Morning Report: Construction spending falls 10/3/16

Vital Statistics:

Last Change
S&P Futures 2155.5 -5.0
Eurostoxx Index 343.2 0.2
Oil (WTI) 48.6 0.4
US dollar index 86.6 0.4
10 Year Govt Bond Yield 1.60%
Current Coupon Fannie Mae TBA 103.3
Current Coupon Ginnie Mae TBA 104.2
30 Year Fixed Rate Mortgage 3.46


Markets are down this morning on no real news. Bonds and MBS are down as well.
The big event this week will be the jobs report on Friday. We will also have a lot of Fed-speak as well.
The PMI Manufacturing Index slipped in September, while the ISM manufacturing index rose.
Construction spending fell 0.7% in August.  It is also down 0.3% on a year-over-year basis. Residential construction spending fell 0.2% and is up 1.3% for the year. Public construction was down 2.2% and is down 8.8% on a year-over-year basis. Note both Hillary Clinton and Donald Trump support a big infrastructure spending program.
Delinquencies are down in August according to the Black Knight Mortgage Monitor. The pre-sale foreclosure inventory is now down around 1%, although the inventory is still concentrated in the Northeast, Florida, and Chicago areas. Cash-out refinances increased to 42% of all refis.

After Friday’s weak consumer spending data, the Atlanta Fed took down their estimate of Q3 GDP to 2.4% from 2.8%.
Portfolio Managers are forecasting the bond bull market will continue into the 4th quarter as global growth is simply too weak to push up inflation. Of course they are talking their books, but they are probably correct. Separately, Henderson of the UK bought Janus Capital this morning.
Over the weekend, the New York Times got ahold of Donald Trump’s taxes from 1995, where he showed a $916 million loss, which he has used to write off taxes owed going forward. Of course, using business losses to offset business income is as legal as eating a hot dog at the ballpark, so there probably isn’t a lot of political “there” there. Separately, Julian Assange claims he has emails which will finish Hillary Clinton, though WikiLeaks is delaying the release.
China continues to grapple with its housing bubble in hopes of engineering a soft landing. Watch the video at the end of the story, where investors storm an entrance in order to buy property.

47 Responses

  1. FRIST!

    And . . . more evidence that the left is the home of the self-congratulatory New Racism. So much better than the Old Racism.

    I wonder which race the author considers himself to be a member of.

    Serious scholarship. Lord. I weep for his parent’s wasted money.


    • And, seriously, WTF is a “evolutionary epistemologist”? Whatever. It’s classical racism, attributing qualities shared by all humanity (“laziness, brutishness, unreason, base passions”) with just one group (the group they aren’t a member of, of course), using an entirely self-serving and arbitrary definition of “race”.



  2. No Trump supporter, and he apparently has a history of claiming “poor performance” as an excuse of stealing from contractors foolish enough to work with him without getting money up front (basically, though, given a little thought I find anyone who does anything or sells anything to Trump on credit is foolish and gets pretty much what they deserve . . . which is not an endorsement of Trump, btw).

    Another way of phrasing it is “I let Trump blind me with my greed and took bad advice, and Trump screwed me out of $30,000 because I let him, like a dumbass.”


  3. I don’t agree with most of what Andrew Sullivan writes, but this I think is spot on:

    “I never said there was equal symmetry in terms of culpability, but the left has contributed to this. The social justice left, which is essentially a Marxist construct, has not just advanced an idea of the way the world is but has decided to instantly stigmatize and demonize anyone who dissents from it as a bigot and a racist or a homophobe and all the other litany of bullshit they throw around.

    And there’s only so long that struggling, poor white people can bear being told by what they think is an entire political party, an entire elite, that they are privileged before they lash back.”


    • The difference between Trump and Hillary:

      Trump: “I alone can fix it.”
      Hillary: “A group of elites far superior to you, including myself, are the only people who can fix it.”

      Trump’s has the advantage of brevity.


    • Haven’t read Sullivan’s cited essay from the piece, but this description: “He’s right, too. Anyone possessed by a smartphone knows what it’s like to pantomime the act of presence, to be with someone but not really be with them. Sullivan touches upon some uncomfortable truths here, and his essay is an admirable attempt to wrestle with them.”

      Always begs a question for me. Why is one more desirable than the other. How is the idea that we were more intimately “with” someone before we have video games and smartphones something more than nostalgic fantasy? It’s my old argument: why is watching a TV show worse than watching a movie or a play or going to the opera? Why is playing a video game worse than reading a book?

      All things in moderation, say I.


    • “Sean Illing
      In the piece that you wrote for New York magazine a few months ago, you called Trump an extinction-level threat. Do you still feel that way?

      Andrew Sullivan
      Well, yes.”

