Morning Report – Mortgage Credit is beginning to ease up 3/9/15

Stocks and bonds are higher this morning after Friday’s bloodbath.

Global bonds are rallying as the European Central Bank begins purchasing German and Italian government debt. Not sure what difference taking the Bund yield from 40 basis points to 30 basis points is going to make, but there you go. I wonder what economics students will think of this episode in 30 years. Grandpa, tell me again about the time when central banks were willing to buy their host country’s debt for dollars on the penny..

The week after the jobs report is typically very data-light, and this week is no different. The big events are retail sales on Thursday, and the JOLTS job openings on Tuesday. Which means bonds will probably be primarily influenced by events out of Europe.

The Bankrate 30 year mortgage rate didn’t move on Friday, but that is hard to believe given the big move up in rates. That said, mortgage rates have been lagging the moves in the bond markets.

Mortgage credit eased up in February, driven by jumbo and 97 LTV conventional. While we are at post-bust highs in credit availability, we are nowhere near where we were during the bubble, or even in the pre-bubble years.

How much do you need to make in the US to buy a house? Good question for the first time homebuyer. The answer is around 48k. Of course all real estate is local, and you need to make 142k to buy a home in San Francisco. Of course you could style in Cleveland on 142k, as you only need 32k to buy a home there.

34 Responses

  1. I came, I saw, I fristed.

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  2. I can totally see replacing the talent part of a beauty contest with combat readiness testing.

    http://www.theatlantic.com/photo/2015/03/beauty-in-the-ceasefire-a-pageant-in-donetsk/387247/

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  3. For Scott.

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  4. Interesting interview with Jim Webb.

    http://www.vox.com/2015/3/9/8161145/jim-webb-interview

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  5. Yeah Thomas is the dumb one who just goes along with whatever Scalia writes.

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  6. Much better line of attack for the Republicans on Clinton than Benghazi:

    “Clinton e-mails reinvigorate inquiry into allies who got special job status

    By Tom Hamburger March 9 at 2:14 PM”

    http://www.washingtonpost.com/politics/clinton-e-mails-prompt-another-inquiry-on-capitol-hill/2015/03/09/db3cd3b4-c374-11e4-9ec2-b418f57a4a99_story.html?hpid=z1

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    • “Clinton e-mails reinvigorate inquiry into allies who got special job status”

      Yep, JNC, that would have been fruitful. But now 47 R Senators, including some presidential hopefuls, have sought to undermine negotiations with Iran, thereby grabbing the bad headlines for themselves and shooting themselves in the testacles.

      Of course, this is over the top, but Scott warned us of the press’ power:
      Traitors

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      • Mark:

        But now 47 R Senators, including some presidential hopefuls, have sought to undermine negotiations with Iran, thereby grabbing the bad headlines for themselves and shooting themselves in the testacles.

        Agreed. A big political mistake.

        Although Andrew McCarthy makes a compelling case for why the Senate needs to do something to protect its turf (and the constitution) against the long term effects of an imperial executive.

        On that last point, it has become the approach of transnational progressives to circumvent the Constitution’s treaty requirements. Presidents sign bilateral or multilateral international agreements that often contain statist and counter-constitutional provisions that no president (except maybe Obama) would dare propose as legislation. Knowing there is no chance of getting such an agreement approved, the president does not submit it to the Senate, and it is never ratified. Nevertheless, the agreement is approved by other countries, which start acting on the presumption that the president’s signature binds the U.S. In Washington, the administrative state, and particularly its sprawling complex of executive-branch bureaucracies (including the State and Defense Departments), begin to conduct their affairs as if the agreement were binding. The federal courts may even start citing the unratified treaty in legal opinions. On the basis of all this, the international lawyers and organizations such as the United Nations, the Organization of Islamic Cooperation, and the European Union — all of which have an interest in being able to trump the U.S. Constitution’s protections of individual liberty and American sovereignty — begin to argue that the unratified agreement has transmogrified into “customary international law”; thus, the argument goes, lest it be considered an international outlaw, the United States must abide by the terms of the agreement even if the Senate has not ratified it. This hocus-pocus works, at least as a practical matter, because the Senate fails to defend its institutional turf by speaking up and conveying dissent in a formal way. Senators seem to think they need do no more than resist approving international agreements. But as we’re seeing with Obama’s Iran negotiations, they are sometimes not even asked to approve. In any event, it is not sufficient to refrain from saying “yes”; the Senate needs to take unambiguous action by saying “no.”

        http://www.nationalreview.com/article/415104/gop-senators-open-letter-iran-first-step-andrew-c-mccarthy

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  7. Beginning of the end for cable.

