Morning Report – Bad housing starts number 7/17/14

Markets are lower this morning after a lousy housing starts numbers. Bonds and MBS are rallying, with the 10 year below 2.5%.

Housing starts came in at 893k, the lowest level in 10 months. Building Permits came in at 963k, a disappointing number as well. Housing continues to punch below its weight, and is the biggest reason why the economy is not experiencing the robust recovery it should be. That said, it looks like all of the decline was in the South – the rest of the geographic areas were flat / up. This is a hard number to reconcile with the NAHB confidence number of 53. It shows that builders are happy to increase the top line through raising prices, not pushing through volume.

In other economic news, initial jobless claims fell to 302k, the Bloomberg Consumer Comfort index fell to 37.5 and the economic expectations index fell to 46. Philly Fed rose to 23.9 from 17.8.

Microsoft is shedding 18,000 jobs. Most of the cuts will be in the Nokia handset area.

Another major merger in the news: Reynolds America is buying Lorillard. Both stocks got whacked on the deal.

The DOJ and Bank of America remain at loggerheads over a settlement over mortgage backed securities. These securities mainly came from Merrill Lynch, who was bought by Bank of America during the crisis. The government pushed these mergers, and is now pleasing the populist peanut gallery by coming after the companies for doing what was requested in the first place.

Treasury Secretary Jack Lew is accusing CEOs and Boards who pursue their fiduciary duty of maximizing shareholder value of lacking “economic patriotism.” Yes, it has come to this. And of course Congress has a plan to limit this. The number that stuck out: $20 billion – the amount of money closing the loophole would raise over 10 years. In budgetary terms, $2 billion a year is rounding error. If the potential revenue is that small, maybe people should think about cutting corporate tax rates so that we are closer to the rest of the world. Certainly not possible before the election, but maybe after.

28 Responses

  1. A Malaysian Air 777 has crashed in Ukraine.

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  2. @McWing: The lesson I take from that is: never fly on a Maylasian airline.

    I won’t even get into Thomas Sowell’s characterization of the Maylays as essentially a thriftless, leeching, envious culture. 😉

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  3. How many people have died because the government refuses to lavishly fund longevity and immortality research? How many hundreds of millions have to die of old age before the administration finally does something?

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  4. BTW, as technology makes radical life extension more likely (and after sufficient TED talks explaining it to laypeople), I expect the above to be an actual argument made that, because we are reasonably close to radical life extension, the government has an obligation to fund it. And pay their Social Security for at least the first thousand years.

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  5. It’s really a shame that so many pundits can’t do original thinking but have to keep stealing our material from ATiM.

    http://www.bostonglobe.com/opinion/2014/07/16/the-way-alter-constitution-amendment-not-interpretation/Iq4HyjuKPUUMGGEj7WicDM/story.html

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    • qb:

      It’s really a shame that so many pundits can’t do original thinking but have to keep stealing our material from ATiM.

      Hah. I am a fan of Jacoby, but I think he gives too much credit. After all, for the people sponsoring these particular amendments, using the amendment process is only a final, last gasp effort after already having tried to get the judiciary to do it for them. It’s not like they are using the amendment process because it is the correct way of going about it. They are using it only because their efforts at doing it in less legitimate ways have been foiled.

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  6. @qb: “Yet even those of us who reject the notion that the Bill of Rights needs fixing should take a moment to applaud Udall and his allies for pursuing their goal the right way: by undertaking the challenge of trying to pass an amendment.”

    While I wholeheartedly endorse the notion of amending the constitution via the process provided for just such a thing, with the 2/3rd requirement acting as protection against caprice and minority agenda . . . I have a hard time taking Udall and his allies seriously. This amendment has no chance of passing, on the face of it.

    Although this would not strike me as so absurd, I reflect, if efforts to amend the constitution were much more common (and there’s nothing, constitutionally, the prevent constant amendment to the document, such that we might have thousands now, if that had been the way we had chosen to go . . . and, if the 2/3rd clause had not been in there, certainly we would have thousands of amendments at this point). If DC was littered with failed amendments (I mean, much moreso than it is) I might take Udall’s efforts more seriously, and not see them as 100% political posturing and flexing his ideological pecs for the base.

