Morning Report – Slow News Day 8/27/14

Stocks are higher this morning as the S&P 500 crossed the 2000 level yesterday. Bonds are following the rally in Europe. The German 10 year hit 90 basis points this morning.

Slow news day. Going to be a short missive because there isn’t much to talk about.

Mortgage Applications rose 2.8% last week. Purchases rose 2.6% while refis rose 2.8%. Refis were 55.7% of all mortgages originated.

As European economies continue to struggle, the speculation is that European Central Bank Head Mario Draghi will announce some sort of quantitative easing early in September. Blackrock was just appointed as the ECB consultant for the ABS purchase program, it looks like the ECB is serious about going down this route.

The 2008 meltdown was worse than the Great Depression, according to Ben Bernanke. “Of the 13 most important financial institutions in the United States, 12 were at risk of failure within the period of a week or two.”

10 Responses

  1. The NY Times unintentionally makes the Republican case on Obama being a lawless president who ignores the Constitution:

    “But under the Constitution, a president may enter into a legally binding treaty only if it is approved by a two-thirds majority of the Senate.

    To sidestep that requirement, President Obama’s climate negotiators are devising what they call a “politically binding” deal that would “name and shame” countries into cutting their emissions.”

    Faithfully executing the laws and sidestepping them are mutually exclusive concepts.


  2. “deal that would “name and shame” countries into cutting their emissions.””

    Really? And who would be shamed in this scenario, other than the U.S. and maybe the U.K.? China? Africa? The former Soviet Union? Ya think?

    “Oh, no, they said we are polluters. We must stop immediately. Ha-ha-ha-ha!”


  3. This is the rub:

    “In African and low-lying island nations — places that scientists say are the most vulnerable to the impacts of climate change — officials fear that any agreement made outside the structure of a traditional United Nations treaty will not bind rich countries to spend billions of dollars to help developing nations deal with the forces of climate change.”


  4. Hunh, woulda never figured.


    • I wanted to read George’s link about polygamy but it was out of date by the time I got there. So I read some other news stories. Best as I can tell, Utah has a statutory provision limiting cohabitation in some way that was declared invalid for some purported constitutional weakness. Too sketchy to begin to analyze, but not a ruling validating multiple marriage, from the weakly written news stories. If National Law Journal or Volokh cover it later I will link.


      • Mark:

        Here is Mcwing’s story:

        Not especially edifying, unfortunately.


        • Excellent article, worth reading:

          The solution was to limit government. Men are not angels, so they need to be governed, but government is made up of imperfect men who are easily corrupted; therefore, their power must be limited. Hence, federalism was born.

          The Founders saw limited government with all its checks and balances on power as foundational to liberty and virtue. They understood what many people fail to grasp—that an overly intrusive government corrupts virtue (as is evidenced in “too big to fail” policies, where businesses are bailed out when they should be allowed to fail, thereby giving them the opportunity to learn from their mistakes and come back stronger and better). If you’re not free to choose between good and evil, between virtue and vice, between success and failure, you don’t learn accountability and responsibility; you’re not choosing to be virtuous.

          A totalitarian government suppresses virtue more extremely, as people are not free to choose the good but are coerced to comply with whatever the state deems “moral.” Coerced morality in whatever form is not virtue. As has been said, “The answer to ‘1984’ is 1776.”

          Madison was fervently opposed to the government being an enforcer of morality because it is a wretched caretaker of the soul. He believed that if men are left to themselves, they will be better off. Just as he had faith in the free markets, he had faith in the individual to flourish, guided by the “invisible hand.” “If industry and labor are left to take their own course,” Madison said, “they will generally be directed to those objects which are the most productive and this in a more and certain and direct manner than wisdom of the most enlightened legislature could point out.”

          The wisdom of people as individuals, not the collective, was paramount in Madison’s thinking. He believed in competition, consequences, and allowing people to pursue their own self-interest, according to their own values and religion. With this in mind, he and the Founders constructed a government in which power is so dispersed that no one faction could form a majority and violate the rights of others. If government remained limited, even unruly factions would not gain power over the rest of the citizenry. Of course, a caveat must be added here: Even Madison would have recognized, and did, that if there is a complete breakdown of morality in society, to the point that there is not “any virtue,” chaos would ensue and, inevitably, tyranny would be the result.


Be kind, show respect, and all will be right with the world.

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