Morning Report: The home ownership rate falls 4/29/16

Markets are lower after yesterday’s bloodbath. Bonds and MBS are down.

Personal incomes rose 0.4% in March, while spending rose 0.1%. The savings rate rose to 5.4%, this highest since late 2012. The Great American De-Leveraging continues..

The PCE Core Index (which is the inflation measure preferred by the Fed) rose 0.1% in march and is up 1.6% YOY. This is still below the Fed’s 2% target rate. We simply aren’t going to see much in the way of inflation until we see wage growth.

Speaking of wage growth, the employment cost index rose 0.6% in the first quarter as wages and salaries increased by 0.7% and benefits increased by 0.5%. On an unadjusted YOY basis, compensation increased 1.9% as salaries increased 2% and benefits increased 1.7%.

Consumer sentiment fell in April, according to the University of Michigan Consumer Sentiment Survey.

The homeownership rate fell to 63.5% in the first quarter, which is back below the levels of the mid 80s through the mid 90s. The gains in homeownership that started with the Clinton Administration’s social engineering via the housing market in 1995 have been given back.

As the Millennial generation ages, that number should increase, and does represent pent-up demand for housing. Affordability remains a big issue, along with high DTI ratios due to student debt. The homeownership rate for Gen Xers was 59%.

Worried about the increase in the price of oil? Don’t be. It is due to a massive short squeeze. For every barrel of oil being bought by a long speculator, there are 9 shorts exiting their position.

39 Responses

    • Well, it makes some sense, I guess. Since, in the world of the college campus, all men are rapists, why discriminate unfairly against those who got caught? Or something?

      Like

    • jnc:

      Criminal is now a protected class:

      It won’t be long before advocates go from demanding that “This question doesn’t belong on the college-admissions form any more than questions about the weather belong there” to demanding that “diversity” requires the question to be on the form. See: the history of race in the US.

      There is no end to the folly of the progressive left. Affirmative action for criminals!

      Like

  1. The left can’t be parodied:

    “One Radical Change Cisgender Women Can Make Today to Support Trans Bathroom Access
    By Vanessa Vitiello Urquhart

    There is another option, however, a step that ordinary people could take today that would raise the visibility of trans supporters, increase empathy for the experience of trans women, and help create safe spaces for all women to pee in peace: Cisgender women—and others who are currently able to use the ladies’ without causing a fuss, including nonbinary folks and early transition trans men like me—could stop using women’s bathrooms en masse, and make the men’s room a safe unisex bathroom by default.

    Fear of “men” in the women’s room is a powerful thing—powerful enough to inflame passions, enact bigoted laws, and inspire mean-spirited campaign ads. On the other hand, fear of women in the men’s room is all but nonexistent. Cisgender men might feel a little awkward if a woman waltzes by the urinal and into an empty stall, but they are unlikely to feel threatened or endangered by it. Women who do not possess an irrational fear of peeing in the proximity of men are therefore in a unique position to model trans-friendly bathroom behavior and choose to use the men’s public restroom without making anybody feel unsafe and with very little risk of having a frightened restroom user call security or law enforcement to eject them.

    There are a lot more cisgender women in the world than trans ones, which means that if a significant number decided to use men’s bathrooms, it could boost the visibility of support for trans bathroom access significantly.”

    http://www.slate.com/blogs/outward/2016/04/29/a_radical_tactic_to_support_trans_bathroom_access.html

    Like

    • jnc:

      The left can’t be parodied:

      Truly. This whole thing started as an effort to relieve the distress of men who think they are women from having to use the men’s room. So now the solution is to convince actual women that there is nothing to be distressed about in using the men’s room.

      Twilight zone stuff, really.

      Like

      • I’m less concerned about the current kerfuffle than what I see coming: the elimination of urinals, because they are discriminatory against women and the handi-capable who are not able to use them.

        This is all a smoke screen. They are coming after my beloved urinal.

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        • KW:

          This is all a smoke screen. They are coming after my beloved urinal.

          Be careful. A joke to us, a brilliant idea to progressives. You think that it wasn’t jokingly remarked, back in the ’70s and ’80s as the gay rights movement was getting started, “Next thing you know they will want to get married!”? Ha, ha.

          Like

        • I’m actually fairly concerned that it’s not a joke. Given what’s going on now, I can definitely see a campaign to get rid of the female-hostile urinal.

          Like

    • How did allowing drag queens to use the women’s john become a cause celebre of the left?

      Like

      • I have no idea, but I can’t imagine a more non-issue becoming a “cause for our time”. I mean, I could at least wrap my head around gay marriage but I had a hard time seeing where this is going. But it doesn’t feel like it’s to create more unisex bathrooms or discrete stalls . . . it’s just, I guess, some sort of proxy battle about the normalcy of transgender men and women, but when examined on the surface level it seems like so much nonsense. Shit, I don’t care what bathroom they use. Also don’t care what bathroom I use. I normally use the man’s bathroom, but I’ve used family restrooms and unisex single toilet bathrooms and even a woman’s bathroom in a pinch.

