Morning Report: Housing starts still in a range 5/18/16

Was at the MBA conference Monday and Tuesday, so no report the last two days. People are still buffaloed by regulation. They staged a debate between David Axelrod and Laura Ingraham. She got in some digs on Hillary, but there was no discussion of regulation in the financial sector, which was a shame. Met someone from Fannie Mae who is trying to get lenders to make sub 600 FICO loans and is struggling to get lenders to go there. The government simply has no clue how lenders think…

 

The other sad thing was the MBA leader Dave Stevens who consistently cautioned the industry to not push back against the government regarding regulation. We have to advocate for ourselves “behind the scenes.” Or else the consumer advocates will eat us up. What is the industry asking for? What special favor are we requesting? Clarity on the regulations and not regulation by enforcement action. I guess that constitutes rent seeking in this day and age..

Stocks are lower this morning on Fed worries and emerging market woes. Bonds and MBS are flat

We will get the minutes from the April FOMC meeting today at 2:00 pm EST. The markets have been focusing like a laser on any sort of Fed-speak, so this could present the possibility of some volatility in the bond markets. Just be aware.

Yesterday, Atlanta Fed President Dennis Lockhart and San Francisco Fed member John Williams said that two hikes this year may be the proper course.

Mortgage Applications fell 1.6% last week as purchases fell 5.8% and refis rose 1.4%.

We had some housing data earlier this week. First, the NAHB Housing Market Index was steady at 58. This is the homebuilder sentiment index. After peaking in late 2015, it has fallen slightly. Builders are certainly happy with mid single-digit increases in average selling prices, but they aren’t pumping out more units yet.

The drop in sentiment is evident in housing starts, which continue to be mired in the 1.1 million to 1.2 million unit range. In April, starts rose to 1.17 million from an upward-revised 1.1 million. Building permits rose to 1.1 million. It is amazing that we have such low inventory of homes and yet starts are around 25% less than historical, pre-bubble numbers. That is even more dramatic when you factor in population. We have only approached the lows from the 81-82 recession, which was a bad one.

25 Responses

  1. How to make the US economy less efficient and productive:

    “The Department of Labor estimates that the new rule will cost employers $1.5 billion a year: $1.2 billion in new OT pay and $300 million in administrative expenses to implement the change.”

    https://www.washingtonpost.com/posteverything/wp/2016/05/18/the-new-overtime-rule-is-one-of-obamas-most-progressive-actions/

    Like

    • and the left continues to scratch their collectivist heads wondering why there is no wage inflation…

      Like

    • “One final point. The reason this is happening is that it’s an executive rule change, not legislation. This Congress would never have taken a step like this to help middle-class, working families. But if the next president is hostile to the new rule, it can be reversed (it takes some time to do so, but it can be done). That means the fate of the new overtime rule is tied to the outcome of the election.”

      I speculate that it is much more likely to be left in place, even by a Republican president, than it is to be removed. I don’t think scuttling it would be the first act of a Trump administration. I also thing the negatives of getting rid of it, from a PR standpoint, will be a lot worse than the positives. This rule is unquestionably more populist than many progressive initiatives, and attempts to walk-it-back will be seen as taking away from average citizens rather than repealing a over-reaching executive order.

      Like

      • KW:

        “The reason this is happening is that it’s an executive rule change, not legislation. This Congress would never have taken a step like this to help middle-class, working families. But if the next president is hostile to the new rule, it can be reversed (it takes some time to do so, but it can be done). That means the fate of the new overtime rule is tied to the outcome of the election.”

        It is telling that people don’t even try to hide the fact that we are no longer governed in a constitutional manner. They just announce it casually, as if the president making up the law all by himself was an expected, ordinary, every day occurrence. Which, unfortunately, it is. So very depressing, what a completely lawless government we have come to have.

        Like

  2. Here’s Scott Adams’ latest Trump warning sign prediction:

    “I predict Trump’s favorability with women will start a slow climb from now through November. This will be an inflection point. People need a “story” to use as an excuse to change their minds. In persuasion terms, the Kelly interview provides what I call the “fake because” to do so. It won’t be enough on its own, but if Trump continues to make his case, it will be seen as a turning point.”

    http://blog.dilbert.com/post/144554862006/excuse-me

    It will be interesting to see if it’s borne out.

    Like

    • A Trump victory would be fun just to watch the Progressive Left have a conniption…

      Like

      • Johnson isn’t winning. I know that. next best option? schadenfreude.

        Like

        • Johnson supposedly polling at 11%, needs 15% for the debates.

