Morning Report: Housing starts jump 11/17/16

Vital Statistics:

Last Change
S&P Futures 2173.8 1.0
Eurostoxx Index 338.3 -0.2
Oil (WTI) 46.1 0.5
US dollar index 90.8 0.2
10 Year Govt Bond Yield 2.25%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 4

Stocks are flattish on no real news. Bonds and MBS are down small.

Janet Yellen is speaking on Capitol Hill this morning. Her prepared statement is here. She said that job growth has been lower than last year but still above forecasts. They believe the labor market has further room to run. She pointed out that economic growth has improved from its sluggish start of the year and inflation remains tame. Nothing in the statement would change the forecast for a 25 basis point hike next month.

Speaking of inflation, the consumer price index rose 0.4% in October, in line with forecasts. Ex-food and energy, it rose 0.1% and is up 2.1% YOY.

The NAHB / Wells Fargo Housing Market Index, a measure of homebuilder sentiment was flat at 63, and is still well above neutral.

Housing starts rose to 1.323 million. This is an increase of 23% YOY, which shows the housing market may finally be getting some traction at long last. This is a 9-year high. Remember, “normalcy” is closer to 1.5 million units, so we still have a lot of room for growth. Building Permits were up 4.6% YOY to 1.23 million.

Initial Jobless Claims fell to 235k last week, which is the lowest level since early 1973, just after the Vietnam War draft ended. Employers continue to hang onto their workers.

House prices increased 7% in October, according to RedFin. Inventory dropped by 8.6% YOY, which is the 13th consecutive monthly drop. Homes stayed on the market an average of 49 days, a drop of 5 days from a year earlier. 21% of all homes were under contract within two weeks, and 20% sold for more than their asking price.

Average FICOs for closed loans dropped somewhat in October to 730 from 731, according to Ellie Mae. Purchases accounted for 53% and refis accounted for 47%.Time to close was steady at 48 days. ARMS slipped to 4% of all loans, however as rates increase they will undoubtedly become more popular at some point.

Consumer comfort increased last week, according to Bloomberg.

Democrats named Chuck Schumer Senate Minority Leader yesterday. As a practical matter, he comes from NY so he should be at least somewhat sympathetic to the financial sector, which could go a long way in helping fix some of the issues with Dodd-Frank.

55 Responses

  1. Frist!

    Lots of people on the left unhappy with the Chuck Schumer appointment. It should have been Bernie! Or someone they liked better, instead of someone who was so instrumental in raising money for Democrats. Because filthy lucre!


  2. God bless America and the Old Gray Lady.

    This is a must read from the NYT.

    At least publicly, he played the statesman; he subordinated his own ambitions for the sake of governmental continuity, ensuring that the country was not thrown off balance at a time when the United States was enmeshed in a Cold War with the Soviet Union. “I could think of no worse example for nations abroad,” he said, “than that of the United States wrangling over the results of our presidential elections, and even suggesting that the presidency itself could be stolen by thievery at the ballot box.” (And, of course, he hoped to have a long political career ahead of him; being seen as a sore loser wouldn’t further it.)

    Whether Nixon privately encouraged the recount efforts is almost beside the point; unlike Mr. Trump, he understood that unless rock-solid evidence existed to the contrary, the country needed to have faith in the electoral process and the peaceful transition of power, and it needed to hear from the losing candidate that he did, too.

    I have been searching for the article on what Nixon could teach the Democrats about losing and I can’t find it anywhere.


    • This guy is dropping so many truth bombs it’s scary.

      I realize that all of this is going to make me sound like a crazy person and put me completely at odds with every respectable thinker in the media, but luckily, being a crazy person at odds with every respectable thinker in the media has been a pretty good ticket to predictive accuracy lately, so whatever.

      This is what I’m saying:

      This, I think, is the first level of crying wolf. What if, one day, there is a candidate who hates black people so much that he doesn’t go on a campaign stop to a traditionally black church in Detroit, talk about all of the contributions black people have made to America, promise to fight for black people, and say that his campaign is about opposing racism in all its forms? What if there’s a candidate who does something more like, say, go to a KKK meeting and say that black people are inferior and only whites are real Americans?

