Morning Report: bank earnings 10/14/16

Vital Statistics:

Last Change
S&P Futures 2137.5 11.0
Eurostoxx Index 340.8 5.0
Oil (WTI) 50.7 0.3
US dollar index 88.3 0.2
10 Year Govt Bond Yield 1.78%
Current Coupon Fannie Mae TBA 103.3
Current Coupon Ginnie Mae TBA 104.2
30 Year Fixed Rate Mortgage 3.58

Stocks are higher this morning on good overseas economic data. Bonds and MBS are down.

Inflation at the producer level is picking up, according to the Producer Price Index, which rose 0.3%, higher than expected. The core index is up 1.5% YOY. Inflation remains under the Fed’s target, but we are seeing it creep up towards their preferred 2% range.

Retail sales increased 0.6% last month, in line with expectations. Retail Sales ex autos and gasoline rose 0.3%. Housing-related sales did particularly well, with furniture up 1% and building materials up 1.4%. I wouldn’t be surprised to see some strategists take up their Q3 GDP estimates on this number.

Consumer sentiment unexpectedly fell in early October, according to Reuters and the University of Michigan.

Business inventories rose 0.2%, a little higher than expected. This will have the effect of goosing Q3 GDP growth at the expense of Q4.

Wells Fargo reported earnings this morning. Origination was up 11% QOQ to $70 billion. Purchase activity accounted for 58% of originations. The stock is unchanged in early trading.

JP Morgan reported earnings this morning as well. Mortgage origination was up 8.4% QOQ to $27.1 billion. On an annualized basis, it is down 9.4%.

The typical homeowner’s perception of the value of their home is about 1.25% lower than where the appraised value has been coming in. Appraised values are up almost 8% YOY, which is a faster rate of appreciation than we have been seeing in the real estate indices like FHFA or Case-Shiller.

34 Responses

  1. Poor obama is bummed out that no one believes the MSM anymore:


    • “some sort of curating function that people agree to”

      Problem is that the people he thinks need the curating are the ones least likely to agree to it.

      This has been a long time coming.


      • that is supposedly the role of the “fact checkers” however they are all partisan to and there is too much evidence out there demonstrating it.

        the left no longer controls information and they are miffed.


        • Sure, but anyone who actually believes Alex Jones is just delusional.


        • “Sure, but anyone who actually believes Alex Jones is just delusional.”

          Any more delusional than people who believe Michael Moore?

          Can’t say I know the first thing about Alex Jones, though..


        • Brent:

          A recent NYT profile of Alex Jones:


        • obama quote from video: “democracy in a big, diverse country doesn’t work if you constantly demonize each other.”

          i guess he thinks it works only if he gets to demonize people…


        • Obama doesn’t give a rat’s ass about democracy. Like most progressives, he’d rather see the “right” policies imposed by an authoritarian than see the “wrong” policies be enacted democratically. That is why the left’s preferred means of policy achievement is through SCOTUS and regulators, not legislatures.


        • “Sure, but anyone who actually believes Alex Jones is just delusional.”

          I think this is true of anyone who believes 100% of any information source, except in rare cases in very vertical categories of knowledge.

          Alex Jones may just be right where most people are wrong on a small smattering of things, at some level. Even stopped clocks are right twice a day.

          For “conspiracy” information, No Agenda ( . . . or, humorously, (hint, it doesn’t belong to Sean Hannity) is a much better source of alternative “news” (the refer to it as media deconstruction). Is every crazy thing accurate? No. But I’d rather balance the WaPo, New York Times, and Fox News with the out-of-the-box thinking of No Agenda than take any one of them at face value.


    • From the link:

      Recalling past days when three television channels delivered fact-based news…



      • I know… Muh propaganda!


      • I’m fascinated by this kind of “less is better” thinking.


      • Three television channels delivered more objective, fact-based sounding news. Or, the same propaganda and selective reporting with less apparent sensationalism. However, anyone who wants to research a news event and reach their own conclusions has infinitely more resources to do so now.

        Their Ain’t No Free Lunch. Much greater access to information comes with baggage, ultimately. In this case, more opportunities for echo chambers and more sensationalism in various venues. Still, overall, access to information generally is far better than it was back in the good old days.


  2. Trump is going nuclear on the Republicans. I don’t think HRC can persuade Republican voters to go against the down ballot candidates, but Trump can.

    This is what could flip the House.


