Morning Report: Economy added 200k jobs in September according to ADP 9/30/15

Stocks are up this morning on no real news. Feels like end of month / quarter window dressing. Bonds and MBS are down small

The economy added 200,000 jobs in September, according to ADP. This is bang in line with the Street estimate for payrolls on Friday. Note that the initial reports of late summer payrolls seem to consistently miss on the downside and are usually revised upward in subsequent months.

Mortgage Applications fell 6.7% last week as purchases fell 5.6% and refis fell 7.5%.

The ISM Milwaukee index fell to 39.44 from 47.7 last month. The Chicago Purchasing Manager Index fell to 48.7 from 54.4. The strong dollar is taking its toll on manufacturers.

All cash sales dropped to 31% in June, according to Corelogic. The historical, pre-bubble average is close to 25%. This speaks to the lack of first time homebuyers. It also speaks to an increase in gettable loans as that number reverts to the mean, even if home sales remain flat.

One of the big questions facing the Fed concerns falling unemployment and a falling labor force participation rate. Intuitively, you would think that as unemployment falls, people who are not currently in the labor force but want to be would find jobs, which would push up the participation rate. If the labor force participation rate remains low, that means the potential growth of the economy remains low, which means a slow, plodding recovery that won’t feel like any sort of economic boom. It also means inflation should, at least in theory, come back as companies bid up the wages of the fewer workers that are left. So far we aren’t seeing that. Millennials should be picking up the slack of retiring boomers but so far it hasn’t happened. And if Millennials don’t do it, then you need to pick up immigration.

Elizabeth Warren is mad that the government is selling distressed mortgages to hedge funds and private equity firms and wants them sold to non-profit firms. She is of the opinion that hedge funds and private equity firms pursue foreclosure too quickly and said “The heart of it is these loan sales need to come with strings attached with basic outcomes for homeowners.” She is either posing for the cameras or completely uninformed: They do come with strings attached. You usually cannot foreclose for at least a year and must hold the loans for a period of several years.

15 Responses

  1. Heh.

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  2. The counter to the demographics as destiny argument in politics:

    “What if All Politics Is National?

    SEPT. 29, 2015
    Thomas B. Edsall

    Democrats are counting on demographic change to help them win future presidential elections, including next year’s.

    But three developments are pushing the country to the right, counteracting the idea that demography is political destiny. First, the rise of negative partisanship – that is, the intense hostility members of one party feel toward members of the other. Next, the nationalization of elections – the increasing tendency of voters to opt for straight ticket voting at all levels of government. Finally, there is growing income inequality within legislative districts, and this has partisan repercussions that are not necessarily what you would expect. All three trends are interacting with each other to the advantage of Republican candidates in contests for the House of Representatives and for state legislatures.”

    http://www.nytimes.com/2015/09/30/opinion/what-if-all-politics-is-national.html?ref=opinion

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  3. This should prove amusing:

    “Everyone you know will be able to rate you on the terrifying ‘Yelp for people’ — whether you want them to or not

    By Caitlin Dewey September 30 at 12:19 PM”

    https://www.washingtonpost.com/news/the-intersect/wp/2015/09/30/everyone-you-know-will-be-able-to-rate-you-on-the-terrifying-yelp-for-people-whether-you-want-them-to-or-not/?tid=trending_strip_2

    Reminds me of an old skit from Amazon Women on the Moon where women wanted the ability to get the equivalent of a CarFax report on potential dates.

    https://en.wikipedia.org/wiki/Amazon_Women_on_the_Moon

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  4. When Saul Alinsky runs the Secret Service, we have a problem…

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  5. I think we should continue to arm our supposed allies in Syria but generally stay out of Russia’s way. The Russians will kill so many non-combatant Sunnis in Syria that they will earn the enmity of the Arab world’s majority and of their own Muslims in Russia in a much bigger way than we did in Iraq, because we did not join in indiscriminate slaughter of civilians.

    I also continue to think Syria does not affect our national security interests. Let Putin get mired in the sand.

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  6. Dennis Miller ‏@DennisDMZ 23 Oct 2012

    I always wish that Obama would be as nasty and arrogant with our enemies as he is with fellow citizens who simply disagree with him.

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  7. But of course it’s just paranoia to suspect that the IRS may have done the same thing.

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    • The only places left where communism is still in vogue: Cuba, North Korea, and the New York City Council.

      http://nypost.com/2015/09/29/city-council-honors-woman-executed-for-treason-in-1953/

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      • One of their sons, “Bobbie”, was sent to live with relatives in central Jersey while the Rosenbergs were in prison, either awaiting trial or later, I don’t recall. I met him at some mutual family acquaintance kid’s birthday party.

        My dad, an avowed anti-communist [I’ve told the story of our Columbia U. visit when I was 9 or so and how he told the “Abraham Lincoln Brigade” students that they would not want his signature on their unilateral disarmament petition because he was a “known fascist warmonger”], quizzed me afterward about “Bobbie”. All I could remember was that he was a Dodger fan. I was a Yankee fan and thus had no further conversation with him.

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  8. In that vein, why shouldn’t John Wilkes Booth receive a Lifetime Achievent Tony Award?

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  9. @mcwing: “The Bureacracy cannot be reformed.”

    Bah! Humanity is perfectable. It only needs guidance from wise, Harvard-educated elites.

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    • Many bureaucracies have been successfully reformed, but I don’t think any were as big as, say, Homeland, or Defense, or HHS.

      I would consider it possible, but very unlikely.

      See what an optimist I am?

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