      We might want to use words like “openly racist” or “openly white supremacist” to describe him. And at that point, nobody will listen, because we wasted “openly white supremacist” on the guy who tweets pictures of himself eating a taco on Cinco de Mayo while saying “I love Hispanics!”

      The huge number of links he has to people calling Trump “openly racist” with no documentation is impressive, too. Worth the read for that.

      If you Google “trump KKK”, you get 14.8 million results. I know that Google’s list of results numbers isn’t very accurate. Yet even if they’re inflating the numbers by 1000x, and there were only about 14,000 news articles about the supposed Trump-KKK connection this election, there are still two to three articles about a Trump-KKK connection for every single Klansman in the world.

      I don’t see any sign that there are other official white supremacy movements that are larger than the Klan, or even enough other small ones to substantially raise the estimate of people involved. David Duke called a big pan-white-supremacist meeting in New Orleans in 2005, and despite getting groups from across North America and Europe he was only able to muster 300 attendees (by comparison, NAACP conventions routinely get 10,000).

      Mainstream press? Anything? Bueller?

      So the mainstream narrative is that Trump is okay with alienating minorities (= 118 million people), whites who abhor racism and would never vote for a racist (if even 20% of whites, = 40 million people), most of the media, most business, and most foreign countries – in order to win the support of about 50,000 poorly organized and generally dysfunctional people, many of whom are too young to vote anyway.

      Caring about who the KKK or the alt-right supports is a lot like caring about who Satanists support. It’s not something you would do if you wanted to understand real political forces. It’s only something you would do if you want to connect an opposing candidate to the most outrageous caricature of evil you can find on short notice.

      Boom! That truth bomb destroyed 100 city blocks!

      So our different ways of defining “open white supremacist”, even for definitions of “open” so vague they include admitting it on anonymous surveys, suggest maybe 1-2%, 1-2%, 4-7%, 3-11%, and 1-3%.

      But doesn’t this still mean there are some white supremacists? Isn’t this still really important?

      I mean, kind of. But remember that 4% of Americans believe that lizardmen control all major governments. And 5% of Obama voters believe that Obama is the Antichrist. The white supremacist vote is about the same as the lizardmen-control-everything vote, or the Obama-is-the-Antichrist-but-I-support-him-anyway vote.

      I think I’m in love. And this:

      But notice that the evidence on the side of Trump being against David Duke includes twenty years of unambiguous statements to that effect. And the evidence of Trump not being against David Duke includes one statement along the lines of “I don’t know who he is but I’ll look into it” on an interview one time which he later blamed on a bad earpiece and said he totally disavowed.

      This whole piece is a barrage of logic completely missed by what seems to be a majority of people on the left, amongst the Democrats, and in the media who reportedly love facts and logic (so much so that “facts have a liberal bias”) yet can’t put two-and-two together as quickly and simply as this guy, who thinks Trump is awful and did not support him, managed to do.

      This gets back to my doubts about “dog whistles”. Dog whistling seems to be the theory that if you want to know what someone really believes, you have to throw away decades of consistent statements supporting the side of an issue that everyone else in the world supports, and instead pay attention only to one weird out-of-character non-statement which implies he supports a totally taboo position which is perhaps literally the most unpopular thing it is possible to think.

      And then you have to imagine some of the most brilliant rhetoricians and persuaders in the world are calculating that it’s worth risking exposure this taboo belief in order to win support from a tiny group with five-digit membership whose support nobody wants, by sending a secret message, which inevitably every single media outlet in the world instantly picks up on and makes the focus of all their coverage for the rest of the election.

      Did I say I was in love? Because I totally am. He’s wielding Occam’s razor like a broadsword. I love this dude.