        Eh, I’ve always preferred private bathrooms. Maybe that’s the direction we’re ultimately headed. But more of a tempest in a teapot I cannot imagine. We’re moving into a point where a few individuals preferences can be made major civil rights issues, depending on how their whiny grievances are packaged.

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        • KW:

          I mean, I could at least wrap my head around gay marriage but I had a hard time seeing where this is going.

          McWing hit the nail on the head. If the left can impose a bathroom policy on an unsuspecting nation…a bathroom policy, for goodness sake!…what can’t it do?

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        • “McWing hit the nail on the head. If the left can impose a bathroom policy on an unsuspecting nation…a bathroom policy, for goodness sake!…what can’t it do?”

          Cut the DoD budget? Restore unions back to where they were in the 1950s? That seems to be about it.

          I look forward to businesses having to run their choices by the government for paint colors for their walls to make sure they aren’t picking an offensive shade.

          Like

    • Every knee shall bend.

      Like

  2. Trump couldn’t ask for better foils:

    “Activists predict that Trump will continue to evoke angry protests in California, while the presence of the Mexican flag could cause confusion among those observing from afar.

    David B. Villanueva, 23, a member of Chicanos Unidos in Santa Ana — a group that was part of the anti-Trump demonstrations Thursday — said the presence of the Mexican flag at rallies and other gatherings is often misunderstood.

    While many may see it as un-American, the Mexican flag is actually used to express diversity within the United States, especially in California, where many are of Mexican heritage, the activist said.

    “Protesters chose to bring out the Mexican flag to demonstrate their culture and not their nationality,” Villanueva said. “In this election year, I find the fact that people are waving Mexican flags more important than people waving American flags because of the diversity within our own American culture.””

    http://www.latimes.com/local/lanow/la-me-ln-anti-trump-protests-mexican-flag-20160429-story.html

    There’s no confusion. People know exactly what message is being conveyed.

    Like

    • More importantly, how doesn’t this excuse apply to Hastert given that he was involved in wrestling?

      “But, his actions came at a time when U.S. soldiers were being told to ignore rampant sexual abuse of young children by our Afghan allies because “it’s their culture.””

      Like

  3. This article is really fascinating. There is a lot of stuff in here to unpack. Do yourself a favor and read it.

    http://www.theatlantic.com/politics/archive/2016/04/conservatives-discrimination-universities/480372/

    Seriously, just amazing stuff in it.

    Like

    • George, I agree that it is fascinating, but it isn’t really news. You can find moderates and conservatives in the B-school, in STEM, in the law school, and perhaps in economics – my mentor was a student of Milton Friedman. But the social sciences aside from economics are solidly liberal – not even moderates like me would be tolerated. The fine and performing arts are usually just daft, but liberal daft, not conservative daft. As for the humanities, especially Lit, there used to be conservative and moderate scholars, but I don’t know about now.

      Of course, in STEM, there isn’t that much room for politics in the classroom.

      Each law professor is a kingdom unto himself, so while a law faculty may lean left, in a good law school there will be notable and well written conservative profs, as well as law review students. Having to learn to argue any side of a legal issue tends to force a certain moderation based on being able to articulate views you had not previously held yourself.

      Sometimes a particular liberal or conservative idea sweeps the faculty of law schools. An example of that is that in the 60s, I learned anti-trust based on principles that did not actually consider unintended consequences of trust busting. But in the 70s, Bork’s view, also posited by Richard Posner, of anti-trust doing more damage than good [a conservative view] became the mode of teaching anti-trust everywhere. “Economic impact” rather than consumer pricing and market concentration gained ascendancy. This latter more conservative notion I think was fueled by the globalization of production and distribution, as opposed to the North American focus I learned.

      But I digress.

      Liked by 1 person

      • Mark:

        Of course, in STEM, there isn’t that much room for politics in the classroom.

        There is room for politics in every classroom if the prof wants it there. And frankly the more the left attempts to push its policies as a matter of “science” rather than political preference, the more politicized the STEM areas will become.

        Liked by 1 person

      • Mark:

        You may also be interested in this, re law schools:

        http://www.thecollegefix.com/post/24015/

        Legal scholars educating the next generation of attorneys and judges are mostly Democrats, according to a wide swath of research, a troubling trend that some say hinders academic freedom, unduly influences judicial rulings and scholarly work, shortchanges students, and is antithetical to the notion of diversity.

        Republicans – as well as right-leaning women and Christians of both genders – are vastly underrepresented among law school faculties, a trend that spans much of the last two decades, according to a recent study published by a Northwestern University law professor.