          Somebody call me and poll me!

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      • They’d have a conniption if Kasich, Jeb! or any Republican won. It’s what they do. 😉

        I’m mainly interested in schadenfreude to see if they shoot themselves in the foot with the constant “he’s a Nazi” rhetoric. I have a sense that if Trump wins, it will be the folks who most don’t want him to win that help him to victory.

        Like

  3. Gen X nostalgia:

    “The inside story of when Run‑D.M.C. met Aerosmith and changed music forever”

    https://www.washingtonpost.com/graphics/lifestyle/walk-this-way/

    Liked by 1 person

  4. Target down 8% on crap earnings… Not the smartest time to pick a fight with social conservatives over transgender bathroom policies…

    Liked by 1 person

    • Seriously. It seems like the best position to take is: hell, youI. I’m going into the bathroom I think I should use. If I run Target and want to make some special accommodation, I will. Or not. What the rest of you do is your business.

      Target will rebound, I’m sure. I’m not going to boycott Target (I don’t boycott anybody, unless I just don’t want their stuff because their stuff isn’t what I want). But there’s just no reason—none at all—for Target to insert themselves in this kerfuffle. There is no upside, and it’s not like they are fighting for medical care for kids with cancer . . . it’s a big fat nothingburger.

      The point of bathrooms is having a place to go pee or poop. I feel they are mostly separate because of gender cliches having to do with the relative neatness of women vs. men that are not always accurate. They are not a place to explore our sexuality or confirm our internal mental gender identity. There are other places for that. I don’t stand up and start peeing in the middle of your Transgender Cisgender Alliance Meetings, don’t start making my easy access to a urinal a political crusade.

      Eh. Target will bounce back. It’s my favorite retail department store. And, frankly, I don’t care whose in the bathroom with me, as long as they do a courtesy flush if they stink the place up.

      Like

    • Brent:

      Trump’s Supreme Court nominee pool. Anyone know these guys?

      Think Progress hates at least 2 of them.

      http://thinkprogress.org/justice/2016/02/19/3750758/what-if-donald-trump-wins-inside-his-plans-for-the-supreme-court/

      Like

      • So those are probably the two best candidates.

        Recently saw a Facebook post on what a monster Clarence Thomas was, having the temerity to suggest that the constitution does not forbid individual state from establishing a state religion.

        Yet, as far as I can tell, the constitution does not forbid individual states from establishing a state religion. And I assume the Federal Government is perfectly capable of denying highway funds, etc., to any state that establishes a state religion. But I fail to see how Clarence Thomas is a monster by elucidating what is arguably just a plain fact.

        Like

        • KW:

          Yet, as far as I can tell, the constitution does not forbid individual states from establishing a state religion.

          Most lawyers would probably say that the 14th amendment, via the doctrine of incorporation, prohibits it. But since incorporation itself is a judicial invention, I’d tend to agree with you.

          Like

  5. Unintended consequences ensue from progressive policy – Progressives are shocked:

    “Women are now getting harassed in bathrooms because of anti-transgender hysteria
    German Lopez May 18, 2016, 2:20 p.m. ET

    This is not what was supposed to happen.”

    http://www.vox.com/2016/5/18/11690234/women-bathrooms-harassment

    Maybe you shouldn’t have brought up the issue to begin with.

    Like

    • “Maybe you shouldn’t have brought up the issue to begin with”

      Ding! Give that man a prize.

      “Hey, let’s draw attention to this, attract perverts and trolls, it will be great! Social justice will naturally ensue.”

      Like

  6. I hope these colluders go bankrupt and then to jail.

    http://www.cnbc.com/2016/05/18/health-insurer-highmark-sues-us-over-obamacare-payments.html

    FUCK THEM.

    Every investor in this company deserves to lose every penny.

    Like

    • McWing:

      I hope these colluders go bankrupt and then to jail.

      Who has more to answer for…the insurance companies or the people who voted Obama into power in the first place?

      Like

  7. This has been a real winner for Austin taxpayers.

    The debate was prompted by a resolution proposed by Mayor Pro Tem Kathie Tovo that directs city staff to explore a number of means of helping other ride-hailing companies and taxi services in the city prosper, including city loans or technical assistance.

    Venezuelan’s could provide advice for this,

    As he has in the past, Adler emphasized patience as alternatives to Uber and Lyft enter the market. There was no way, he said, that the newcomers would be able to fill the void immediately.

    http://www.austinmonitor.com/stories/2016/05/council-scrambling-find-replacements-uber-lyft/

    Like

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