Morning Report: Rates back to pre-taper tantrum levels 2/11/16

Global stock markets are down again on no real news. Whatever comfort markets took in Janet Yellen’s remarks yesterday are over. Bonds and MBS are up, with the 10 year bond yield pushing a 1.5% handle.

Speaking of Janet Yellen’s plan to continue to increase the Fed Funds rate, the markets are not buying. The Fed Funds Futures contracts are forecasting no rate hikes until 2018.

Loan officers, you have been given an unexpected gift with the 10 year. Rates are now at the pre “taper tantrum” level when the Fed started bracing the markets for the end of QE. So I guess the Fed didn’t need to purchase $4 trillion worth of assets to get rates down?

Initial Jobless Claims fell to 269k from 285k last week. It bears repeating that these numbers are exceptionally good and are associated with boom times. The tape doesn’t care, but still…

The Bloomberg Consumer Comfort Index rose slightly to 44.5 from 44.2 last week. Lower gasoline prices are helping improve the mood.

Most commodities have been getting crushed lately, however one has been on a tear: Gold. Gold is a strange animal, in that it is one of the few financial assets that isn’t some else’s liability. The price of gold can be considered to be the (inverse) confidence indicator in the world’s central banks. Gold up, confidence down.

Continuing on the central bank thread, one of the bright spots in the US markets has been auto sales. This has been driven by a couple things: The biggest was that people deferred replacing cars until they absolutely had to due to the lousy economy. However another reason is cheap credit, and some hedge funds think they have found the new “big short” in subprime auto. When you can get an 8 year loan for a new car at a rate below the 30 year fixed rate mortgage, something is awry.

So, yet another pillar holding up the economy was based on cheap credit. Janet Yellen must feel like Michael Corleone: “Just when I thought I was out, they pull me back in.”

The House Financial Services Committee is having a hearing today on FHA MIP. Expect Democrats to push for another cut and Republicans to be against it. The Democrats are in a strange position with the base continuing to push for even tougher regulations for the industry and the affordable housing types getting sick and tired of the tight credit that results.

76 Responses

  1. Amusing:

    “Alan Grayson’s Double Life: Congressman and Hedge Fund Manager

    By ERIC LIPTON
    FEB. 11, 2016

    Mr. Grayson says he has done nothing wrong. “Here is something that is not true: that I somehow traded on my membership as a U.S. congressman to get clients for this fund,” Mr. Grayson said in an interview.”

    No, that’s exactly what he did.

    http://www.nytimes.com/2016/02/12/us/politics/alan-graysons-double-life-congressman-and-hedge-fund-manager.html?_r=0

    Liked by 1 person

    • Any retired Congressman who has taken up a job as a consultant, director, etc. (but never a lobbyist) has done exactly that. Not to mention every retired president regarding memoirs. Wonder how many truly talented artists have gnashed their teeth over the attention W’s painting has gotten.

      BB

      Like

      • sure … but not all of make their political careers rallying against the 1%.

        somewhat related — Nice that local reporter Kathleen Matthews has gone full fanatic freak in her campaign for Van Hollen’s seat. i’m sure this didn’t color her reporting in her previous career.

        Like

      • Eh, Dubya’s paintings aren’t that bad:

        http://www.people.com/people/article/0,,20804587,00.html

        But, of course, it’s true that nobody would be paying attention to these if he hadn’t had been president. 😉

        Of course, most artists wouldn’t get much contemporary attention if not for where they live and who they know.