    • “I’m so angry at the Republicans,” he says, eyes slitted in a mocking grimace. He’s riffing off the leaked email that shows that allies of Hillary Clinton gave her a question in advance of a town hall broadcast by CNN in March. “I want to be fed information like Hillary gets,” he complains, jabbing with his right forefinger. “The Republicans are not doing their job!”

      How the fuck are Republicans supposed to get CNN to get in the tank for him versus hillary?

      I suspect a lot of this is wishful thinking on the part of the left. Trump supporters are huge 2A advocates, and are convinced the left wants to ban guns..


      • And if Trump tells them to vote against the Republican incumbents, it’s enough to swing the elections.

        The “wishfull thinking” part was the idea that Trump’s comments would switch them to vote for Clinton. But if Trump himself tells his base that the Republican incumbents are all sell outs and that they shouldn’t vote for them, that’s a different story.

        Of course, this could still be the most brilliant false flag political operation of all time.


  3. Just doing the jobs Americans won’t do.

    Hence the layoffs.


    • Getting laid off from the jobs American won’t do.

      In their final weeks on the job, they were required to show foreigners on H-1B visas, brought in by the outsourcing contractors mainly from India, how to do their work.

      This is life. The correct response, that any intelligent, thinking person should know, is to (a) call in sick the entire time, (b) give one day’s notice, explaining you just got another job or (c) stick it out, explaining things incorrectly, claiming that whatever system you are supposed to be showing them is down, mumble and run through the process far too fast for anyone to understand what you are doing, etc.


  4. Like

  5. I love Scott Adams:

    “And if you learn enough about a human being, you’ll almost certainly hate that person.”


    • So, KW, what do you think of this?

      Some possible choices:

      1] The intelligence establishment, often wrong in the past, is wrong about this?
      2] They might be right, but DJT has alternate sources?
      3] Russia is fighting ISIS with its allies, Iran and Assad?
      or my fave:
      4] DJT is Putin’s lapdog.

      You got one? Doesn’t have to be from my list, of course.


      • Is interfering in another country’s election an act of war?


      • @markinaustin: I’m kind of suspecting 1. I think these are independent hackers, primarily Russian but perhaps working as a lose collective across international lines, more than possibly funded by someone with a pro-Trump position (it would be more credible, to me, if Russian mobsters where orchestrating this, to be perfectly honest, or a wealthy Russian with a god-complex, but I don’t say either of those are the case). Is this an official Russian action? Could be, but I seriously doubt it. Are the Russian authorities trying to stop the actions of these independent hackers? No.

        However, I can’t trust the reportage of Dana Priest on this, either. I don’t think I can trust any of the MSM, because the incentive to swallow the narrative whole is too appealing, and the gleed in which it is being reported, repeatedly, to drive the message home has the feeling of an in-kind campaign donation rather than any kind of honest interest in the facts.

        Tom Hamburger bought has bought into the narrative that the Wikileaks stuff is entirely Russia attempting to meddle in the US elections. So, like whether or not gravity is real, no need to spend any time investigating it or pondering why the Russian government would invest so much energy in obvious and visibly attempting to skew the elections.

        I can’t trust the reportage of WaPo on anything, in general. As to why, we could start with it’s purchase by Bezos and work our way down from there.

        Not a big fan of stories built out of “dismayed former officials”, who can be easily selected to build a narrative.

        While there’s something odd going on, I’m not in a position to say what it is. I do know that I find the story we are being given to stink to high heaven.

        If one is to look for a culprit, Julian Assange makes much more sense as the prime mover than Putin:

        Read that. It certainly makes much more sense to me, especially given the likelihood that HRC will win and Trump will lose.

        What we do know is that the left, once unbearably smitten with the white-haired rebel, are now so totally over him and see him for the fascist creep he really is:

        Another possible explanation is that constant captivity and the stress of folks wanting to execute him for treason has driven the already unstable Assange literally insane.


  6. Finally, something I agree with.


    • Getting rid of the filibuster? I concur. Just dump it, be done with it. Or at least require that whoever is filibustering stay on the floor the entire time, ala Mr. Smith Goes to Washington.


  7. But Trump’s a nut for saying it.

    And why does one who has the power to rig elections give up that power? Why did Bush not get McCain in as POTUS?

    And finally, if Kerry really believes this nonsense, how does sucking it up and conceding shed light on and help address the problem?


  8. Let me say for the billionth time: Reporters don’t root for a side. Period.


    • They just shape the news into a narrative that’s more informative to the unwashed masses, to help them make decisions that are to the greatest benefit of the greatest amount of people. Otherwise, left to think for themselves, they might decide wrongly.


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