Figured Michi might appreciate this one…

An open letter to Michigan football fans:

Dear hated rival,

As a Buckeye fan, let me offer my congratulations on the Harbaugh hire! It really is great news. It makes Michigan football immediately relevant, boosts the Big Ten’s profile, and gives Buckeye fans like me a team – and a rival – that’s worthy of respect. When Michigan is strong, everyone wins: Michigan, Ohio State, the Big Ten; college football.

Sure, watching you guys suffer a seemingly never-ending variety of painful humiliations over the last several seasons has been a rare joy. Not to mention the sweet taste of winning 12 of our last 14 games. But the truth is, it’s hard to get excited about The Game when Michigan is so damn mediocre, even downright bad.

At least in the 90’s, when you were having your way with John Cooper, the Buckeyes often arrived as one of the nation’s top ranked teams, only to see their season ruined at the hands of a multi-loss Michigan squad.

And while those games added to the rivalry’s intensity and mystique, the deeper truth is that they helped mask a trend that became all too clear these last seven years: that Michigan football was in serious, steady decline.

To wit: over the last 22 seasons, Michigan’s average record is 8-4 (184-90). They’ve won just four Big Ten titles, and have only two serious national title runs, converting once in 1997. During that same time, Ohio State has averaged ten wins per season (224-54-1), won 11 Big Ten titles, the 2002 national championship, made three national title game appearances, earned a spot in the first College Football Playoff, and finished in the top-five 13 times.

The comparison is stark, and leads to an inescapable conclusion; that for more than two decades, Michigan has been a second-tier power.

After the debacles known as Rich Rod and Brady, the thought of spending years in the wilderness, maybe never returning to true prominence, had to look not just horrifyingly possible, but feel almost inevitable.

One person, and one person only, could save you from this tragic fate: Mr. James Joseph Harbaugh. And wouldn’t you know it, just when you’d reached a nadir of despair, the numbskulls in San Francisco were kind enough to throw you a bone; a huge, meaty, gravy-slathered bone.

Dumb f-ing luck!

But do you know the last school the football gods blessed so generously? Why, The Ohio State University, who just happened to have one Urban Francis (Frank really, but Francis sounds better) Meyer III, tanned, rested and ready to work, just as we were staring into our own personal abyss.

So what’s that tell you? Well it tells me that Woody and Bo have had enough. It tells me they’ve been busy at work, pulling angelic levers so that our shared corner of the college football universe can once again be in proper alignment.

It means no more Earle and no more Coop. No more Lloyd. No Rich Rod nor Hoke, or Fickell for that matter (though he’s fine as an assistant). No, the time has come for giants to face off in battle. We offered mighty Tress, but the call went unanswered. But this time, Michigan, you picked up the phone, and have bellowed back in a clear, prideful voice, “We are Michigan. We are tired of sucking, and shall suck no longer!”

To which we say, welcome back.

Morning Report – US multinationals flocking to Europe to borrow money 12/30/14

Markets are lower this morning on overseas weakness. Bonds and MBS are up.

House prices rose .76% month-over-month in October (up 4.5%) year-over-year according to Case-Shiller. Prices are back to their Autumn 2004 levels.

Americans spent about 5% more on rent last year, driven by a 2% increase in the number of renters and a 3% increase in prices. Zillow is predicting that rents will increase by 3.5% next year, while housing prices will increase by 2.5%. Note that the homeownership rate fell to 64.4% in Q3, the lowest since the mid 1990s. Is this number simply a return to normalcy, or are we going to see the homeownership rate increase? Certainly, policy makes a difference, and the government is back in the business of encouraging home ownership. So don’t be surprised to start hearing talk about another secular uptrend in housing…

The prospect of QE has driven risk-free rates lower in Europe, which has lured US companies to issue Euro bonds. The spread between investment grade Euro notes and investment grade dollar notes is currently 211 basis points, an all-time high, and a big increase from 145 bp a year ago. Companies like Apple are issuing billion in euro bonds yielding something like 1.65%. If you wonder why the big S&P 500 companies seem to be doing great, in defiance of what we see around us, here you go. International exposure matters. The local muffler shop cannot borrow at 1.65% while multinationals like Apple can. While the economy is improving, the stock market is painting a non-representative picture of the US economy.

Delinquencies ticked up to 6% in November, according to Black Knight Financial Services. Foreclosure starts ticked down to 73,900. Note Black Knight Financial Services (formerly known as LPS or Lending Processor Services) has filed for an IPO.