        Like

        • A lot of Dubya’s paintings are from copyrighted photographs which puts them is a gray area from a plagiarism standpoint.

          http://www.dailymail.co.uk/news/article-2600382/George-W-Bush-LIFTED-portraits-world-leaders-Google-image-search-results.html

          Like

        • It’s a gray area (shouldn’t be, in my opinion, especially if the resultant work is abstract, but I doubt he’ll get in trouble):

          Similarly, sourcing a painting or other work of art directly from photographs taken by people other than yourself may or may not violate copyright laws. For example, if you base your painting on generic subject matters, scenes or images that have been taken by numerous photographers over the years, you would probably not be violating copyright laws. But if a particular photographer is known for portraying images in certain unique ways that are readily identifiable with that photographer, and you copy one of their photographic compositions or incorporate it liberally and literally into your art, then you may be liable for copyright infringement. Again, this is assuming that you did not request permission from the photographer in advance to use the imagery in question. Using other people’s compositions or images to make money for yourself without first asking their permission and agreeing in advance about how you intend to use those images puts you significantly at risk for infringement.

          http://www.artbusiness.com/copyprobs.html

          Like

    • Based on his brochure, he lost money in 2012 and was down 14% in 2013 midway through. Given the absolute carnage in emerging markets over the past couple of years, he had to have lost money.

      My guess is he can schmooze with the best of the pinkos but cannot trade his way out of a wet paper bag…

      Like

  2. Keeping my fingers crossed for interest rates to stay low for another year. Not that it would make a huge difference to us, but every little helps.

    BB

    Like

    • I just rolled the dice on a 5/1 15-year ARM. consolidated some debt at 2.85%. they won’t have the stones to raise rates too much. low interest rates are now an entitlement and/or right.

      Like

  3. Spent a little time over at Plumline. It’s interesting how the argument about the virtue each ideology holds sacrosanct (and condemns the other for having) seems in such short supply for the left just as they argue it does for the right. Ergo, the left argues that while holding themselves up as avatars of morality, folks on the right are, in fact, amoral and decidedly un-Christ-like while embracing the trappings of religion, only using their so-called morality to, say, take the right of self-determination away from women.

    However, I notice that the folks who hold themselves up as avatars of intellectualism and incisive and intelligent thought and rationality come off to me, not being in the choir, as not ignorant, but profoundly unthoughtful and non-rational when it comes to discussing any issue that falls within the purview of their dogma and ideological positions. A quick read at the Plumline makes me think these people are about as far from rational as any Sovereign Citizen taking over a bird sanctuary.

    It is interesting how frequently our self-assessments are divorced from reality.

    Like

  4. Glad someone erased that douchebags verbal shits.

    Like

  5. Yeah…it is in spam for anyone who wants to see it. I made some changes to our settings. If it causes anyone trouble when commenting, let me know and I will change it back.

    Like

  6. Anybody here who thinks the government (Federal) needs to do more shoot me a ballpark on UTMB’s ideal size?

    http://reason.com/blog/2016/02/12/the-size-of-government-question

    Like

    • From the Reason link:

      What is the purpose of government? What is it essential nature and character, its mission statement?

      Originally that mission statement was the Constitution of the United States. Unfortunately that mission statement is largely inoperative nowadays.

      Like

  7. Apparently Justice Scalia has died.

    https://www.washingtonpost.com/news/post-politics/wp/2016/02/13/supreme-court-justice-antonin-scalia-dies-san-antonio-express-news-reports/?hpid=hp_no-name_no-name%3Apage%2Fbreaking-news-bar

    I tried to create a new post but didn’t see an option to do so. Has that changed recently?

    Like

  8. “I’ve always said that a good Supreme Court would have one Scalia and one Brennan,” Schumer said,

    http://www.spiegel.de/international/bush-s-new-supreme-court-conservative-us-court-headed-right-with-alito-nomination-a-382678.html

    Will Schumer be the one to put forth a name comparable to Scalia?

    Like

  9. Too bad about Scalia. I will say though that that’s the way I want to go………no long term suffering and it’s over quick.

    It’s going to be interesting watching all the DC shenanigans between now and the election though. And when I say interesting I’m not sure it’s something I want to watch.

    Like

  10. So you (the textual Constitutional-ists) don’t think the president has a responsibility to nominate a SCOTUS justice? And that the Senate doesn’t have the responsibility to give that nominee a fair consideration?

    FWIW, I won’t miss Justice Scalia’s rulings, but I’m not celebrating his death.

    Like

    • Sure, he can nominate whomever he wishes. The Senate isn’t obliged to confirm them, or even have a hearing.