      Without a recommendation from jnc4p, that’s as far as I’d normally have to read to dismiss everything that might come after, and click the close box. 😉

      “Because he has openly expressed contempt for the values of liberal democracy, such as dissent. Those people who are against him must be destroyed, not engaged. That is a very profound difference between him and every other nominee for either party in my lifetime and probably in American history.”

      I have a hard time believing Sullivan is that ignorant of history.

      “He also has contempt for the notion of sharing power with others, which is essential in a constitutional republic. This is someone who, frankly, has contempt for the entire American system of government, someone who is hostile to a free press and has openly said he wants to pass laws constraining it, and has declared openly that he will use the powers of the presidency to punish organizations that challenge him.”

      Someone should tell him about John Adams and the Aliens and Seditions act.

      “The Republicans have muddied the waters, not the Democrats.”

      Partisan politics is a religion. About discounting the evidence of your lying eyes on the basis of faith. The Democrats haven’t muddied the waters? It’s all the Republicans?

      “The antecedent causes of Trump stretch back decades, long before Black Lives Matter or the “social justice left” were ascendant, so I’m not sure you can draw a straight line between the two.”

      Blah-blah-blah (says Sean Illing), I’m good-they’re bad, I’m innocent, they are guilty! He had Trump, both innocent and never having made mistakes or errors, would no doubt get along famously.

      “What I’m arguing for is constraints on the popular will, which, as you know, was one of the founders’ core concerns about democracy.”

      I’m not sure, but it sounds like Sullivan is coming out in favor of returning to state legislatures appointing senators, and only white male land owners voting.

      Back to the beginning: “One-on-one human interactions are being replaced by this matrix that is robbing us of the most meaningful parts of life.”

      How, exactly? In what way? What’s so great about sitting with someone and talking to them versus tweeting them or texting them? What’s better about sitting with someone in stony silence versus sitting next to somebody and occasionally sharing a video or meme from Facebook with them? I really think this is a bit of a “you kids get off my lawn” thing.

      “Technology and science are very good at giving us more of what we want, but they’re silent on the question of what we ought to want in the first place.”

      I’m pretty sure science tells me that I ought to want a hybrid vehicle and a fat carbon tax all the time.

      “I’m no better. It’s a constant dopamine drip, and we’re all hostage to it.”

      To me, that’s likely saying washing clothes in a machine is an inherent evil because it gives you time to relax rather than spending your time beating your clothes with rocks at the creek, which is physical labor that improves your soul. 99% of history has featured human lives that were bloody, brutal, disease-ridden and short. I’ll take the trade off of spending extra time in the bathroom browsing when I go to brush my teeth over losing all my teeth and being crippled by gout before dying at age 40 and having watched half my children die … any day of the week.

      Oh noes! We’re hostages to growing sites on the Internet because we’re interested in something at the moment. We like texting because we can express ourselves more fully and often rawly, rather than being civil and dying of the small pox.

      “You are where your attention is, and if your attention is on something abstract, alien, different, new, somewhere out there, and not here and now, you miss what matters most.”

      What? What are we missing? What, objectively, “matters most”? I’d like an answer to that. What we are missing is a slower, smaller dopamine hit, which ultimately seems to be a minor tradeoff, and if we really miss it that much we can reclaim it by how we choose to structure our lives.


    • jnc:

      (From the Sullivan interview)

      What I’m arguing for is constraints on the popular will, which, as you know, was one of the founders’ core concerns about democracy. They feared democracy for precisely these reasons. The United States is a constitutional republic, and it can’t work without constraints on the tyranny of the majority and on the institutions of government.

      My fear about Trump is that he would remove all those restraints because he will have the House and the Senate and the Court and the military and the police … There will be no restraint, and that’s what people are voting for.

      Sullivan is correct about the theory of American government, but if Trump poses a danger it is not because, as Sullivan claims, Trump “would remove all those restraints”. It is because most of those restraints have already been removed by “normal” politicians of the left like Hillary and Obama – who, IIRC, Sullivan voted for. If a robust federalism, real separation of powers, and an unpoliticized Supreme Court actually existed, we would have little to fear from a power hungry executive precisely because the restraints designed by the founders to hold such an executive in check would, well, hold him in check.

      But the left, with the aiding and abetting of Sullivan in the last two elections, has systematically destroyed those restraints. They have vested more and more power in the executive through the proliferation of regulatory agencies. They have increasingly pushed policy creation to the federal level, thus destroying large areas of state sovereignty. And they have done both by inventing a new form of constitutional “interpretation” and then stacking the courts with ideologues whose primary purpose is policy implementation, not constitutional preservation.

      The situation he fears is real, but if he prefers Hillary Clinton to Trump, he is totally blind to its causes.

