Morning Report: Main Street is hiring 10/13/15

Markets are lower this morning after weak economic data out of China. Bonds and MBS are up.

The NFIB Small Business Optimism index rose to 96.1 from 95.9 the prior week. Good news on the labor front – small businesses are hiring or trying to hire despite the volatility in the markets. This actually points to a bit of dichotomy we have seen since the financial crisis – a bifurcation of the “S&P 500 economy” and the “main street economy.” The S&P 500 economy has a lot of international exposure and this acted as a tailwind for the stock markets as the US economy began recovering. Many people were perplexed that the economy could feel so tepid yet the stock market was hitting new highs. Now the phenomenon seems to be reversing. Companies with big international exposure are feeling the effects of the commodity sell-off and emerging markets pain, while the small manufacturer who serves the local area is thinking about expanding and hiring.

Low oil prices are here to stay, at least through 2016, according to the IEA. You have a combination of decreasing demand as China slows combined with an additional million barrels of oil a day coming out of Iran. Rig count has already fallen and is at 5 year lows.

There were 36,000 completed foreclosures in August, according to CoreLogic. This is up 0.8% versus July, but down 20% year-over-year. The foreclosure rate of 1.2% is back to January 2008 levels. The non-judicial states have largely worked through their inventory, however the judicial states (especially in the Northeast) still have some wood to chop.

UBS has a piece out on hybrid funds – funds that hold stocks and high yield debt. If we continue to see a sell-off in junk bonds, these funds will face redemptions, and that meant that the stocks will get sold as well. This is an issue in particular for the energy patch.

26 Responses

  1. no racial element, no opportunity to grandstand on “tolerance”

    obama’s interest in the military centers mainly around social engineering. After that he couldn’t care less and probably views it as something that is crowding out other priorities.

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    • I finally got around to reading the link that Mich posted over the weekend claiming that the real enemy of “archconservatives” is “democracy”. The author, Francis Wilkinson repeatedly makes the accusation that these “ultras” are opposed to democracy, but at no point does he actually provide any evidence for the case. To be sure the author makes assertions that he assumes support his case, but in fact they have little if anything to do with the fundamental charge, and ultimately his article is nothing more than a series of empty assertions that make no real point whatsoever.

      Wilkinson first asserts that, although Obama was elected president, to the “Ultras” (as he refers to the R’s that he really, really doesn’t like, as opposed to those he just plain doesn’t like) Obama is “illegitimate” and “not the duly elected president of the United States.” How Wilkinson has divined this is not made clear, as he provides nothing to suggest it other than his own bald assertion. Perhaps he is a mind reader. Or perhaps he himself can’t quite grasp the difference between someone being a bad president and someone being an illegitimate president, so he assumes anyone who says the former means the latter. But even putting his clairvoyance and/or confusion aside, even if his assertion is correct (and it almost certainly is not), believing that someone is holding an elected position illegitimately in no way at all implies that one is opposed to the democratic process by which the position gets filled. There are all kinds of reasons a person might consider someone “illegitimate” without decrying the democratic process. For instance, one might believe that the person was not legally eligible even run for the office, or one might believe that the election was achieved through illegal or fraudulent means…like say using the IRS to punish political opponents and effect the election.

      For Wilkinson another indication of the “ultras'” opposition to democracy seems to be their “contempt for compromise”. They are “at war with half-a-loafism”. Yet again, there is nothing but bald assertion to this claim, and how exactly the “ultras” differ from Obama or the rest of the hard left on this front is simply left to the imagination. There is no explanation, for example, of just what kind of “compromise” Obama and the rest of the left is willing to make over the funding of Planned Parenthood, to take just one policy currently in the news. But, again, all of that aside, it still is not the case that a refusal to compromise is indicative of an opposition to democracy. Democracy simply defines how people achieve governmental authority, ie via elections. It doesn’t define how they are supposed to go about negotiating over policy once they have that authority. Frankly, it is pretty absurd to think that it does, despite Wilkinson’s saccharine and incoherent prose about “the viscous stuff” of “American pluralism” that makes “one of many”.

      In between all of this, Wilkinson fills in his otherwise thin gruel of a column with other various and sundry outrageous claims and insinuations. He calls the “ultras” “anti-government” and says they are “at war with government itself”. I think maybe some exposure to actual anarchists might provide Wilkinson with some much needed perspective. He talks about a “written Constitution” which is supposed to “guide the balancing of conflicting interests between the president and his party and the Congress and its majorities.” Uh, no, Francis. The Constitution sets out to balance the power of the executive branch with the power of the legislative branch. Under the constitution the balancing of various party interests takes place within the legislature and is achieved through the disbursement of representation across many small electoral constituencies rather than consolidated into a single representative.

      Ultimately the most notable thing about Wilkinson’s column is how empty of any real content it actually is.

      Mich, in posting the link, you said:

      For all you guys who are trying to say that liberals are splitting this country apart.