    “HBO Now is coming to Apple — without cable service”

    http://www.vox.com/2015/3/9/8176899/apple-event-iwatch-macbook-hbo

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  8. “Beginning of the end for cable.”

    Beginning of the long, intractable end. If other channels start breaking and competing with each other on price, driving individual channel price downward, it might move faster. I already get HBO along with super-basic cable for less than other options for pure Internet and HBO as a single channel. It’s a Comcast specific bundle (that may not last forever) but it would be more exciting if we were getting some other pay cable channels, including low-cost for commercial channels like TNT. If we can get it to where Internet + the 10 or so channels you really want is less than a typical DirectTV or Cable subscription then, indeed, cable is dead.

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  9. @jnc4p: “Yeah Thomas is the dumb one who just goes along with whatever Scalia writes.” He’s also lazy.

    Of course, liberals aren’t racists and don’t use cliched racist tropes when it’s convenient for them. 😉

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  10. Ended up sitting across from a couple of (true) Scot’smen last night. Both are engineers with energy companies and have moved to the U.S. in the last couple of years, they both desired to reside in the US permanently. Interestingly, they both would have voted for Scottish independence. Also of interst is there reflexive appreciation of the NHS. Our system was deeply inefficient, according to them, with “too many middlemen.” I pointed out that the NHS is the largest employer on earth and asked them why they thought it was any more efficient than the U.S. system. Both were surprised at the size of it and couldn’t respond re efficiency. In fact, not one single claimed advantage involved actual health care at all. Also, neither had used that system in decades as they’ve had private insurance the entirety of their adult lives.

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    • McWing:

      reflexive appreciation of the NHS

      Yup. I’ve said it here many times before. They all love the idea of the NHS, without reference to the reality of the NHS in practice, which is a constant source of complaints and the need for political plans to “fix” it.

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  11. @Scott, do you remember the TV ads for the local ambulance chasers there? The guy in the ad lost his leg or something and the lawyer got him 10,000 pounds.

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  12. This is going to be a political fiasco for these guys. When will Republicans learn the basics of politics?

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  13. @markinaustin: “Of course, this is over the top, but Scott warned us of the press’ power:”

    And worse for Republicans that it’s in the New York Daily News. It’s the “right wing” alternative to the NYT. Although only in such a solidly liberal town could it be considered “right wing”, sort of the way only in NYC could Bloomberg be a Republican. 😉

    @brentnyitray:

    “This is going to be a political fiasco for these guys. When will Republicans learn the basics of politics?”

    And this is actually where we can look back to a golden age of enlightened Republicans. While 1994 may still be a little to fresh for liberals to look back at Newt Gingrich and the freshmen Republicans fondly, they’ve started citing Reagan as an example of when Republicans weren’t completely insane, talking about how he raised taxes in some places and worked with Tip O’Neil and granted amnesty and so on and so forth. Ultimately, the suggestion is that these old school Republicans were more civil and reasonable and not as far right as the contemporary crop. Which I think is hogwash. Reagan was a rock-ribbed conservative who made contemporary political compromises. Obviously the 1994 freshman class was made up of fresh-faced conservative stalwarts (though some, perhaps, became intoxicated by the building of their own political fiefdoms over time).

    But, my point being, there is one area where I think the old school Republicans were far better and that’s in basic political operations and theater. Reagan spoke directly to the American people, and had things to say. The things that he did that the press focused on, such as falling asleep in cabinet meetings (who wouldn’t?) or joking about bombing Russia enraged liberals but fell far, far short of how the Republicans are conducting themselves politically now.

    In my opinion, the president’s role in foreign policy is not only clearly dominant, it is perhaps the primary function of the office. Attempting to undermine Obama on foreign policy (as opposed to trying to undermine him on executive orders of amnesty) seems, at best, extra-constitutional.

    But the long standing problem of DC is, in my opinion, (A) that it is mostly made up of rich people from rich families and often rich political families that are as out of touch with the rest of America as a pampered Hollywood starlet and (B) it is an insular and out-of-touch environment in and of itself, where there is less and less awareness of not only how things play in Peoria, but that there even is a Peoria.

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  14. @scottc1: “In any event, it is not sufficient to refrain from saying “yes”; the Senate needs to take unambiguous action by saying “no.””

    Which is true, but I think there is probably a better way to say “no” that doesn’t look like attempting to usurp actual executive authority in a kind of “well, if he can do it, we can do it, too” game of brinksmanship.

