Morning Report: The Fed awaits 1/25/16

Stocks are lower this morning on lower oil prices and weaker overseas markets. Bonds and MBS are up small.

Not much data this morning, although we do get some important real estate data this week with the FHFA House Price Index and Case-Shiller on Tuesday, new home sales on Wednesday, and pending home sales on Thursday. We will also get the first estimate of fourth quarter GDP on Friday, with the consensus estimate at 0.8%. While this is a dramatic slowdown from the third quarter, a recession in the US is probably not in the cards (Bank of America is handicapping a 20% chance of a recession next year). Remember the old market saw: stocks have predicted 12 of the last 5 recessions..

The main event of this week is the FOMC meeting on Tuesday and Wednesday. The general consensus is that the Fed isn’t going to hike rates at this meeting. Given the turbulence in the markets lately people are beginning to think the March meeting isn’t a definite hike either. Ever since the Fed hiked rates in December, the two year bond yield has dropped by 24 basis point to 0.86%. If you take a look at the chart below, it plots the Fed Funds rate versus mortgage rates. While there is a correlation, over the past 50 years or so, mortgage rates have risen or fallen with Fed Fund, but at a much slower rate. In fact, during the last tightening cycle, mortgage rates barely moved, although there could be some bubble effects happening as well.

Morgan Stanley is bullish on Treasuries, while Goldman is bearish. Goldman is looking for a 2% – 2.3%  range on the 10 year, while Morgan Stanley is thinking 1.55% – 1.75%. The difference of opinion revolves around oil prices and their impact.

42 Responses

  1. Frist! Michigoose must be snowed in.

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    • A Houston grand jury has finally issued criminal charges for trafficking in baby parts related to the infamous Planned Parenthood videos. Amazingly, it has charged not Planned Parenthood, but rather the maker of the video. Yes, a Harris County prosecutor has convinced a grand jury that the guy who put an end to PP’s selling of aborted baby parts by exposing it on video is actually the one guilty of trafficking in baby parts.

      I guess it is true what they say….a prosecutor can get a grand jury to indict a ham sandwich if that is his goal.

      http://thefederalist.com/2016/01/25/houston-grand-indicts-david-daleiden-for-organ-trafficking-issues-no-charges-against-planned-parenthood/#disqus_thread

      More interestingly, he has also been charged with tampering with a governmental record. No idea what that is about.

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      • Guilty of being on the wrong side of history?

        Guilty of attempting to bend the ARC OF JUSTICE the wrong way?

        Guilty of being the “some” in one of Obama’s moronic “Some say we should prosecute masterbaters for wasting their seed while others say we should eat unwanted children” strawman arguments?

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      • the left plays calvinball with the law when it comes to one of their pet causes…

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        • It looks like the law makes it crime not just to effect the purchase/sale of human organs for profit, but also to offer to purchase/sell human organs for profit. And so the movie-maker is being charged with offering to purchase human organs. But, of course, his “offer”, even if he made one, wasn’t a bona fide, legitimate offer. The intent to make an actual purchase never existed.

          I don’t know whether, technically speaking, that matters with regard to the law, but even if it doesn’t then it seems to me that this is exactly why prosecutorial discretion exists. Obviously the purpose of the law is to prevent actual sales of human organs from taking place, not to prevent undercover investigations from exposing such sales.

          It is possible that this prosecution, if it goes forward, will have the effect of ginning up even more outrage against PP and the pro-abortion lobby more generally. We’ll see, I guess.

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      • That would be because they were never “trafficking in aborted baby parts.”

        Your incessant repetition of it isn’t going to make it true.

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        • ‘Goose, I think you are correct that there is no evidence that PP trafficked body parts.

          The disposal of parts for compensation at cost and without profit is not the crime of trafficking, afaik.

          Whether its a moral outrage is in the eye of the beholder. And the tapes certainly reflected a callous lack of sentiment, which is enough to piss off an average audience, never mind an anti-abortion crowd.

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        • On another note, I wish David Petraeus had not screwed up so badly by sharing secret docs with his innamorata. I really have a high regard for him. I am glad there was no felony trial and that he was not hung out to dry in that way. He could have been – that Broadwell broad had stuff on her computer that did not belong there.

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        • Mark:

          The disposal of parts for compensation at cost and without profit is not the crime of trafficking, afaik.

          But how do you know they did not receive more than cost? I agree there is no definitive evidence that they did. But to say there is “no” evidence is a stretch. What we do have is a videotape of PP rep, when asked how much compensation would be required, demurring because of an explicitly stated concern of disadvantaging herself by providing a “lowball” figure in what the PP rep herself characterized as a “negotiation”. If PP was only interested receiving its cost, the highest figure they could propose would be their at-cost figure. So why the concern about it being too low?

          That conversation may not be proof, it may not be enough to convict, but it certainly is enough to raise questions. It is not “no” evidence.

