Morning Report: Tough start to 2016 1/4/16

Markets are getting rocked to start the new year, with China limit down overnight and Euro markets down anywhere from 2% to 4%. Bonds and MBS are up.

The ISM Manufacturing Index fell to 48.2 from 48.6 in December, which is the second month of contraction in the manufacturing sector. Blame the dollar. A 48.2 reading in the manufacturing PMI would normally be associated with GDP growth of around 1.6%.

Construction Spending fell 0.4% in November and October’s number was revised downward from 1.0% to 0.3%.

Foreign demand for US real estate will continue to grow in 2016. Foreign purchases of US real estate were $87 billion last year compared to $9 billion in 2009. Berlin, London, New York City, and San Francisco are the markets where global hot money are headed.

Tensions are increasing in the Middle East, with Saudi Arabia cutting diplomatic ties with Iran over the execution of a cleric. Saudi Arabia is struggling since its economy is based on redistributing oil money and there hasn’t been a lot of oil money to redistribute lately. They may have miscalculated on trying to drive out fracking – it can be turned on and off with very little expense and time.

41 Responses

  1. Fristies!


  2. Everyone freaks out over fracking but according to my daughter, it’s not really bad for the water table or anything else really, and we need the oil from it. She’s doing a lot of community outreach in CO re fracking and has done pretty extensive research on it.

    She was actually in charge of her company selling off the drilling rights to a big area she convinced her bosses, and the buying party, has a lot of oil in WY and CO. It’s one of the only real hot drilling areas right now because most of the companies can’t afford to drill until the price per barrel comes back up!

    It’s fun picking her brain on the subject of oil……LOL. Most of her friends she graduated with, who are now in Houston, are in fear of losing or have lost their jobs but her Denver/Houston company is in good shape and she gets to stay in Denver indefinitely.


      • I’m sure she’d get a kick out of that and would probably verify with her fiance (he’s much more diversified) what’s really going on in the world, as she is one of those with a one track mind and interest.

        Right now it’s oil and the science of getting it out of the ground. The rest would be gibberish to her and her first instinct would be not to trust anything she read……….I think!

        But, they’re still democrats, so who knows???

        I’ll send that to her though……..she’ll laugh at least……:)


    • OMG–she’s sold out!



      • LOL, you’re not the first to say that……


      • Things rarely look the same on the inside as they do from the outside. Though one should generally expect video of fracking the feature tap water catching on fire might be more geared to sparking emotional reactions than rational analysis.

        Much as with nuclear power, a lot of the “problems” with things tends to be in the details, not in the existence of a thing itself. I would assume tracking can be done poorly and destructively, or well and effectively. And mistakes can be made in any venture, but certain folks spin those out into errors characterizing an entire category, thus category = bad.


  3. Hat tip Ace:

    In it’s way, reflects my experience as a young left-of-center liberal in art school. Different details but the same: holy-crap-this-isn’t-what-I-thought-it-was moments.

    I started trying to revise feminist arguments with new, accurate sources. I’d correct people on my own side on forums and whatnot. They hated that, and jumped right to calling me a rape apologist and a woman hater. I was blown away, it contradicted my notion that we were the logical side.


      • I imagine no one will believe anything the federal government says about them or about Area 51, but one of the first non-fiction books I ever read was The Flying Saucers are Real, by Donald Keyhoe. See:

        I was 7. Having been fascinated at such an early age, I personally would have welcomed Palin’s suggestion if she had made it and I welcome HRC’s.

        I am not the mainstream media. The MM would have snickered at SP, and may yet do so at HRC, but not as openly nor as immediately.

        You should read the book sometime. It was well documented. I’ll bet Podesta did.


      • She would have been treated differently. Whacky suggestions that are non-partisan are not treated the same with members of your own party as they are with the other party. Thus, if Hillary had said something about being the closest state to Russia, and said something about her having been there, none of the MSM would likely have made a huge deal of it. Basically, anything that Sarah Palin said that did not directly bear on political orientation would be treated differently from Hillary Clinton. Because, you know, it’s sly or clever or interesting when your person says it, and crazy and lunatic and their obsessed when the other person says it. Because, you know. Tribal membership hides a multitude of sins.