      I suspect that if he really nominated a centrist, that person would get a hearing. But I certainly don’t expect it, especially when he’s still in the midst of playing identity group bingo with the nominations as well.

      Like

  11. Oh, and yes–Cao’s sudden appearance here was the result of a discussion on PL about the (of all things) IL function. He (Cao) got quite frosted about his comments getting removed. 🙂

    Like

    • Mich:

      Cao’s sudden appearance here was the result of a discussion on PL about the (of all things) IL function.

      What is the IL function?

      Like

      • Ignore List. You can block comments from specific posters from being seen. Similar to what Kevin Willis created back in the day with Troll Blocker.

        It’s turned into a holier than thou exercise in self absorption as various posters, cao prominent among them, will clutter up the board with repeated lists of the people they are ignoring.

        What I would love is a reverse ignore list so that people I block can’t read my comments either. It’s particularly annoying when someone will stick themselves in the middle of a thread with the lede “I can’t see the original post that jnc4p or NoVA made because I have them on ignore, but here’s my response to what I think they wrote based on the replies so far. Don’t bother replying because I’ll still have you on ignore.”

        Like

        • “will clutter up the board with repeated lists of the people they are ignoring.”

          As I said when I first wrote Troll Hunter: “I am become death, the destroyer of threads.”

          ““I can’t see the original post that jnc4p or NoVA made because I have them on ignore, but here’s my response to what I think they wrote based on the replies so far. Don’t bother replying because I’ll still have you on ignore.””

          There would be an easy way to address this programatically, and that would be to have a person on your ignore list automatically removed from your ignore list if you commented on replies to one of his/her postings. Which WaPo would never do, but I’d totally do if I was in charge.

          Like

    • I don’t see any reason to give Cao the benefit of the doubt or a second chance based on his record.

      Like

      • This group was originally invited together to exclude the irrational, Chris Fox by name among them. It has been difficult enough to maintain wide ranging discourse here with civility, even with a group committed to ATiM’s rules. But it has generally been possible. Chris Fox will not be permitted here, and I know that Scott, Lulu, Kevin and I will maintain that position.

        Also, see this: http://www.economist.com/blogs/democracyinamerica/2016/02/ninth-republican-debate?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

        Also, a 4-4 split on the Supremes, essentially on a few political issues where Roberts cannot get near 9-0 results, forced by political deadlock, if that results, is not a catastrophe for the nation.

        I am almost ready to say “big deal, so what?”

        If we want to play speculative games, imagine a D Senate in 2017 and a President Clinton. And then BHO is nominated to the Supremes.

        Like

        • Mark:

          If we want to play speculative games, imagine a D Senate in 2017 and a President Clinton. And then BHO is nominated to the Supremes.

          Imagine a new secession movement….

          Like

        • @scottc1: “Imagine a new secession movement….”

          … That would go nowhere. DCs control of the military being only the first reason this would be true. But there would be grousing and likely an electoral backlash.

          Like

        • KW:

          That would go nowhere.

          Some day it will go somewhere. Eventually progressive, anti-constitutional authoritarianism will push enough people over the edge.

          Like

        • I cannot for the life of me fathom why progressives wish to keep the South in the Union. The only theory I have, and it’s week, is to punish the South for thinking incorrectly.

          Like

        • Tax revenues. And some fine bed and breakfasts. Also, imminent domain.

          Like

        • Well, to hear the Progressive tell it, all decent BnB’s are in New England and the California wine country. Also, progressives frequently claim that the south is a net tax revenue receiver.

          Maybe I should rephrase, why don’t progressives wish to expel the South from the Union? What is the benefit of keeping the South within it?

          Like

        • McWing:

          Maybe I should rephrase, why don’t progressives wish to expel the South from the Union? What is the benefit of keeping the South within it?

          HL Mencken’s definition of puritanism is somewhat applicable to progressivism: The haunting fear that someone, somewhere, rejects leftist values. Progressives are, by temperment, authoritarian, not tolerant of individual judgment.