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        • If one is pro-choice (I am) why should they be bothered with selling fetal parts (I’m not)? Especially for a profit? Who doesn’t want to help PP get off the government teat for providing mammogram referrals to low income broads?

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        • McWing:

          I think it depends entirely on what it is that makes you pro-choice. If you deny the humanity and moral status of the unborn entirely, there is nothing about it that should bother you. If however you are pro-choice because you think the benefits of allowing abortion outweighs the evil of killing the unborn, I would imagine that you might be bothered by the prospect of activity that would encourage more rather than fewer chosen abortions. After all, if PP can profit from selling fetal parts, the woman should be able to, too. After all, it’s her body, right?

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        • Well, I am a bit of a sociopath, so, that being said, I’m not convinced that a Right to Life exists in utero. I also think that there are certain actions people commit in which they give up their right to life.

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        • McWing:

          Well, I am a bit of a sociopath, so, that being said, I’m not convinced that a Right to Life exists in utero

          If I remember correctly, you don’t think any rights exist at all, ever. Or, at least not without “enough” agreement from other people.

          (BTW, just to be clear, I was not implying judgment of either of the two pro-choice positions I highlighted. I was just trying to show why being pro-choice does not in itself imply that one either should or should not be bothered by the selling of fetal tissue.)

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        • Fair characterization, rights are meaningless with a mechanism to protect them, along with a general consensus that they should be protected.

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        • McWing:

          Fair characterization, rights are meaningless with(out) a mechanism to protect them, along with a general consensus that they should be protected.

          So does this mean if a general consensus that the unborn had a right to life was formed, and laws were passed to protect that right, that you would automatically change your view and suddenly believe that a right to life in utero does exist?

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        • Prolly not but there would be meaningfulness in that proposed right.

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        • McWing:

          Prolly not…

          OK, so just to make sure I understand, your view of whether or not a right exists is not contingent on the existence of a consensus that it does, is that correct?

          …but there would be meaningfulness in that proposed right.

          I think perhaps I don’t really understand what you mean by “meaningful” or “meaningless” in this context. Let us assume that in the current environment there is no consensus that an unborn baby has a right to life. Still, I think I understand what someone means when they say that such a baby does have a right to life. That is, the claim is perfectly meaningful to me. It also seems to be meaningful to you, because you reject the claim, saying that such a baby does not have a right to life. How could you reject the claim if it had no meaning to you? So I don’t think I get what you mean when you say such a claim is either “meaningless” or “meaningful”.

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        • OK, so just to make sure I understand, your view of whether or not a right exists is not contingent on the existence of a consensus that it does, is that correct?

          I’m not sure rights exist outside of a framework of a common held belief they exist. Meaning, I’m not sure rights are endowed (by whatever mechanism) in humans.

          If people believe that rights exist, then the argument is whether or not This or That is a right, correct?

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        • McWing:

          I’m not sure rights exist outside of a framework of a common held belief they exist.

          And if I understand correctly, you also do not think rights, or at least certain proclaimed rights, exist even inside such a framework. Hence your “Prolly not”. That is what I am trying to clarify. Do you think the widespread existence of a belief in a given right causes the belief to be true (ie makes you believe it), or is the widespread belief irrelevant to whether the belief is true (ie your belief in it)? Given your “Prolly not” I think your argument is the latter, but I am not positive.

          If people believe that rights exist, then the argument is whether or not This or That is a right, correct?

          Yes, arguments about whether This or That is a right are necessarily premised upon a common mutual acceptance that rights actually do exist. That is why it makes no sense to me for you and I to discuss whether unborn babies have rights if, as I think is the case, you reject the idea that rights can even exist in the first place. To me your earlier claim that babies in utero do not have a right to life is not particularly edifying or interesting because it is just the logical consequence of your premise that rights do not exist at all. It becomes interesting to me if your belief about babies in utero is distinguishable from your believe about other human beings ex utero, ie babies in utero do not have rights, but babies ex utero do have rights. That, to me, is an interesting position worth discussing, but it would imply that you do hold the premise that rights can and do exist.

          edit: I changed a word above.

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        • Last paragraph first, I think a fetus has zero rights, an infant some rights and a non-felon, mentally competent adult (18 year old) full rights.

          I’m unsure if rights exist, but if they do that’s how I think it should lay out.

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        • McWing:

          I’m unsure if rights exist…

          Which means that you must therefore be unsure whether a fetus, an infant, or a mentally competent adult has any, no?

          To me, the question of how rights “should” lay out isn’t a very interesting one. Assuming they exist at all, the important question to me is how they do lay out. If we can agree to assume that rights are a real thing, even if just for the sake of argument, what is your theory of rights that leads to the conclusion that they inhere (in at least some measure) in a newborn infant, but not that same infant prior to birth?

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        • In my opinion it’s a logical place to start, given that host (SWIDT) also has rights. If the state is going to protect rights then pre-birth there is a high likelyhood that the state would trample the host’s to protect the fetus. For example, I don’t think the state should be able to regulate the alcohol intake of the host to protect the health of the fetus. Do you get what I’m driving at here? Post birth your dealing with parental rights, pre-birth your dealing with the physical body of the host, I don’t want a state with that kind of power.