        Like

  4. The mere existence of the estate tax is bad enough. This just makes it worse.

    http://www.investmentnews.com/article/20160422/FREE/160429971/princes-death-sets-off-estate-planning-quagmire

    Richard Behrendt, director of estate planning at Annex Wealth Management, calls it a “quirky valuation challenge” that is more art than science. The difficulty comes down to placing a value on intangible assets, such as future royalties the artist may earn from a body of work.

    “You’re trying to look at present value of a future income stream,” said Charlie Douglas, board member of the National Association of Estate Planners and Councils and an Atlanta-based wealth adviser.

    Prince reportedly amassed a fortune worth around $300 million. Yet the divide between how the Internal Revenue Service and the Prince estate view the present value of future royalties could be huge, because with the death of a popular artist comes the likelihood of ballooning popularity and hence a ballooning valuation.

    “For an artist, whether it’s Picasso or Prince, death has an impact on their body of work. It’s undeniable,” said Mr. Behrendt, who worked for 12 years at the IRS as an estate tax attorney. “The IRS will factor that in and say his death will blow the royalties off the charts, but his attorneys will say, ‘You can’t do that.’”

    Like

  5. @ScottC1: ““The IRS will factor that in and say his death will blow the royalties off the charts, but his attorneys will say, ‘You can’t do that.’”

    His attorneys would be correct. Granted, Prince made a terrible mistake not planning out his estate. There are ways to avoid all this, but if the IRS begins to asses estate taxes by potential or imagine future value, the sky is the limit. They’ll start billing the estates for millions they don’t have because one day the things they have might be worth a lot more, because the artists death or because of future potential real estate development or a possible uptick in the market or … That’s frickin’ nuts. Taxing future, post-death income to the estate? It’s a complete contradiction of what an estate tax is and, as far as I know, has always been: a tax based on the value of the estate at the time of death.

    All the same, Prince should have had some advisers whose skill was something beyond that of being a beautiful 20-something woman.

    Like

    • KW:

      It’s a complete contradiction of what an estate tax is and, as far as I know, has always been: a tax based on the value of the estate at the time of death.

      But of course the rights to his songs do have some value, and that value is a function of future expected royalties. So within the logic of the estate tax, it should be taxed.

      The problem isn’t really just this aspect. The problem is that an estate tax is fundamentally unjust in principle.

      Like

  6. Nothing exposes the left’s anti-liberalism as much as Trump does:

    “Teaching Trump

    Teachers shouldn’t tolerate the rhetoric of Donald Trump in their classrooms.
    by Sam Miller

    Marcuse argues that educators have an obligation to be intolerant toward policies, attitudes, and opinions that oppress people, threaten to limit human rights, or promote racism, sexism, and other forms of injustice. For Marcuse, oppressive language is a symptom of capitalism, which relies on inequality of all kinds to survive.

    It persists, says Marcuse, because of the false sense of democracy instilled in people from a young age. This false democracy is founded on a definition of pluralist tolerance that values all opinions equally. Such a definition of democracy and pluralism doesn’t serve the cause of progress and liberation, but sustains capitalism’s repressive status quo.

    Pluralism is supposed to promote fair dialogue in a world with contradictory and incompatible ideologies. But on what basis do pluralists think such “fair and tolerant” discussions take place? We can’t have a truly pluralistic society based on exploitation, in which people are starving and disenfranchised. To think that there are equal sides duking it out ignores the asymmetry of power produced by capitalism.

    Marcuse argues that educators should be intolerant of racism, sexism, homophobia, and other forms of prejudice; to have a liberal discussion, we must be illiberal toward these things. Indeed, there cannot be an open discussion with people who are inciting violence, racism, and sexism.”

    https://www.jacobinmag.com/2016/05/donald-trump-school-teachers-students-children/

    Like

    • jnc (from the article):

      Marcuse argues that educators should be intolerant of racism, sexism, homophobia, and other forms of prejudice

      Other forms of prejudice like, for example, prejudice against capitalism?

      Like

      • No, because those “serve the cause of progress and liberation” and help to defeat “capitalism’s repressive status quo.”

        Jacobin is refreshing in that it doesn’t even pretend to respect free speech.

        Liked by 1 person

  7. The Kafkaesque world that Title IX has wrought.

    https://reason.com/blog/2016/04/19/female-student-said-im-fine-and-i-wasnt

    Colorado State University-Pueblo suspended a male athlete for years after he was found responsible for sexually assaulting a female trainer. But the trainer never accused him of wrongdoing, and said repeatedly that their relationship was consensual. She even stated, unambiguously, “I’m fine and I wasn’t raped.”

    Liked by 1 person

  8. Great quote re: Trump

    “Stop trying to shame the shameless and expose the exhibitionist.”

    http://www.hbo.com/real-time-with-bill-maher/episodes/14/383-episode/article/ep-383-transcript.html

    Like

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