          But they are also authoritarian by necessity. Leftist values require the active participation of precisely those people who are most inclined to want to escape it. Hence the need to make escape as difficult as possible. You can’t take from Peter to give to Paul if Peter isn’t there to take from. This is why the left wants power concentrated at the federal level instead in the states. It is why the left wants federal power concentrated in the federal bureaucracy and the judiciary instead of congress. And it is why the left would never allow, much less promote, the departure of any state or states from its control. It cannot afford to allow people to willingly exit its grasp, for that would merely encourage others to do the same, making their goals less viable.

          Like

        • Eh, some of them do. Every time there’s an election where Republicans do well and a lot of Southern states go red, they post pictures of maps calling it “Jesusland” or worse and suggest the north should secede or saying we should encourage southern secession, so the right can live in some anarchic libertarian/Christo-fascist Somalia and they can finally have their enlightened liberal utopia. How that would work in reality, I dunno.

          Like

        • I say it will go nowhere because I do not believe secession is strategically, tactically, or logistically possible. The era of the Civil War (and, perhaps, the 50 years after it) would have been the last time any kind of secession would be possible at any level. North Carolina is turning blue! There will not be enough unity geographically for it to ever happen, and it will be difficult for rural America of secede. And, to be slightly racist: American conservatives are not moderate Muslims. Even if sympathetic to the emotions that inspire the drive to secession, too many of them will be unwilling to participate on logistical or principled or pedantic grounds (insisting that constitutional processed be pursued, even if doomed to failure).

          But the DC control of the military, plus general military discipline, plus the population of most bureaucracies including the FBI, CIA, NSA, etc . . . secession is logistically doomed to failure in a way that dwarfs the south’s disadvantages in the civil war.

          Also, if Texas tries to secede, is Austin going along with it? I don’t think so! 😉 If Tennessee tried to secede, would Memphis go along? No. Nashville? Doubtful. Knoxville? Doubtful. And that’s a huge chunk of the states real population, not to mention the center of its politics. It’s boiling a frog by slowly warming the water its sitting in. Any revolution is going to happen via disruptions of the Washington power structure and state political structures. IMO.

          Like

        • That would go nowhere. DCs control of the military being only the first reason this would be true.

          I don’t think the military will go along with shooting civilians, especially if the CIC is a leftist like obama..

          Like

        • Brent, it’s a different military now then it was even in 1990.

          I think it would obey orders. Professionalism. And loyalty to the Constitution, which formed the more perfect Union.

          But it is the ugliest of hypotheticals. It would not happen in a vacuum. The world would not sit quietly and watch the armed dissolution of the USA.

          I think that KW had it right: very few states are so lopsided that they could consider a secession without a strong anti-secessionist movement from within.

          This is a strong nation and a free one. Politics here is no more vicious than it is in Italy or France and people don’t split nations over political disagreements nearly as often as they do over ethnic or linguistic or tribal lines. See Catalonia. See Yugoslavia.

          Like

        • It’s going to be interesting when one or more state governments attemp to nullify Federal laws and or mandates.

          Like

        • Mark:

          I think it would obey orders. Professionalism. And loyalty to the Constitution, which formed the more perfect Union.

          If a secessionist movement were ever to gain momentum, I think loyalty to the constitution would be precisely what drives it, not what drives opposition to it.

          There is a fundamental difference between defending the constitution and defending those who hold constitutional power. As office holders of the left becomes more and more brazen in their cynical abuse (and rejection) of the constitution – and frankly, how much more brazen an cynical can they be? – I would hope that a critical mass of people would come to recognize that loyalty to the constitution at some point not only allows but demands a refusal to subjugate oneself to such office holders.

          This is a strong nation and a free one.

          Increasingly less so every year.

          Politics here is no more vicious than it is in Italy or France and people don’t split nations over political disagreements nearly as often as they do over ethnic or linguistic or tribal lines.

