Morning Report – Is the labor market at a tipping point? 8/11/14

Markets are higher this morning on easing international tensions. Bonds and MBS are flat.

Not a lot of economic data this week – the highlights will be industrial production and capacity utilization on Friday and retail sales on Wednesday. Earnings season is winding down, with mainly the retailers left.

Goldman Sachs looked at student loan debt and the Millennial generation to determine how much student loan debt inhibits home ownership. It looks like $50,000 worth of debt is the tipping point – young adults with more than that in debt have a homeownership rate that is estimated to be 8 percentage points lower than graduates with less than $50,000 in debt. The conclusion of the study is this: The benefits of a college degree outweigh the costs, provided the degree helps boost income, and the student loan debt is not too large.

Bloomberg has a good backgrounder on the changing dynamics of the labor market. The balance of power is shifting more towards employees from employers. The missing piece of the puzzle has been wage inflation, and we may finally be at that point. Separately, eHarmony, the dating site, is getting into the career business.

Confounded by the rally in bonds this year. You are not alone.

Ellie Mae is buying AllRegs for $30 million in cash.

Stonegate reported second quarter numbers last week. Originations grew 37% versus Q1 and were up 59% year-over-year. These are not “apples-to-apples” numbers are Stongate bought Medallian and Nationstar’s wholesale business. Gain on sale margins increased 23 basis points.

11 Responses

  1. Please, America needs you more then Vermont!


  2. Can someone point me to a group that thinks all taxes are theft?


  3. Isn’t looting and smashing things the proper response when some punk tries to take a weapon away from a police officer?

    “KANSAS CITY Mo. (Reuters) – Police arrested 32 people after rioting and looting erupted in Ferguson, Missouri, late on Sunday and spread to neighboring towns in protests that turned violent over the killing of a black teenager by a police officer, officials said on Monday.

    “Crowds broke the windows of cars and stores, set a building alight and looted shops following a day of demonstrations over the death of Michael Brown, an unarmed 18-year-old shot on Saturday by a Ferguson police officer.

    “Police said Brown was shot after a struggle over a gun in a police car. It was not immediately clear why Brown was in the car. At least one shot was fired during the struggle, and then the office fired more shots before leaving the car.” –


  4. I don’t default to believing the cops side of ANY issue.


    • McWing;

      I don’t default to believing the cops side of ANY issue.

      Agreed. Don’t most police cars have cameras in them now?


  5. Yup. Plus, when your country is “over-lawed” it tends to be over-policed. Over-policing leads to killings of such criminals as sellers of untaxed cigarettes. Anecdotally, my experience w/ cops leads to believe that most cops are bullies. Bullies w/ power can be problematic.


    • Question for the lawyers:

      What are the implications, if any, of the O’Bannon ruling, and probable further rulings against NCAA compensation rules, on Title IX? I mean, isn’t the requirement that school spending on, say, football be equally matched by spending on women’s sports a monopolistic restraint on the compensation football players might be able to receive in a more “free” market for the services of college athletes?


  6. The police are also being militarized in terms of tactics and training and even firepower. I get the thrust, but I think we keep the National Guard separate from the police force for a reason. SWAT teams might as well be military units in foreign countries.

    That being said: nothing teaches errant police officers to behave more civilly that a nice riot where you burn and destroy your own neighborhood.


  7. From Ace re: the Mosal Dam —

    So the Mosul Dam? Not a matter of if, but when. And you’re screwed too, since our own BenK called dibs on The Mosul Dam in the AoSHQ Global Infrastructure Deadpool.

    Me? I’m gonna stick with my pick from 1990: The Three Gorges Dam. I’m stubborn like that. Tres Gorges is gonna go McCain ’08 one of these days, and then I can say “I told you so from the get-go.”

    But that brings us to my other point, which I will address below the fold: The Boogie Nights Corvette Rule.

    This is a well known engineering truism that I just made up on the fly: No matter how well you design a structure, vehicle, or process, it will never live out its design life if you delegate maintenance on said item to Greg Sargent.


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