        If Hillary came out for a federal open-carry law, the reaction would be negative, though still probably gentler than if Palin did it. I think she’d have to propose a big, no-strings-attached tax cut on the 1% to really have everybody turn on her.


  4. brendan james ‏@deep_beige 24h24 hours ago

    Inside every liberal there’s a trigger happy, law-and-order, armchair executioner waiting to get out


  5. hey, a bunch of weirdos took over an abandoned field station in a middle of a national forest. let’s everyone freak out.

    i imagine this resolves itself with the first good snow.


  6. Uh,oh NoVA: Looks like Vox is on to you:

    “2015 was the year Congress started working again
    Updated by Matthew Yglesias on January 4, 2016, 7:00 a.m. ET

    Hating Congress is an American national pastime, and that’s not likely to change anytime soon. But look back on the just-finished year in legislating, and one thing becomes clear — a lot of legislating happened in 2015. It was a year, in other words, when Congress actually started working again and passing bills. Not just bills to keep the government’s lights on or bills to rename post offices (though we had those, of course) but major substantive bills that addressed big questions of national policy.

    Deals have happened because Republicans and Democrats alike have worked together quietly, while keeping public attention focused on high-profile, deeply polarized disagreements over things like gun regulation and the Environmental Protection Agency.

    By making sure nobody on the outside knows what deals are being discussed, outside groups have less opportunity and incentive to act as spoilers or draw red lines. Even a huge share of the members of Congress who are ultimately asked to vote for the bills are in the dark about the negotiation as it is happening. Not coincidentally, many of the deals are deeply transactional — represented a least common denominator nexus of interest group demands rather than a high-minded, principles-based effort at reform.”


    • So when that bill passes to make it illegal for citizens to know what congress is doing or what laws it has passed, we’ll know how it happened!

      Sunshine Laws? Or is that not a thing any more?


  7. ” Not coincidentally, many of the deals are deeply transactional — represented a least common denominator nexus of interest group demands rather than a high-minded, principles-based effort at reform.”

    BAHHBHAHAA “high-minded, principles-based effort at reform.”

    you wanted compromise right? this is what it looks like.


  8. So, all these progressives who want to bomb the Oregon militia are going to sign up for a career in BLM law enforcement right? i mean ..if i’m required to go enlist to have an opinion on deploying military force overseas. seems fair to me.


  9. NoVA, think Trump is savy enough to run on finally selling off a lot of the federally owned western land?


  10. What’s up with these goobers?

    Ammon Bundy lives in a Phoenix, Arizona, suburb and runs a valet car fleet service, according to public records. Like his dad, he is a registered Republican and has a hunting license. He has also contributed to Infowars web site run by conspiracy theorist Alex Jones.

    In a November 2014 piece for the website, Ammon Bundy described being stopped by a TSA agent at a Phoenix airport and speculated that he was being hassled because Reid branded him “a terrorist against the people of this country, the people I love and would so willingly to give my life for.”

    Ryan Bundy is a former Republican who is currently not affiliated with any political party, according to records. He lives in Cedar City, Utah, and owns a construction company. He has reportedly took part in protests against the BLM’s decision to bar all-terrain vehicles from Utah’s environmentally sensitive Recapture Canyon.


  11. Who do we think is the most polarizing, Donald Trump, Hillary Clinton or Barak Obama?

    I say Obama.


  12. Only because he’s the current incumbent. Each recent president has been more polarizing than the previous one.


  13. What kind of president wouldn’t be polarizing? A lump of clay? A smiley face emoji?


  14. Speaking of polarization, Smith and Wesson just guided up earnings and revenues big time…


  15. They increased their estimate by .7? as in 2.0 to 2.7? Or is their estimate for Q1 GDP 0.7%?


  16. Re: the mental health aspect of the executive action (ie what other branch of government) on guns. they basically want to waive HIPAA privacy requirements. How can they do that? quiet bagger.


    • Thank goodness there hasn’t been some sort of initiative to get physicians to utilize Electronic Medical Records so that the government could search them looking for the “mentally ill” to add to a list of Undesirable Gunowners!”



      • It’s all a strategy to develop End Of Life centers, so the suicidal cannot purchase their own guns to end their life, and have to do it through the government centers. Expect an an additional “Suicide Tax” on the inheritance at this point to pay for these important End of Life centers.

        Yup. They’re playing the long game.


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