          That is because most nations have been formed around ethnic or linguistic or tribal lines. The US was not. It was formed around an idea, something that makes the US rather unique in the world. As a decreasing number of people in the nation value that idea, it is hard for me to see how the nation won’t eventually split over it.

          Like

        • The logistical nightmare of such a split would make it self-defeating, ultimately. How do we protect the borders? Imports and exports? A separate currency? The first part of the process would be taking control of and then using the government bureaucracy, which would quickly be too much for some of the more ardent revolutionaries, and what do we do then?

          All secession would accomplish is a godawful mess after which nobody would come out looking that good. And it would also be economically devastating, which would negatively impact its popularity and the enthusiasm of the hoi poloi for the New American project.

          Might happen, I suppose, but if it does . . . I’d be very surprised. Much more likely is new Tea Party and Occupy Wall Street style movements that work on breaking up the Republican/Democratic establishment hegemony. I can see that happening, and most of the power players in both parties getting effectively evicted.

          Until, of course, they slyly work their way back in. And it all starts over again.

          Like

        • KW:

          The logistical nightmare of such a split would make it self-defeating, ultimately. How do we protect the borders? Imports and exports? A separate currency?

          You act as though these questions have never been faced before, as though all existing nations have always existed and no new nations have ever or will ever come to be.

          I actually think these questions (and others) would be relatively easily dealt with if (and I admit it may be a big if) the original host nation recognized the right of secession and negotiated amicably and in good faith over the many issues that would arise.

          Surely if the US and Canada can agree how to secure the border between them, the US and Texas can come to an agreement. Surely if the US and Mexico can reach a trade agreement on imports and exports, the US and Florida can do so. Surely if Hong Kong is capable of pegging the HK dollar to the US dollar for economic stability, South Carolina is capable of pegging the SC dollar to the US dollar for economic stability.

          The primary obstacle to secession, and what makes it so difficult to contemplate, is not any practical consideration, but rather hostility to the notion that is so strong as to produce a willingness in those opposed to it to take up arms in order to prevent it. It may be true that secession cannot happen without a destructive civil war that would be bad for everyone, but if it is true, it is only because of a host nation unwilling to let a people determine their own destiny.

          Like

        • Well, civilians may be shot if they are involved in an armed revolt. But well before any actual conflict erupts, there is the deterrent. Not to mention an intelligence infrastructure that could be used to disrupt plots, infiltrate state legislatures, yada yada. There may be many memes about it and fantasizing on Facebook, but at the end of the day I’d be very dubious if it happens. There will be states nullifying federal laws, probably the imposition of fines or withholding of federal aid, then something changes and some compromise or surrender happens and the state does something that makes it so they are abiding by the rules, or the rule is changed in some cosmetic way as a face-saving measure . . . I don’t mean to say no states will fight back against Federal encroachment, but I don’t see secession happening, and I see it as doomed to failure if attempted.

          Liked by 1 person

        • Agree with KW completely on secession.

          Like

        • I cannot imagine a Seven Days In May coup working in the United States no matter what the cause. That is what these Oathkeepers and other Patriot militias keep trying to foment to absolutely no avail.

          And secession of either the northern liberal or the southern conservative states will ever happen because no matter how we call them blue or red as a state, they are all really just stripes and speckles of all sorts of colors. We are all Americans.

          Like

        • Indeed. And the states, when looked at, are purple. There is less stratification than you might imagines, and majorities that make up blue states and blue cities tend to be no more than 60% or so. And geography is important when talking about secession.

          Another point is the potential leaders of secessionist movements are a far cry from Washington and Jefferson, and many of them I would not trust to give me directions to the nearest gas station. Once we have men of the stature of Benjamin Franklin and Thomas Jefferson (or a Ronald Reagan or a Winston Churchill) arguing for secession and committing to lead, I might take it more seriously (although it would still fail). But they won’t. Secession is ultimately a tantrum, and fundamentally irrational. If some legal secession could be achieved, the process of implementation would take years with both sides cooperating in the modern era. In battle? And the general population would become hostile to everybody involved, because they don’t give a shit about your principles, but now that Netflix has stopped working and they can’t update Facebook, WTF?