      I don’t think you really get what we, or at least I, mean when I say such a thing, for the column you refer to is in reality a good example of exactly what I am talking about. I don’t say that progressives are splitting the nation because they aren’t interested in compromise with conservatives over national policy (although it is surely true that they at least as reluctant to compromise as are conservatives.) The problem with progressives, and the way in which they are causing the nation to split, is in their demands for a national policy in the first place.

      Wilkinson is 100% wrong about “compromise” being the stuff of American pluralism. What has, in the past, allowed American pluralism to survive and prosper was the absence of a need to “compromise” on the basic stuff of every day life. The Constitutional notion of federalism, the idea that one size doesn’t fit all, and that the US was not one political constituency, but rather a conglomeration of many different political constituencies, to a very large degree allowed those constituencies to manage their daily business in whatever way they deemed fit. That is to say, the Constitution did not require “compromise” on a lot of political issues because people with different views could find or form their own communities where their values could be lived out, even if they were different from many, or even most, others. California could have its policies and Texas could have totally different ones. And people of both minds could find a place that reflected their values, all under the flag of the US. But progressivism/liberalism is destroying that and has been for many years, by increasingly raising issues to a national level and demanding national, one-size-fits-all policies to be imposed on everyone. It is this nationalization of issues that requires “compromise” where in the past people of differing minds would have no need for it. And as the nationalization of policy increases, so too does the need for “compromise” on core, fundamental values, which most people are not all that inclined to compromise over. Hence, my belief that eventually the nation must split apart. As progressivism increasingly imposes its values on everyone nationally and makes it impossible for people of differing values to live their own lives as they want, hostility towards and opposition to it must also increase. And it will end badly.

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  2. Interesting observation from Charles Pierce:

    “If you want to figure out what the Freedom Caucus is up to in the House, look back to Irish history and what Charles Stewart Parnell was able to do in the British Parliament. You don’t have to have a majority to get what you want. All you need is enough votes to keep everyone else from getting what they want, then they have to bargain with you. Parnell did this so well that he came within an ace of getting Home Rule in Ireland, which would have changed a lot of bloody history.”

    http://www.esquire.com/news-politics/politics/news/a38732/hillary-heart-right-places/

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  3. @scottc1: “Where is Obama’s invitation to the White House for this kid?”

    Well, first, he’s not a Muslim, so it’s not obvious bigotry against Muslim children who bring disassembled clocks in sinister black pencil cases to school—as everyone does—and then refuses to explain or answer questions about it when the alarm goes off in class. This is much worse than something that could reasonably be confused with a bomb or hoax bomb, this is a picture of a weapon on a shirt that honors U.S. soldiers, which presents a clear and present danger to the other children. Because . . . America!

    It doesn’t play into the anti-Muslim/anti-science meme than the Ahmed bomb manipulation of the media by, most likely, both Muslim-activist father and sister, set up for the national media and pundit class, and which it greedily gorged itself on. Seriously, Ahmed-clock-bomb has everything: backwards southern Texans too stupid to recognize the genius it takes to stick a disembowled clock in a small black-briefcase style pencil case who only assume it’s something sinister because THEY HATE MUSLIMS AND BROWN PEOPLE! Anti-science and racism, all in one story? That’s prefect!

    A kid doesn’t want to take off his shirt honoring fallen US soldiers? How does that prove Christians, right-wingers, and southerners are all ignorant, racist, science-hating bigots?

    Bah.

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  4. Racist bagger. How can you support slavery?

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    • Brent:

      How can you support slavery?

      Yeah, you have it about right. Raising the specter of slavery, or at least Jim Crow laws, is indeed the stock response of the left to anyone who objects to the latest round of federalism-destroying policies.

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  5. that’s the playbook…

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  6. What should have been done about the cohort of the electorate that chanted “elected, not elected”?

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  7. or the democrats that fled Wisconsin for Illinois…

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  8. Talk about stepping on my own dick.

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  9. They Democrats did it Texas too over redistricting, although I’m reliably informed that when they do it it’s ok.

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    • McWing:

      Can we at least agree that only a TransPhobe prefers a single gender bathroom?

      It is always difficult to get one’s head around the progressive thought process.

      Why is it acceptable for people who are confused about their sex to object to sharing a locker room with one sex or the other, but it is not acceptable for one sex or the other to object to sharing a locker room with people who are confused about their sex?

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  10. Scptt, tomorrow is the date I suggested we should look to as a deadline to determine if Kerry really missed his leverage on getting back the Americans held in Iran.

    I am readying myself for disappointment.

    The folly of high expectations is once again made evident to me.

    I was also sure OU would beat UT Saturday. That turned out better for me.

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    • Mark:

      Scott, tomorrow is the date I suggested we should look to as a deadline to determine if Kerry really missed his leverage on getting back the Americans held in Iran.

      Yeah, I have a reminder post timed to go up tomorrow.

      The folly of high expectations is once again made evident to me.

      The presumed logic behind not making the hostages a part of the negotiations has always escaped me. And I can’t understand what this administration has done in its nearly 7 years in office that would ever inspire high expectations in its competence.