      And frankly I think Trump poses less of a danger on this front than Obama has been or HRC might be. It is far, far less likely that Trump will have the House and the Senate and the Courts, as Sullivan claims, than for that to be the case if Hillary becomes president. She already has the courts, and will only tighten her grip on it with new additions, and can count on the unwavering loyalty of D’s in congress, just as the D’s in congress have turned a blind eye to Obama’s abuses of power. But hostility to Trump within the Republican party is so deep, and his commitment to conservative ideology so absent, that it is highly unlikely he can count on the blind loyalty of R’s i congress. The one big advantage that I see to a Trump presidency is that it might actually produce a Congress that is united against the abuses of the executive that we have become used to seeing go unchallenged.

      Liked by 1 person

      • ” It is because most of those restraints have already been removed by “normal” politicians of the left like Hillary and Obama – who, IIRC, Sullivan voted for.”

        Completely agree, but I start it with Wilson and especially FDR.

        Liked by 1 person

        • Don’t forget Teddy Roosevelt. I like the Tedster, and am a fan of the national parks, but there’s no getting around the expansion of government and it’s role in civic life that TR was responsible for.


        • jnc:

          Completely agree, but I start it with Wilson and especially FDR.

          Yup, that is true. Obama and HRC are just carrying on the legacy, pushing the boundaries further and further away.


  4. The main reason the progressive left hasn’t completely taken over America:

    Bigotry. They hate white people and men, and it’s hard to get every white person and dude to go along with that.

    “Why Does Our Society Celebrate Sociopathic, Narcissistic and Toxic Masculine Traits? Is there any better symbol of what’s gone wrong in mainstream American culture than the success of Donald Trump?”


    • From the article itself: “We have a candidate who going Godwin against isn’t completely ludicrous — truly, multiple comparisons can be made between Donald and Adolf’s rise, and it really isn’t an eye-rolling comparison this time. That, is, scary.”

      No, it is an eye-rolling comparison. Because it’s absurd and reveals on the historical ignorance of the person making the comparison, not only long history but short history: what does such a comparison mean with it has been made about almost every political candidate by someone in the past 40 years, and about every Republican?

      Working my way down to the comments. 😉


    • the left has called every republican since eisenhower a nazi..


  5. I read jnc4p’s link to the Sullivan interview, then clicked on some links there, and found this interview:

    I really like this: “SI: How concerned are you about income equality moving forward?

    TC: There’s zero evidence that happiness inequality is up, and there’s a fair amount of evidence that it’s down, and happiness and well-being is what we ultimately care about. So I’m not worried about income inequality.

    I worry about how intellectuals react to income inequality, but it turns out intellectuals aren’t that influential. Real people are typically not very bothered by this. They care more about how they’re doing relative to the people they went to high school with than, say, Bill Gates.”

    He’s smart because he says what I think!


  6. Trump: Adolf Hitler or Silvio Berlusconi?

    I actually like the Berlusconi comparison. That’s the one Democrats should be using.


  7. “How do you ask a man to be the last man to die in [Syria]? How do you ask a man to be the last man to die for a mistake?”


    • The lost art of writing. Sentences like this “Sometimes, the specialist says, a police agency will find a body part in one of the trucks. They try to avoid that. But after all, these are machines of war” beg additional explanation. How does that happen? If an explosive goes off in the vehicle, certainly it is too damaged to just be shipped off to a police agency. Were the soldiers occupying it collecting souvenirs? But, no, blithely on to the next paragraph without explanation. Sheesh.


  8. I actually would like to see Trump sue the NYT.

    And no, there aren’t “First Amendment privileges specific to journalists”. That’s not what NYT vs Sullivan was about anyway.

    Liked by 1 person

    • jnc:

      I actually would like to see Trump sue the NYT.

      Forget about a civil suit. It sounds to me like the DOJ should be investigating criminal charges. Of course, the chances of that happening with this politicized DOJ is nil. And if Trump gets elected, and then moves against the NYT, he will be accused of being a tyrant trying to stifle free speech.

      It is hard to exaggerate just how slimy and politicized the NYT coverage of politics is.

      Liked by 1 person

  9. The Gary Johnson wins New Mexico and deadlocks the electoral college scenario.

    Liked by 1 person

  10. I wanted to throw up after reading David Brooks’ BS this morning.

    “Trump, Taxes and Citizenship
    David Brooks
    OCT. 4, 2016”

    More and more, I’m fine with Trump winning just as a big fuck you to all of them.


    • jnc:

      I wanted to throw up after reading David Brooks’ BS this morning.

      It was genuinely sickening. What a bunch of absolute tripe.


      • Trying to follow his logic. Tax paying should be charitable? Ergo, anyone who is wealthy, yet doesn’t pay more taxes than he legally owes, is a bad citizen?

        Wouldn’t this be true of all the presidential candidates? Have any of them paid more in taxes than they owed?

