just throw on the Ten Commandments with Charlton Heston and let Hollywood explain it to them.

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  46. Was that one Ping only?

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  47. Yup!

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  48. Jnc – Heston! That is how we will prepare for next year, of course.

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  49. “Ten Commandments with Charlton Heston and let Hollywood explain it to them.”

    or History of the World, Part I … I give you 15! …. 10! Commandments!

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  50. Excellent clip on Bundy standoff.

    #OMFGIt’sAnarchy!!1!1!!1!!111Eleventy!111!!!

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  51. I have been able to have decent discussions with Think Think and Shrink. But some of the rest, like Reagan, and that dude with the Sarah Palin ’16 avatar are impossible

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  52. I once told Aletheia that executive pay was none of her business, and her argument is basically since everyone uses some public goods like roads, etc that everything is the business of the government

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  53. I could be wrong, but I think the internet and mass media really have made people dumber or at least have led to an epidemic of people reciting the same rote talking points having a veneer of intellectual substance ad nauseum. You always had the populist, union-driven, resentful left. But now you have millions of them spouting the same dime-store Marxist and Keynesian rationalizations cranked out by the Krugmans and Warrens of the world, filtered down from their more radical progentors. Now you have people like rukidding, alethiea, and tick spouting inanities about the labor theory of value without the slightest ability to understand or defend what they are saying, and then going on about how stupid the other side is.

    When you tell a moron like Alethiea or rukidding that, you know, profit actually isn’t another “cost” that is added on but is the difference between your cost and what you can get for your product, and if there isn’t any profit you can’t be in business, they can’t even process the ideas. They just go back to reciting the jargon they read third-hand on some website where people pile up their Marxist platitudes that have been recycled twenty times already.

    Another lassic example: all keyboard liberals at PL can recite like Pavlov’s dog that Obamacare is necessary to solve the “free-rider problem.” They are oblivious to the fact that this problem is itself a function of government, and to the fact that the free-rider problem is the problem with everything else they advocate in the realm of economic regulation.

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