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  11. “It means to end the West.”

    Well yes, because the West is solely defined by racism. See the evil Columbus.

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  12. @Scottc1: “Why is it acceptable for people who are confused about their sex to object to sharing a locker room with one sex or the other, but it is not acceptable for one sex or the other to object to sharing a locker room with people who are confused about their sex?”

    Whatever challenges stodgy old fuddy-duddies and works to deconstruct traditions such as gender roles and nuclear families is a moral good. Thus, it is perfectly acceptable for progressives to object to conservative boundaries, but immoral for conservatives to object to progressive transgressions of those boundaries.

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  13. @scottc1: “Obama is “illegitimate” and “not the duly elected president of the United States.” How Wilkinson has divined this is not made clear, as he provides nothing to suggest it other than his own bald assertion.”

    There are many people who comment on blogs that make that assertion. Extrapolated, it applies to all very conservative or politically aggressive Republicans/right-wingers. It’s another form of “they all look alike to me”. Such people exist but their degree of commonality with each other on other issues, much less their actual frequency, hasn’t been established.

    Supposedly polls show that 54% of Americans don’t think Obama is a Christian:

    http://littlegreenfootballs.com/article/44368_A_Picture_of_Bad_Craziness-_New_Poll_Shows_54_of_Republicans_Think_Obama_Is_Muslim_Deep_Down

    Supposedly only 29% of Republicans believe Obama was born in the US:

    http://www.birtherreport.com/2015/08/shock-poll-only-29-of-republicans-said.html

    This is the sort of stuff he’s referring to, but I question the legitimacy of such polls, and the pool of people from which they draw. Methodology is not inconsequential.

    even if his assertion is correct (and it almost certainly is not), believing that someone is holding an elected position illegitimately in no way at all implies that one is opposed to the democratic process by which the position gets filled.

    There was more than one article on Alternet post 2004 (And maybe 2010, as well) worrying over how Democracy had failed and maybe something needed to be done to avoid these failures of Democracy (i.e., conservatives winning election). The left see democracy as flawed and a problem when the lose, just the way many on the right can. To the degree the some people are opposed to the democratic process, it is universal: they feel democracy has failed in some way when their side doesn’t win the election or the argument. This is human, not right or left.

    opposition to democracy seems to be their “contempt for compromise”. They are “at war with half-a-loafism”.

    This is the Tea Party and the current GOP in congress (never mind the many exceptions to the lack of compromise). What to two sides do when they don’t see any compromise they can make that would satisfy them? They don’t compromise! Arguably, when both sides (and it is both sides) see any compromise as surrender, what are their options? And, as you point out, that’s not evidence of being anti-Democratic, it’s evidence of being unwilling to compromise on issues where the other side is (it takes two to tango) also unwilling to compromise on those issues. At worst, the Republicans have been more prone to make anti-compromise statements to inflame the base, but I see the average liberal (who complains about this in the GOP) complain that their party compromises too much and too often, and needs to take a hard line and stop capitulating to the GOP. Folks want things both ways.

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    • KW:

      There are many people who comment on blogs that make that assertion.

      Yes, but it has nothing to do with an opposition to democracy. Such people almost always hold a belief (eg, Obama isn’t actually American) that, if true, really would delegitimize Obama as president. For the purposes of the argument made by Wilkinson, it really doesn’t matter whether such people are or are not truly representative of R’s or even a segment of R’s. Even if they are representative, their beliefs are not indicative of an opposition to democracy.

      The left see democracy as flawed and a problem when the lose, just the way many on the right can.

      I actually think this tendency is indeed largely a leftist phenomenon, and I don’t think it is true that many people on the right do this. When people on the right lose elections, they tend to despair about the state of the culture, not the state of democracy.

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  14. I was trying to think of a compromise in today’s government. It is damn near impossible…

    A highway bill in exchange for defunding Planned Parenthood
    A repeal of the estate tax in exchange for a repeal of the Cadillac Tax
    Eliminating carried interest in exchange for lowering tax rates across the board
    Assault weapon ban in exchange for universal open carry

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  15. Heh.

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  16. @brentnyitray: “A highway bill in exchange for defunding Planned Parenthood
    A repeal of the estate tax in exchange for a repeal of the Cadillac Tax
    Eliminating carried interest in exchange for lowering tax rates across the board
    Assault weapon ban in exchange for universal open carry”

    Democrats are never going to compromise on PP (it’s not compromise if it’s capitulation! I mean, if it’s Democrats capitulating!) … on the others, who wants to take those compromises? The Dems won’t lower taxes across the board, the Republicans aren’t likely to agree to an assault weapon band and the Dems aren’t likely to agree to universal open carry, so, clearly, the problem is Republicans refusing to compromise!

    A good question for those who are worried about how the Republicans won’t compromise . . . what kind of compromises are they suggesting? What do they suggest as a compromise and why should it appeal to Republicans?

    Like

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