Morning Report: Big Week Ahead 2/1/16

Stocks are being weighed down by commodity weakness. Bonds and MBS are down small.

We have a big week of economic data, with the ISM numbers, construction spending, and the jobs report on Friday. Friday’s jobs report will be the highlight of the week.

Personal Income rose 0.3% in December, which was a little better than expected, although that money wasn’t spent. Personal Spending was flat in December, which means the Great American Deleveraging continues to take place.

Inflation remains nowhere to be found, with the PCE Deflator negative in December on a month-over-month basis and up 0.6% YOY. The core PCE was flat in December and up 1.4% YOY.

The ISM Manufacturing Index fell to 52.4 from 52.7 last month, while the ISM Manufacturing Index rose slightly to 48.2 from 48.

Construction Spending rose 0.1% in December after falling 0.6% in November.

Here are’s list of the 20 hottest real estate markets right now. Very California-centric, however some surprises in Stockton, Detroit MI, and Fort Wayne, IN.

24 Responses

  1. Fun fact: You are not allowed to institute a policy prohibiting employees from trashing their employer on social media, according to obama’s NLRB… Free speech…



  2. If you get an e-mail from my @yahoo address with “How’s this” in the subject line DELETE IT. I got phished.


  3. I knew I recognized the email address, but couldn’t place who it was…


  4. Like

  5. Clinton should have crushed Sanders. But she’s just not very good at this.


    • nova:

      Clinton should have crushed Sanders. But she’s just not very good at this.

      Agreed. Forget about her politics, or even whether she could be a capable executive. She is genuinely a horrible, horrible candidate. If she hadn’t been married to Bill Clinton, she could never have gotten anywhere in politics.


    • Concur. And, if you’re a lefty, how exciting is Clinton vs. Sanders? There’s no contest. Sanders is ready to rechristen America as “New Big Norway”. Hillary Clinton is very much out of the Bob Dole school of: “Vote for me because it’s my turn, dammit.”


  6. Compare and contrast.


  7. Recall a few years ago the discussions we had here at ATiM about how radical the Republican party had become, and how far to the right it had moved as the result of the Tea Party movement. At the time I was very dismissive of the idea, saying that it was in fact the exact opposite of reality. I thought that if anything, from a proper historical perspective, the R’s had actually tended to move to the left, only not nearly so far as the D’s had moved to the left, and so while relative to the D’s it may appear that the R’s had moved further right, it was actually the radicalism of the D’s that made it appear so. The Tea Party movement, about which everyone on the left was so fussed, was more about arresting this slide towards the left rather than making a radical move to the right.

    Consider this in light of what is going on now. Despite all of the focus on Trump, the single most radical candidate in the nation right now is far and away Bernie Sanders, a Democrat and self-declared socialist. And in the first caucus/primary, he just got 50% of the Democratic votes. This is a man whose rhetoric and policies would not even remotely be within the “mainstream”, respectable politics of the Democratic party even 15 years ago. Has there ever been a Democratic candidate that has run on a platform as radical as Sanders’? Not even FDR, the patron saint of Democratic progressivism, ran openly as a socialist.

    Can anyone seriously dispute now that it is the Democratic party and not the Republican party that has been radicalized and moved significantly from its historic norms?


    • McGovern was pretty obviously socialist, even if he did not self-apply the term.


      • KW:

        McGovern was pretty obviously socialist, even if he did not self-apply the term.

        I’m not so sure about that. For the day he may have been pretty far left, but nowadays he would be a standard issue D, perhaps even a conservative D. (Which, again, just illustrates my point.) Check out his campaign material.

        Contrast that with Sanders…

        … who wants to:

        – target certain professions (“specualtors”) with special taxation
        – double the national minimum wage
        – eliminate free trade agreements with other nations
        – mandate “free” college tuition
        – transform SS into a full on welfare program
        – have government provide a single payer health system (“medicare for all”)
        – enact government provided “universal” child care
        – “break up” banks (not clear exactly what this means)
        – bring “climate deniers” to “justice” (not clear what this means either)


        • McGovern advocated for a national Minimum Income, though toned it down to a tax break for his campaign, but would have involved paying folks who did not earn in any money $1000 a year in some capacity (compared to his original $6500 a year minimum income bill he sponsored before). I have difficulty finding out what his Health Security plan entailed, but I presume some form of socialized medicine. Also, I thought free college tuition was part of McGovern’s platform but apparently he started advocating that well after his presidential run (as far as I can tell). McGovern wanted to slash military spending. I expect in the context of the times, he came off as very socialist for Americans. I doubt bank size would have been as much an issue back then, and the nothing analogous to climate deniers (there wasn’t even an EPA yet). No intention to touch SS at the time, but given McGovern’s later conversion to free college tuition among other things, I think they are comparable in many ways (obviously, the context has changed, so Bernie can advocate for things now that McGovern could not have in 1972).

          If elected president, Bernie clearly wants to make the obstruction Obama faced look like nothing by comparison. He’ll get almost none of that through both the congress and the senate.


    • I think the Tea Party right-wing radicalism (previously discussed) is all about branding (both self-branding, and the narrative framing set by the left). I don’t think there’s a lot of evidence that the governance of the GOP has been in any serious way far-right conservative. Indeed, I think their signature moves since 2010 have been strictly political efforts at gridlock, and occasional capitulation (again, usually for political rather than ideological reasons).

      I think the issue was the Tea Party was all flag-waving and “rah rah America” and “cut taxes” and a little bit “end welfare” and there were a lot of southern accents and gun-loving: ergo, a way to shape a narrative of the right having gone far-right-radical.

      But how any of the trappings of good-old-boy, ‘Merica-loving right-wing radicalism showed up in governance at the national level . . . I really haven’t seen it. Some of it has shown up at the local level (states jailing pregnant women for doing drugs is kind of a “far right, big government” position), and you’ll see legislation at far end of the American right at the state and local level, sometimes, but even that’s generally more social right-windedness than fiscal right-windedness.


Be kind, show respect, and all will be right with the world.

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