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    • KW:

      Which is true, but I think there is probably a better way to say “no” that doesn’t look like attempting to usurp actual executive authority in a kind of “well, if he can do it, we can do it, too” game of brinksmanship.

      Agreed. Definitely a mistake.

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      • KW:

        Having said that, however, there is a clear asymmetry involved that puts the congressional R’s at a distinct political disadvantage if the R’s are going to concern themselves with adhering strictly to the niceties of separation of powers while Obama (and more generally the D’s) are actively trying to get around them.

        But ultimately it comes down to the populace. I fear that the nation at large is so ignorant of or unconcerned about the necessity for real, constitutional separation of powers, while the political class is so corrupted, that our constitutional order is doomed. We are too far down the road into, and the nation is already too accepting of, a-/unconstitutional governing for there to be any way back.

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  15. Meh. No on gives a shit either way.

    Here’s why:

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  16. FWIW, I don;t think this changes anyone’s vote. We are in full “root for the home team” mode politically at this point.

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    • Brent, if U are correct then the Ds win the presidency and the Rs hold the House and the Senate is up for grabs.
      It tends that way, so I think you identified the tendency, but i believe enough voters are not on a “team” to keep all of it competitive.

      And POTUS can be a beauty contest in the sense that personable and well spoken is worth a fortune, and sheer likability beats out “meh” [GWB over Kerry, even when GWB had a bare 50% approval rating; WJC twice].

      FWIW, I think Rubio wins the beauty contest hands down over the other Rs, and “likability” will throttle Cruz early on.

      I thus think Rubio would have an advantage over HRC, btw, but not over Mark Warner, if I can get her to stay home and him to run.

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  17. I have no intention of voting for any of them but I have met Ted Cruz and have heard him speak. He’s exceedingly likable. Beware of the media narrative.

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  18. I still say that Israel or the Saudi’s will nuke Iran if either feels remotely threatened. In the end the NORKS and Pakistani’s will sell their technology to the highest bidder. Was there ever stopping the inevitable arms race in the ME? I think not, we need to remember that the Pax Americana is over unless someone can figure out a way to dispense with 20 trillion in debt and the stagnant economy we know comes with it.

    American hegemony is dead. If not, tell me how it’s paid for?

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  19. “why the Senate needs to do something to protect its turf (and the constitution) against the long term effects of an imperial executive.”

    This was a better approach:

    “Some prominent Republicans, including Sen. Bob Corker (R-Tenn.), the Senate Foreign Relations Committee chairman, declined to sign Cotton’s letter. An aide to the senator said he’s focused on building support for a bipartisan bill that would require Congress to review any nuclear agreement with Iran. The president has said he would veto such a bill.”

    http://www.washingtonpost.com/politics/gop-senators-letter-to-iran-intensifies-dispute-with-white-house/2015/03/09/c873d354-c68a-11e4-a199-6cb5e63819d2_story.html?hpid=z1

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  20. @mcwing: “He’s exceedingly likable. Beware of the media narrative.”

    Especially if you’re a likable conservative female governor. Then, just, beware of the media, period. They’re going to be rooting through your garbage cans like hungry rats.

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  21. I’m definitely going to vote. Probably for the libertarian candidate for president, unless the Republican candidate really surprises me, or Hillary really surprises me (which I doubt). Then usually a straight republican ticket, depending on the races, unless there’s a compelling reason not to (a libertarian running against Corker? Or Alexander? At this point I can’t even remember whose up for re-election in 2016). This is just to satisfy myself, as the incumbent Democrats I vote against, like Steve Cohen, never lose, and whoever the Republicans are for senate and president are pretty much destined to take Tennessee. Both McCain and Romney won Tennessee, and although I voted for Palin in 2008, I voted for Gary Johnson in 2012. My vote apparently did not shift the election the way I had anticipated.

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  22. Plus for Hillary in my book: how much she’s hated by such a broad swath of people. I like rooting for the underdog.

    Negative for Hillary: Clintoncare. By comparison, Obamacare is an example of textbook laisez-faire capitalism.

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  23. @mcwing: “we need to remember that the Pax Americana is over unless someone can figure out a way to dispense with 20 trillion in debt and the stagnant economy we know comes with it”

    Even if we did, Americans are generally spoiled and pampered and spend far too much time feeling sorry for themselves and, if they have any historical knowledge at all, resent the white male slaveowners that stole this country from Sitting Bull. The political will and technical skill to bend the world to our way of thinking are both sorely lacking in the capitol. Even if we were debt free, we’d still either waste our military adventurism on the wrong objectives or satisfy ourselves by writing angry letters to despots about how we don’t approve of their building up nuclear arsenals.

    Like

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