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  7. I was doing a little impromptu research and came across this in a report from the oral argument of the homosexual “marriage” case in the Fourth Circuit:

    “So now it’s up to the 4th Circuit’s three-judge panel to decide: Who would win in a bar fight? Equality Kennedy or federalism Kennedy? On your left, both physically and ideologically, representing the Kennedy who values the dignity and equality of same-sex marriages, is Judge Roger L. Gregory, who challenges David B. Oakley, the lawyer defending the Virginia ban, to explain why marriage is not an “individual right, the essence of which is the right to marry the person you choose.” Gregory adds, “How can Virginia define it to a point that the fundamental essence of marriage is unrecognizable?”

    I think it rather unlikely that anyone in the history of irony and question-begging has ever said anything as ironic or question-begging as that surreal comment by Gregory at the end. But then he’s a rabid, far-left activist who is completely incapable of even recognizing the nature of the issue.

    Progressives are sick in the head, quite literally.

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    • qb:

      I think it rather unlikely that anyone in the history of irony and question-begging has ever said anything as ironic or question-begging as that surreal comment by Gregory at the end.

      Indeed. But it seems to be of a piece with what the left pretty routinely does, accusing the opposition of doing precisely what it is that they themselves are doing.

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  8. I only wish the lawyer for Virginia had had the guts to say what ought to have been said:

    Virginia has defined it as it has always, universally been defined, as a uniquely male-female relationship. That is the very thing that makes it recognizable as what it is, its “fundamental essence,” the one and only common denominator of marriage throughout history and human society, and having the unique imprimatur of biology. It is the plaintiffs who are attempting to redefine it into something unrecognizable and without that fundamental essence.

    If marriage need not be male-female, why must it be limited to two people, be permanent, be anything at all? That is the question these cases really raise.

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  9. Referring back to some of the recent discussion of immigration and partisanship, I think it is all much simpler than some believe or portray it.

    The Democrats have always had an open-borders agenda. The only questions have been about how to package and position it. Tactics.

    Obama’s tactics have been transparent: he relentlessly demanded “comprehensive reform,” i.e., amnesty, knowing it is unacceptable, as a condition of real border enforcement. Now he blames Republicans for the open borders crisis, which was part of the goal all along, claiming they have blocked enforcement resources.

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  10. Ten years ago, the Cato Institute was among those organizations publishing what can now be easily seen–and what some of us just as easily saw at the time — as disingenuous and horribly flawed arguments that a federal marriage amendment would be unnecessary and improper. http://www.cato.org/sites/cato.org/files/pubs/pdf/pa570.pdf

    1. There was no forseeable risk of court-imposed nationwide SSM.
    2. It would violate federalism for the federal government to decide what states can recognize as marriage.
    3. It would cut off debate. (Lovely circularity. See. 1.)
    4. It was overkill!

    How absolutely ridiculous those arguments now obviously look. Indeed, most of the same people who made them were feverishly working for court-imposed, nationwide SSM.

    Edit: I should make my indictment of the author, Dale Carpenter, explicit. He is a radical gay rights activist, and there can be no doubt his arguments in 2004 were disingenuous. A federal amendment would have blocked his long-term goal of court-imposed SSM. So he opposed it … on the ground that it was unnecessary.

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    • qb:

      He is a radical gay rights activist, and there can be no doubt his arguments in 2004 were disingenuous.

      Either that or stunningly incompetent. Being a supporter of Cato, it is quite disappointing to me that this was published under its name.

      Claiming that the threat from the courts was “exaggerated” or “imagined” is pretty outrageous, and not just in retrospect. Given the advent of living constitutionalism and the known judicial philosophy of the liberal members of the court (even back then), I don’t think any serious legal observer can ever predict with confidence that a politically charged issue will be decided in a particular way based on fealty to the constitution or long-standing notions of federalism. With justices like Ginsburg and Sotomayor on the court, what the constitution actually says has become pretty much irrelevant to what the court might ultimately decide. In fact, even if a Federal Marriage Amendment was somehow passed, I would half expect the liberal wing of the court to contrive some way to ignore it and claim that SSM was still allowable – if not demanded! – by the constitution.

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      • Carpenter habitually styles himself a “conservative” of “libertarian-conservative” in order to give his radical views some kind of credence. He testified (gave his opinions) against a marriage amendment and had to answer specific questions like whether one was needed to protect DOMA. His answers, particularly his written ones, were extremely evasive. He has been running his “I’m a conservative” scam for years. He writes with Volokh and Ilya Somin, who are also pro-SSM libertarians but I don’t think are so dishonest. Carpenter is just plain a fraud IMO.