      Finally, no, none of this suggests that Donald Trump is courting the white supremacist vote. Anybody can endorse anybody with or without their consent. Did you know that the head of the US Communist Party endorsed Hillary, and Hillary never (as far as I know) “renounced” their endorsement? Does that mean Hillary is a Communist? Did you know that a leader of a murderous black supremacist cult supported Donald Trump and Trump said that he “loved” him? Does that mean Trump is a black supremacist? The only time this weird “X endorsed Y, that means Y must support X” thing is brought out, is in favor of the media narrative painting Trump to be a racist.

      And . . . all you need to know about Politifact:

      As multiple sources point out, both Hillary and Obama voted for the Secure Fence Act of 2006, which put up a 700 mile fence along the US-Mexican border. Politifact says that Hillary and Obama wanted a 700 mile fence but Trump wants a 1000 mile wall, so these are totally different. But really? Support a 700 mile fence, and you’re the champion of diversity and all that is right in the world; support a 1000 mile wall and there’s no possible explanation besides white nationalism?

      Truth grenade:

      Calling this “open white supremacy” seems like those libertarians who call public buses Communism, except if “Communism” got worn out on the euphemism treadmill and they started calling public buses “overt Soviet-style Stalinism”.

      10. Isn’t Trump anti-Semitic?

      I feel like an attempt to avoid crying wolf might reserve that term for people who didn’t win an Israeli poll on what candidate would best represent Israel’s interests, or doesn’t have a child who converted to Judaism, or hasn’t won various awards from the American Jewish community for his contributions to Israel and American Judaism, or wasn’t the grand marshal of a Salute To Israel Parade, or…

      I think I’ve literally found my soul-mate. He cited furniture-related deaths!

      You can argue that he and his supporters are biased for caring more about terrorism than about furniture-related injuries, which kill several times more Americans than terrorists do each year. But do you see how there’s a difference between “cognitive bias that makes you unreasonably afraid” versus “white supremacy”?


    • Not “interesting”. Brilliant. This is a must read and spread.


  3. I hope Kelly Ann Conway stays on in the administration. She is a useful voice of reason:

    “But Trump’s campaign manager, Kellyanne Conway, said Thursday that the session at Trump Tower, which Vice President-elect Mike Pence will attend, will be “much less formal” than in the future because Trump has yet to assume office.

    “We are very sensitive to the fact that President Obama is still in office for the next two months, and we won’t be making diplomatic agreements today,’’ said Conway, who also pushed back against media reports that the transition is in disarray.

    “In 2000 the country went to Thanksgiving without knowing who the president was,’’ she said, referring to the legal fight following the contest between George W. Bush and Al Gore.”

    Trump is going to cause the establishment fits:

    “The meeting with Abe arose from a phone conversation between the Japanese leader and Trump. When Abe called to congratulate Trump shortly after his victory, he mentioned that he would be passing through New York this week and suggested a meeting. “That would be awesome,” Trump immediately responded, according to people briefed on the conversation.”


  4. Also from McWing’s brilliant link, there’s this:

    Stop writing articles breathlessly following everything the KKK says. Stop writing several times more articles about the KKK than there are actual Klansmen. Remember that thing where Trump started out as a random joke, and then the media covered him way more than any other candidate because he was so outrageous, and gave him what was essentially free advertising, and then he became President-elect of the United States? Is the lesson you learned from this experience that you need 24-7 coverage of the Ku Klux Klan?

    I am not the only one, I take it, that thinks the press is giving the KKK and Stormfront much more ink than they deserve. Much, much more ink. In their noble quest to delegitimize Trump, they are elevating White Nationalism, Stormfront, and the KKK. Giving them more attention than they have had in years. They are potentially allowing the credit that almost half the country apparently gives Trump to rub off on these largely abhorrent collections of mentally ill people just capable enough to organize, pull on white sheets, and type out angry screeds on the Internet.

    I don’t see that a positive. Given the apparent results of giving Trump constant coverage in the primaries and general election, do they really believe paying this much attention to the KKK, Stormfront, and David Duke is a good idea?

    Apparently they do. I can promise them, it’s not. I hope Trump moves to quickly make some decisions that will anger the KKK and white nationalists and so on, as when they start saying negative things about Trump the press will immediately stop giving them any attention.


