Morning Report – Further look at the jobs report 2/9/15

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

This week is going to be relatively data-light, with retail sales being the highlight.

Friday’s jobs report was undeniably strong, but I would keep in mind one thing in the back of my mind: We are in a sort of a sweet spot, where lower energy prices are helping things along, but the big layoffs in the energy sector have yet to materialize. If energy prices stay here, producers will cut production and staff. Also, the Fed will start hiking rates in June and then all bets are off.

Note that last week, Ginnie Mae TBAs underperformed Fannie Mae TBAs are rates shot up. I suspect this is still related to the new MI changes. The bottom line is that conforming pricing is getting more attractive relative to government pricing.

The NY Times comments on the social engineering aspects of the housing market. Note that one of Bill Clinton’s first acts was to prod Fan and Fred into increasing the homeownership percentage. That percentage is now back to 1994 levels more or less. Mel Watt is trying to push it up again, but really has limited tools given that he has to explicitly protect taxpayers and there is still not much of a private mortgage market.

Never one to ignore technical progress, NAR is urging Congress to allow people to use drones to market homes…

21 Responses

  1. Drone marketing. It’s not drones that kill people, its realtors.

    FRIST.

    Like

  2. This is actually a good interview:

    http://www.vox.com/a/barack-obama-interview-vox-conversation/obama-domestic-policy-transcript

    “The winner-take-all aspect of this modern economy means that you’ve got some people who just control enormous amounts of wealth. We don’t really resent their success; on the other hand, just as a practical matter, if we’re going to pay for schools, roads, et cetera, and you’ve got, you know, 50 people or 80 people having as much wealth as 3 billion, you know you’re going to have problems making sure that we’re investing enough in the common good to be able to move forward.”

    I think the issue comes with what’s covered under “et cetera”.

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    • jnc:

      This is actually a good interview:

      You really think so? Not much (ie zero) in the way of challenging or tough questions. Mostly just a bunch of softballs. Klein could have limited himself to simply posing subjects – “O-care”, “the economy”, “race” – and let Obama opine about whatever he wanted and the interview wouldn’t have suffered for it. More like SOTU 2.0 than a legitimate, journalistic interview.

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      • SCOTUS further signals that it plans on inventing a constitutional right to SSM.

        http://www.nationalreview.com/bench-memos/398204/irresponsible-supreme-court-denial-stay-alabama-ssm-order-ed-whelan

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        • “Well, I don’t like the Supreme Court,” Posner says. “I don’t think it’s a real court. I think of it as basically … it’s like a House of Lords. It’s a quasi-political body. President, Senate, House of Representatives, Supreme Court. It’s very political. And they decide which cases to hear, which doesn’t strike me as something judges should do. You should take what comes. When you decide which case to hear it means you’ve decided the cases ahead of time.”

          Posner, the extraordinary 7th Circuit Judge, is surely correct about the Supremes and political questions. The Supremes do pretty well on standard legal stuff like where is the border between Louisiana and Texas when the Sabine jumps its banks and on cases like that you can expect 9-0 votes.

          Posner himself has reversed on SSM. However, that was in the light of cases like Lawrence, which pretty much lead a Circuit Judge to think Baker is dead.

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        • Welcome back, Mark.

          I agree with Posner.

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  3. But the IRS would totally never do this.

    http://m.theatlantic.com/politics/archive/2015/02/the-cia-lawyer-who-led-efforts-to-spy-on-the-senate/385286/

    Only a paranoid Bagger would think this way.

    CIA personnel are totally different than other government personnel.

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  4. I think it’s a worthwhile window into what Obama thinks in more depth than the usual MSM ones.

    The lumping of all spending besides roads and schools as “et.cetra” is revealing. And Klein did try to press him on redistribution being justified on it’s own terms but he dodged the question.

    I suppose I’m grading based on the low standards of existing MSM interviews.

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  5. Appeals court was derelict there too.

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  6. Unintentionally revealing view of prison as a problem in and of itself.

    “Well, the real growth in the prison population comes from county-level district attorneys sending violent people to prison. And there’s a lot to be said for nonprison approaches to a lot of people who are in prison for violent crimes. But that’s a political issue that we haven’t even begun to address, in part because it’s politically scary.”

    http://www.slate.com/articles/news_and_politics/crime/2015/02/mass_incarceration_a_provocative_new_theory_for_why_so_many_americans_are.2.html

    No there’s not a lot to be said for non-prison approaches to violent crime. Prison approaches are the exact right approach for violent crimes.

    Like

    • jnc:

      Worth a note:

      A bailout in the true sense of the word. I await for the Occupy Main Street movement to start protesting.

      Like

  7. Some bailouts are more equal than others.

    Like

  8. @jnc4p: “No there’s not a lot to be said for non-prison approaches to violent crime. Prison approaches are the exact right approach for violent crimes.”

    Which begs the question (to me) whether or not prison approaches are the right approach for non-violent crimes, and whether or not it’s wise to mix non-violent offenders with violent offenders.

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    • KW, typically prison is a bad approach to nonviolent crime, if the county has enough adult probation officers.

      Avoiding mixing the non-violent with the violent is good for minimizing the educational effect on the non-violent. But without an active probation system there is not much hope for reclaiming many nonviolent offenders.

      I even have a fifty year old number from one county for you. In 1968, Travis County had a 94% non-recidivism rate on its probationers. Probation was selective, of course, non-violent and non-repeat offenders.

      Liked by 1 person

  9. So true, Amiright?

    *They* fight the good fight. (Wipes tear away)

    Like

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