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      • It is not incompetence by Carpenter. It was and is all very calculated. He is quite smart. He of course later signed a brief advocating to overturn DOMA. He can only show that he has some semblance of integrity now if he advocates against a constitutional right to SSM and against use of full faith and credit.

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  11. @qb: “The Democrats have always had an open-borders agenda” … since it became clear that an open borders agenda would greatly favor them electorally.

    I don’t think it’s an ideological principal, and if our immigration was vastly highly educated, hard-working Republican types looking for a better life, the Democrats in Washington would be out on the border building the wall themselves. Immigration would be a threat to the US, hurting US jobs . . . never about how the demographics might impact them negative in future elections, of course.

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  12. @ScottC: “Indeed. But it seems to be of a piece with what the left pretty routinely does, accusing the opposition of doing precisely what it is that they themselves are doing.”

    This is a built in function of dysfunctional humans (and many humans of all stripes are, to varying degrees, less than ideal for some part of their life). It’s a common phenomenon in abusive or problematic relationships, referred to as DARVO: Defend, Attack, Reverse-Victim-and-Offender:

    http://www.shrink4men.com/2011/01/19/presto-change-o-darvo-deny-attack-and-reverse-victim-and-offender/

    Put another way, the Left is an abusive girlfriend.

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  13. KW, I think that is partly or perhaps largely true (D motive for open borders), but I do believe it coincides with a fundamental hostility towards America shared by Democrats of Obama’s kind. They really, really don’t like the historical America. Fundamental transformation ….

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  14. QB: I think that’s different, in a sense, or at least there is a difference in an openness to immigration + assimilation, and wholesale immigration without assimilation, or any obligation to assimilate anything in American culture, such as language or tradition.

    I don’t have an objection to large scale immigration of people who know how to or will learn how to speak English, that don’t require special areas of town or sections on packaging where everything is in their native language, etc. Immigration and resistance to assimilation are not entirely the same thing.

    But what experience has taught us is that there’s not a great deal of assimilation from illegals, even when granted amnesty.

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  15. The despicable Carpenter in 2011, weighing the pros and cons of the Perry case as a vehicle to force SSM on the country:

    “Moreover, a Supreme Court victory could be obtained at this point with little fear of a federal constitutional amendment reversing it. The public has come too far in supporting SSM for opponents to be able to muster super-majorities in Congress and three-quarters of the states against it. There would be a few years of drama after such a victory, but it would die off given sufficient time, as it has everywhere else.”

    http://www.scotusblog.com/2011/08/perry-as-politics/

    Ah, yes, having argued that such a right would not be court-imposed in the foreseeable future, just a few years later he was hoping for just that event and happy to say that a constitutional amendment, having been averted, was no longer a threat.

    No words can express my contempt for these people.

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  16. These experts willful misreading of Cannon and Adler is fascinating.

    http://www.bostonglobe.com/opinion/2014/07/18/death-blow-for-obamacare/ilXv6eZOTsQoBzw0vGzq1I/story.html

    But is there any doubt Roberts will fuck us again? Didn’t think so.

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  17. But is there any doubt Roberts will fuck us again? Didn’t think so.

    Tribe coached and cajoled Roberts exactly the same way prior to the 2012 ACA debacle.

    No, there is no question what Roberts will do. If there is one thing right wingers can count on, it is that judges like Roberts and Kennedy will reliably screw us over. They will grow in office. They will want to mix with the stylish crowd and be toasted at Georgetown cocktail parties. They will sell out.

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  18. There is nothing at all special, btw, about Tribe. He is just another ideologue.

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  19. @qb: ” They will want to mix with the stylish crowd and be toasted at Georgetown cocktail parties. They will sell out.”

    More importantly, they are married to women who want to mix with the stylish grown and be toasted and cocktail parties. When your wife is twisting your arm, it’s hard not to see the logic in a given argument. 😉

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    • National Review used to have a gag about the Strange New Respect Award for right wingers who sold out and were suddenly rehabilitated in the eyes if NYT, CBS News et al.

      Edit: I stand corrected. It was a Tom Bethell gag.

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  20. From that TPM item, on the off chance that anyone still had a shred of respect for Josh Marshall:

    “So that’s who you’re dealing with: some mix of civil war reenactor or Tea Partier decked out in revolutionary garb, with a mix of reckless aggression and comical incompetence. Here we have them break into nursing homes to photographs senator’s comatose wives; there Putin gives them heavy armaments designed for full scale land war in Europe.”

    Why do progs hate America?

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