        If we concede the point that billionaires not paying taxes is a problem—and from a big government point of view, of course it is—then the problem is structural, and the traditional liberal complaint applies as the solution: taxes on the rich are too low.

        Brooks argument seems to be that wealthy people who pay only what they owe in taxes and no more are inherently bad citizens, creating an “unlovely society”. Which means that HRC is no different than Donald Trump in that respect. Same with Jill Stein and Gary Johnson, I assume, though neither are as wealthy as Donald Trump or Hillary Clinton.

        Also, he seems to accept that Donald Trump is really a billionaire, which I don’t believe he is. If he ever has been, I suspect it has only been on paper or in theory, and not for very long.


    • “A healthy nation isn’t just an atomized mass of individual economic and legal units.”

      he probably doesn’t realize this argument is a more sophisticated version of :”build the wall”


    • Jesus, that crease in Obama’s pants did more damage that we thought.


    • His ode to LBJ is absurd:

      “In a lovely society we all pull our fair share.

      In a lovely society everybody practices a kind of social hygiene.

      In a lovely society everyone feels privilege, but the rich feel a special privilege.”

      No thank you.


      • I mean, it’s stupid. And, yes, it makes one want to barf. For so many reason. “pull our fair share” is meaningless. How? In what way? Measured by what metrics? Why those metrics but not other metrics? Sure, you may pay more in taxes in me, but you don’t make me laugh nearly as much as this other dude. You’re not pulling for “fair humor share”. And so on. Trying to even everything out ends with everybody dirt poor and/or dead.

        “Everyone feels privilege” … most people have very little control over what they feel, and even lottery winners—people who go from being poor to being millionaires—report that the sense of excitement and happiness and their largess lasts about two weeks. People are not designed to magically feel “special privilege”, because their resources become a baseline, and their rich people problems impact them emotionally with the same force as our poor or middle-class people problems.

        WTF is “social f’king hygiene”? Using hand sanitizer? Breath mints before I talk to you? What?


    • The NYT’s “conservative.” That could have been written by E.J. Dionne…


    • “More and more, I’m fine with Trump winning just as a big fuck you to all of them.”

      The problem is, a Trump win is still a victory for them. They would protest, no doubt (and, my experience with liberals, especially young ones, is that protesting is a lot more fun and exciting than governing, or attempting to make a positive change through boring work and effort). But it would also buttress their deep, religious belief that they are superior to the masses. Some part of them would love to be part of the exclusive better-than-everybody-else club. It was their mutton and mead during the Dubya years, I know.

      I also don’t have much trouble with a Trump win, although it seems precious few people left of center (and not enough right of center) recognize that Trump is not a conservative, and that he and his cronies are not forcefully advancing conservative principles in a non-PC way, but conforming to the parody of conservatives offered as accurate by the left: conservatives are racists, bigots, homophobes, hate poor people, are fascists and embrace dictators.


  11. Volokh explains the latest progressive assault on free speech. (And Andrew Sullivan thinks that Trump represents a bigger danger to free speech.)

    Indeed, a church might be liable even for statements by its congregants (and not just its volunteers, who are acting as agents) that are critical of transgender people. Tolerating such remarks is generally seen as allowing a “hostile environment,” and therefore “harassment.” Indeed, the statement I linked to specifically encourages people to “prohibit derogatory comments or jokes about transgender persons from employees, clients, vendors and any others, and promptly investigate and discipline persons who engage in discriminatory conduct” (emphasis added). But that’s not just encouragement; it simply reflects hostile work environment harassment law, which has long required employers to restrict derogatory speech by clients, to prevent “hostile environments.” See 29 C.F.R. § 1604.11. The same logic applies for places of public accommodation, which Massachusetts says can include churches.

    Now some might think this is fine: Everyone should use the pronouns that the subjects prefer, the argument would go, even if the speaker views such use as endorsement of what the speaker sees as falsehood, or of a wrong-headed ideology. People shouldn’t say derogatory things about transgender people, at least when those people can overhear. Maybe churches could do something different in sermons, or behind closed doors — but once they open their doors for “secular events,” church leaders have to use the words that the law requires, even when they view them as false or even blasphemous, and have to suppress offensive speech by their congregants. I don’t share this view, but I take it that some do.

    Such a sad state of affairs, that we live in a time when the idea that anyone, much less a church, “…has to use the words that the law requires…” can be so casually uttered and accepted as a reasonable use of law.


    • if only someone wrote a book and warned us of the dangers of policing the language!


      • nova:

        if only someone wrote a book and warned us of the dangers of policing the language!

        Apparently it was taken as a how-to guide rather than as what-not-to-do warning.

        Liked by 1 person

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

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

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

Google photo

You are commenting using your Google 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 )

Connecting to %s

%d bloggers like this: