Morning Report – Homeownership rate falls to pre-Clinton levels 4/28/15

Markets are flattish this morning as the FOMC begins their meeting. Bonds and MBS are down.

Consumer Confidence slipped in April, to 95.2 from 101.3. Consumers’ appraisal of current-day conditions continued to soften. Those saying business conditions are “good” edged down from 26.7 percent to 26.5 percent. However, those claiming business conditions are “bad” also decreased from 19.4 percent to 18.2 percent. Consumers were less favorable in their assessment of the job market. Those stating jobs are “plentiful” declined from 21.0 percent to 19.1 percent, while those claiming jobs are “hard to get” rose from 25.5 percent to 26.4 percent. The current reading is just about the historical average.

The FOMC meeting begins today. This is should be the last meeting where rate hikes are off the table. Given the weak first quarter, and subsequent economic weakness, the consensus has shifted markedly from a June hike to a September hike. As an aside, we will get the advance estimate for Q1 GDP tomorrow, and the consensus is that the economy grew at 1%. Granted, some of that is weather-driven, but there is no question the economy has slowed dramatically from the Q214-Q315 pace of 4.6%-5.0%. The jobs report next week will be huge.

Home Prices increased .93% month-over-month and 5.03% year over year, according to Case-Shiller. Overall, prices are about 10% below their 2006 peaks, however some hot markets like Denver and San Francisco have surpassed that peak already. Price inflation is being driven by a lack of supply, not wage growth, which means that prices will probably flatline once new home construction kicks into gear or until wages start increasing. We will get a good read on wages this Thursday, with personal income and personal spending.

The homeownership rate fell to 63.7% in Q115, from 64% in the fourth quarter of 2015. Pretty much all of the increase that started with the Clinton Administration’s homeownership initiatives in the mid 90s have been given back.

11 Responses

  1. More on CGI donations while Hillary Clinton was Secretary of State:


  2. You forgot to frist yourself, jnc!


  3. I see Michi is back from looting.


  4. I see Michi is back from looting

    A girl’s gotta get her new boots when/where she can!

    Since I can’t comment on PL, I’ll address (briefly, because I need to leave work in a few minutes) a couple of things that where being said on the Waldman piece about Baltimore, policing, and what is publically known about the Freddie Gray case here in town.

    Baltimore has had a long and troubled history of police brutality in general and in the black community in particular. The neighborhood where the rioting took place last nght was, in fact, one of the epicenters of rioting in 1968 when it was essentially burned to the ground. It has only been the last five to 10 years (my understanding from reading and talking to people here) that it has started to come back to life. That shopping mall and CVS, especially, are very new to the area. It was a source of great pride to the neighborhood that they were starting to come out of the shadows. If you’ve seen wide shots of the area, you can see Druid Park–home to the Baltimore Zoo–to the west, the mall, and lots and lots of abandoned row houses. It was a neighborhood struggling to overcome a lot of bad history.

    Lately–as in the year and a half since I moved here–there has been a very vocal attempt (supported by the mayor, the city council, the county council, and practically every politician in the state) to get the BPD under control. Our previous flashpoint (about 10 months ago, if memory serves) was a well-documented beating that a black man received at the hands of a police officer who had stopped him on the sidewalk for questioning. The man turned away from the officer and started to walk away when the officer slammed him to the ground and beat the pulp out of him; this was caught not only on onlooker’s cell phones but on security cameras on buildings in the area. One of the immediate responses by the mayor was to call for body cameras on officers and to revisit the MD Law Enforcement Officers’ Bill of Rights. Both of those are currently in progress. So, yes, there are systemic problems, but they are finally started to be acknowledged and addressed.

    Nobody around here thinks that policing in general has a racial bent (the police department is run by black men and is 50% black). There is a strong feeling that they have not been able to work their way out from under their history of brutality. I’ve got a theory about that, but I need to do some looking at statistics.

    I’ve been trying, since he died, to figure out how Freddie Gray died of a spinal cord injury. Unless it’s very high, that doesn’t actually happen very often. In light of the video from his arrest, where it appears that he has only partial control of his legs and he was complaining about breathing, I believe that something happend during the arrest that led to a second injury during the van ride. My current theory is that he either (1) tried to stand up and fell or (2) that during a sharp turn he fell off the bench and wasn’t able to stop a fall against a sharp object that he hit with the base of his skull giving him a C1/C2-level fracture. I heard a report that his spine was 80% transected. As–I think–jnc pointed out on PL, that ain’t easy to do. Just my theory. I have no doubt the autopsy report will be made very public.

    This a summary of a lot of reading, news watching, and talking to people since I moved here. It’s only a summary and I’ve skipped over details that are OBE by this point. For what it’s worth, Baltimore is hurt and in shock today. As you know, I work at Morgan State University, a historically black university. We had looting in the area last night and my co-workers, from our custodian to the dean of our school, that I’ve spoken with today are both heartbroken and furious. The idiocy of burning your own city down is just that. And, for what it’s worth, the mayor’s and city councilman’s use of the word “thugs” last night was not a mistake.

    Anyway, that’s my two cent’s worth at the moment. If you want to hear more I’ll try to pull something together with citations and some of the better reporting I’ve read/heard for the weekend.


  5. I appreciate your post on Baltimore Michi. To the best of my knowledge, there’s never been this sort of problem in Richmond and I’d rank the police here as some of the best around.

    David Simon captures my opinion of the systemic problem pretty well:

    “Bill Moyers: It’s also clear from your work that you think the drug war has destroyed the police.

    David Simon: That’s the saddest thing in a way, again, because the stats mean nothing. Because a drug arrest in Baltimore means nothing. Real police work isn’t being done. In my city, the arrest rates for all major felonies have declined, precipitously, over the last twenty years. From murder to rape to robbery to assault.

    Because to solve those crimes requires retroactive investigation. They have to be able to do a lot of things, in terms of gathering evidence, that are substantive and meaningful police work. All you have to do to make a drug arrest is go in a guy’s pocket. You don’t even need probable cause anymore in Baltimore. The guy who solves a rape or a robbery or a murder, he has one arrest stat. He’s going to court one day. The guy who has forty, fifty, sixty drug arrests, even though they’re meaningless arrests, even though there’s no place to put them in the Maryland prison system, he’s going to go to court forty, fifty, sixty times. Ultimately, when it comes time to promote somebody, they look at the police computer. They’ll look and they’ll say, “This guy made forty arrests last month. You only made one. He’s the sergeant” or “That’s the lieutenant.” The guys who basically play the stat game, they get promoted.”


    • JNC, I think you and I have agreed that the WoD has been detrimental to policing before. I have made this argument elsewhere. It may not explain any individual case of police misconduct but it lays the groundwork for much of it by undermining the core value of actual public safety and by encouraging repeated intrusions that push the envelope of the 4th A.

      I actually think I made this as one of my infrequent comments at PL, to much derision, and cries that I was missing the “racism”. Or perhaps I wrote it at The Fix.


  6. Speaking of David Simon, hadn’t seen this previously:


  7. It was PL. Anything other than citing systemic racism and Republican economic policy/Inequality as the root causes is automatically dismissed.


  8. Long form Krugman piece in the Guardian arguing the Keynesian case again.


  9. Is Teh Krugmsn back to depression talk? I’d his book coming out in audio or something?


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