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        • McWing:

          Do you get what I’m driving at here?

          Yes, but I think you are driving on a different road now. The question we were talking about was why you conclude that a newborn baby has rights but a unborn baby does not. The question you address above is why you don’t want the state involved in protecting the (presumed-to-exist) rights of an unborn baby.

          I can address your new argument but I suspect we will just end up back at the original one, unless you agree now that the unborn do have rights.

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        • I do not agree that the preborn have rights because the protection of those rights would come at the cost of the host’s rights. That calculus changes after birth where the protection of the rights of the baby do not infringe on the rights of the mother.

          I hope that is clearer.

          As I stated, I’m not sure if rights exist, if they do this would be my preference.

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        • McWing:

          I do not agree that the preborn have rights because the protection of those rights would come at the cost of the host’s rights.

          Correct me if I am wrong, but I think your argument amounts to this:

          Rights cannot conflict. Any rights of an unborn baby must necessarily conflict with the rights of its mother. Therefore if we accept that the mother has rights, we must conclude that that the unborn baby does not.

          I agree with this logic, and I agree with the first premise (rights cannot conflict). But I totally disagree with the second premise. I don’t think the rights of the two necessarily conflict, and I think it would be quite easy for the state to establish laws that protect the rights of the unborn baby without infringing on the rights of the mother.

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        • I don’t think the rights of the two necessarily conflict, and I think it would be quite easy for the state to establish laws that protect the rights of the unborn baby without infringing on the rights of the mother.

          How?

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        • McWing:

          How?

          Allow the mother to remove the unborn baby from her body if she wants, but disallow her from killing it before doing so.

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        • Also, we are doing a for the sake of argument thing here. Ultimately, protecting the rights of a born baby is less infringing on other individuals than protecting the rights of a fetus, that’s the “why” of why I think a born baby has rights the state has an interest/obligation to protect and a fetus doesn’t.

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        • Mark:

          I’m interested in your take on the application of this law in the case of the film makers.

          Clearly the law is intended to discourage people from actually buying and selling human organs. To do that, it makes it illegal not just to effect a transaction, but to “offer” to do so as well. But clearly the film maker’s offer, to whatever extent there was one, was not a bona fide, legitimate offer since the film makers had no intention of going through with a sale. The “offer” was made only to see if PP was a willing seller.

          So my questions: First, as a legal matter does the intent of the offer matter at all? And second, even if it doesn’t matter as a legal matter, is this something that a prosecutor would normally press charges for? For example, if an investigative reporter from CNN posed as an undercover prostitute at the Republican convention to get video recordings of delegates negotiating over the price for sex without ever actually effecting the transaction, and then produced a show on CNN showing the results, would you expect prosecutors to charge the reporter under solicitation laws?

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        • If the facts are as you say, then I think the prosecution will evaporate. But if the prosecutors have some evidence that the filmmakers intended to go through with the purchase, perhaps to display the dismembered fetus to a horrified audience, then Katy bar the door.

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        • Yes Mark, I agree with that.

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        • Mich:

          Your incessant repetition of it isn’t going to make it true.

          What “repetition” are you talking about? The first time I have ever used the word “traffick” on ATiM was yesterday, and it was used in the context of the charges against Dadeilen.

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      • More interestingly, he has also been charged with tampering with a governmental record. No idea what that is about.

        Creating fake California drivers licences that they used to “prove” their identities to Planned Parenthood.

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      • And the tapes certainly reflected a callous lack of sentiment

        What do you want? For people who deal with these tragedies on a regular basis to dissolve into tears every time they try to salvage some little bit of good out of them? If I broke down every time I had to do an autopsy of a child who died from SMA in order to harvest their tissues so that we could do research, that would be a disservice to them and to their parents who gave me permission to do the autopsy.

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        • Of course the med/bio folks would be objective, if not calloused, but ‘Goose, these were not med people, as I understand it.

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        • Mich:

          For people who deal with these tragedies…

          I’m surprised to see you equate as “tragedies” the death of a child due to SMA and an aborted baby.

          (BTW the “lack of sentiment” comment was Mark’s, not mine.)

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      • I was addressing Mark

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      • Of course the med/bio folks would be objective, if not calloused, but ‘Goose, these were not med people, as I understand it.

        Does it matter? Would you have complained about a lack of “sentiment” if the PP representative on the video had been a man? These were medical research professionals discussing a potential perfectly legal tissue transfer with people who had presented themselves as also being medical research professionals.

        And if you think that medical researchers get “calloused” about tissue donations, you should think again.

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  2. Black Lives Matter is a reaction to this, to remind uppity non-white, non-black minorities just what the pecking order is.

    http://www.hollywoodreporter.com/race/gay-latino-oscar-voter-pens-859044

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