          Also, in regards to secession and the military, I was just thinking about this: they wouldn’t have to shoot any civilians, I expect. The military could easily enough control the waterways, ports, and the roads in and out for the most part. You wouldn’t have to do much to degrade daily life profoundly for the citizens of the seceded state in a few weeks, at which point I expect the sovereign citizens would be a lot less excited about secession. Also, some sort of EMP is probably a possibility.

          Like

        • KW:

          …and I see it as doomed to failure if attempted.

          If a state (not your own) had a referendum and overwhelmingly voted to secede, would you oppose allowing it to do so?

          Like

        • In most cases, yes. I suppose if someone the Neo Nazis had successfully seized power and were rounding up the Jews and homosexuals for the ovens then, yes, I would support secession. In that case, if the state had voted to secede, I’d have to start planning my move, as I wouldn’t take up arms against the foolish choice. Put the political system has too many incentives to keep people right where they are for any state to vote for secession presently, I think. Not saying it can’t happen, just saying it’s hugely unlikely.

          Like

    • Missed that! Too bad. Frankly, I’d love for any of them to participate, but the problem is Cao is simply not going to consider certain things unacceptable or uncivil that pretty much all the rest of us would. Everyone occasionally gets in a mood, but Cao is always “in a mood”. Alas! I’d love to have him here, if he was capable of polite interaction with people he disagreed with. I’ve seen no sign this is the case (and, indeed, most of the participants here are on his ignore list, for the temerity to say things he disagreed with; indeed, he seems to hold civil conservatives who calmly advance their opinions on things or want to discuss controversial topics without condemning the subjects loudly in special contempt). I just don’t think he’d make a good fit.

      Like

      • KW, I thought you were a party to the agreement that no one from PL who was uncivil could be permitted here. I expressly recall corresponding with Lulu and I thought you and Scott about Mr. Fox.

        Remember that aside from his frequent death threats and rages he also bragged about his having brought down blogs. I think this goes back to the time when many of us were on Cillizza’s Fix blog, as well.

        Like

        • I was! Of course, we also had more lefties here at the beginning. I’m just saying in general: I’d like someone here who was as far left as Cao is (like Ale maybe!) who could also be polite. Just checked out Cao’s post, and he has a point but I don’t understand why he’d come here. We’re almost all people he either has on ignore or would if they still posted on PlumLine. Yello and Michigoose being the excepts (I think) but even they would be harassed here for not being adequate hostile to us paleolithic conservatives. Just a statement of general regret of what cannot be. I hate excluding anybody!

          That being said, his post about the “how to post a link” thing probably should be taken down, as I am fairly sure it is no longer relevant. WP should include a link in anything posted in the comments. When you reply, as Scott does, directly in the comments section of the Admin you would still need to include them, but you can just use the “link” button in that case. We might just want to remove that. Does anybody still use that information to post links?

          Like

        • More to the point, I pine for folks who can discuss politics and policy without knee-jerk “you’re the devil” responses. Folks who have ideological points but appreciate the larger context. People who can articulately explain their positions even though the truth of them feels like it should be self-evident to them. I love it when I disagree with Scott (and it’s not just miscommunication on my part, but even that is edifying) because his explanations of his positions are so well thought out and considered.

          As I recall, the last time OkieGirl appeared here, she called Scott (non-ironically) “evil”. This just amazes me, and leads me to suspect it is the fact that his positions are so clearly reasoned and thoughtful. Many people don’t like it when positions they disagree with turn out to spring from thoughtful logical and deep cogitation when they want the answer to be “greedy” and “evil”.

          Like

        • ” I’d love to have him here, if he was capable of polite interaction with people he disagreed with.”

          Then he wouldn’t be Cao.

          He basically hounded John/Banned Again from PL. No reason to cut him any slack.

          Like

        • I guess not. Ah, well.

          Like

        • The reply function is messy. You replied to KW, I assume, but it came to me.

          Like

        • There’s a finite level of nested replies that are allowed.

          Like

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

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: