Morning Report: Bill Gross says hike now 9/23/15

Markets are flattish this morning on no real news. Bonds and MBS are down small.

Mortgage Applications rose 13.9% last week, with purchases rising 9.1% and refis rising 17.7%. Refis increased to 58.4% of all loans. This was the first full week after the Labor Day holiday, so don’t break out the champagne quite yet – the increase was due to a holiday-shortened week before.

Mario Draghi (European Central Bank President) said more time is needed to assess whether more stimulus is needed.

Bill Gross wrote about financial repression (essentially having rates pegged at the zero bound) and the risks it poses to the financial system. He makes the point that pension funds are getting hammered because they cannot generate the required return on assets with safe assets so they are taking more and more risk, citing municipalities like Chicago, Detroit, etc. He argues that we should be willing to take some short-term financial pain for longer term financial stability. Of course Dr. Cowbell has a different take, which is that bankers want higher rates because they hate poor people and want them to suffer. Or something.

Now that Scott Walker has exited the race, it looks like his money and staffers are going to Marco Rubio.

Has ATR and HMDA restricted mortgage credit? Not according to the Fed. Probably because credit has been highly restrictive since 2008. It couldn’t have gotten any tighter to begin with. Note that QM was intended to make lender more likely to lend. Given what we have seen with the big banks exiting FHA (Wells and Chase), the CFPB’s new rules aren’t having the desired effect.

24 Responses

  1. While I would bet the field against any single R candidate, I think the smart money will go to Rubio and I think Rubio-Kasich [FL+OH] is the ticket that can do best in the GE.



    • And second?

      In a GE, pretty is a plus, and when you add in that Rubio has learned to speak confidently in public with or without his water glass, he just is the right one. His other running mate choice that might make sense is Fiorina, if having a fast mouth VP is still treasured strategy.


  2. I don’t know that Kasich wants to play second fiddle to Rubio, but that ticket would work for me.


  3. The reverse, Kasich for President and Rubio for Vice President would work better.


  4. Kasich and Christie expanded Medicaid, how are they still even in elected office?


  5. If Gov Kaisich is on the ticket the Republicans are going to be fighting abortion, Planned Parenthood defunding, and every other women’s isssue you can think of all the way through the general.


  6. Kasich lays on the religion way too thick for me, but otherwise, he is a RINO, which is preferable to a D.


  7. He’s a douche in all ways, it’s unarguable.


  8. I am an Ohioan, so maybe I am giving him the hometown nod. I thought he was great in 94, after Republicans took Congress. He was one of the leaders..

    It was nice to hear politicians talk about free markets, freedom, etc..


  9. “women’s isssue”


    Sigh away.


  10. Kasich lays on the religion way too thick for me

    Exactly. It’s not going to play in a general, probably not even in the Midwest.


  11. I’m pro choice, I’m even pro forced abortion in certain circumstances, but for the life of me I can’t fathom why any rational person supports government funding of Planned Parenthood.


  12. Especially those fucking papists.

    Six of which sit on the Supreme Court.


  13. Wait… There aren’t any joooooooooos on the court are there?

    Can’t wait to hear Schumer say that there should be at least on Scalia on the court when LaLo kicks off.


  14. LaLo? You need a glossary for your nicknames.


  15. You’re right yello, it’s Nino, which I think means Wop or Guinea.

    Or Makerel Snapper.

    Or Bead Juggler.


    • In the name of historical context, George Will plays a game where he tries to use as many ethnic slurs as possible in his Yogi Berra memorium. In addition to about a dozen for Italian Americans, he slips in this catalog:

      In 1923, the Sporting News, which for many decades was described as “the Bible of baseball” (except by baseball fans, who described the Bible as “the Sporting News of religion”), called the national pastime the essence of the nation: “In a democratic, catholic, real American game like baseball, there has been no distinction raised except tacit understanding that a player of Ethiopian descent is ineligible. . . . The Mick, the Sheeny, the Wop, the Dutch and the Chink, the Cuban, the Indian, the Jap or the so-called Anglo-Saxon — his ‘nationality’ is never a matter of moment if he can pitch, hit or field.”

      Yesterday, I had to explain to a Millennial why “Charlie” was an ironic name for a Vietnamese-American. So soon they forget. Or never learn.


  16. “I’m pro choice, I’m even pro forced abortion in certain circumstances, but for the life of me I can’t fathom why any rational person supports government funding of Planned Parenthood.”

    It’s a symbol of legal, safe abortion, and the right of women to have them. Give ’em an inch and they’ll take a mile, the thinking goes.


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