  5. Scott asked me to see if I really thought there was equivalence between the liberal media’s blanket characterizations of those who don’t vote Democrat and conservative blanket characterizations of Democrats/liberals/progressives.

    Well, based on Scott’s definitions, there apparently are a lot more accusations of “racism”, etc., then there are of “tree hugger”, or “takers”, or “international conspiracists” who “hate America”. However, there is a lot of “baby killers” talk floated by the single issue folks,

    Conservative mainstream, especially: Weekly Standard and NRO and WSJ are much more circumspect than NYT and WaPo.

    My criticism of DJT remains that he is a con artist with a checkered career of broken promises and contracts, with no business being POTUS. Nevertheless, he will become our and my POTUS, so I damned well hope he is a quick study and keeps some smart folks around him who aren’t trying to manipulate him at every turn. Also, in remembrance of Lawrence Welk as presented by Stan Freberg, “Somebody turn off the Twitter Machine.”

    The Freberg spoof is apparently still copyright protected.


    • Mark:

      However, there is a lot of “baby killers” talk floated by the single issue folks,

      It is probably true that some pro-life organizations promote that characterization. But is it really at all comparable to the “war on women” narrative that is so prevalent among the pro-choice left?

      National Right to Life is the biggest and most prominent right to life organization in the nation. Are there many (or any?) examples of it or its officials demonizing pro-choice advocates as “baby killers”?

      Planned Parenthood, on the other hand, one of the biggest advocates for legal abortion, routinely demonizes the pro-life movement as a “war on women”. Google “planned parenthood war on women” and the very first return is an art show being promoted by Planned Parenthood called, you guessed it, War on Women.

      Or how about NARAL, the other high profile pro-choice organization in the US. Their website is saturated with references to a “war on women”.

      The “war on women” is one of former Speaker of the House Nancy Pelosi’s favorite talking points. How many times has the phrase “baby killer” been uttered by current Speaker of the House Paul Ryan? Or, really, any other high profile R politician? Even Trump, who is just the sort of person I would expect to use that kind of rhetoric?

      My point is not that there are no examples of this kind of thing on the right, but rather that the left has basically made an institutional practice of it, on issue after issue, from top to bottom. It seems to me that the left spends far more time trying to write its political opposition out of the realm of acceptable and respectable opinion (narrowing the Overton window, as Milo mentioned) than does the right, and it doesn’t strike me as a close enough call to even be debatable.


      • This is a case where who says what gets mixed up. Have any pro-life politicians referred to the pro-choice side as “baby killers”? Knowing politicians, probably a few, but very few. More likely “infanticide” but likely not many of them. Individuals can say and do anything, but there’s no messaging on the pro-life side that says “go call them baby-killers”, but there’s no sign they believe that’s effective messaging. use the term, as do a lot of (for lack of a better term) “alt right” sites, presumably because they preach to the choir. It’s not effective messaging.

        I googled National Right to Life and “baby killers” and could only find references condemning abortion clinic shootings, or any murder done in the name of anti-abortion. Googling politicians and “baby killers” could probably accomplish the same.

        There are plenty of individual advocates and “conservative voices” that seem to use the term, or the direct concept, calling abortion doctors murderers or referring to abortion as infanticide. It may be accurate from their point of view, but easily as inflammatory as the “war on women” rhetoric.

        That clearly doesn’t work, given the numbers of women that voted for Trump.


      • Found one politicians who has used the term “baby killer” in a public way, and he had to admit to it and apologize.


  6. Anyone think Obama will recess appoint Merrick Garland to SCOTUS?


  7. Why the progressive left won’t be able to organize an effective opposition to Trump.

    They are too busy arguing over the proper form of virtue signaling amongst themselves.

    “The backlash over safety pins and allies, explained
    The latest fight in the battle of wokeness: safety pins.
    Updated by Alex Abad-Santos
    Nov 17, 2016, 10:00am EST ”

    Liked by 1 person

  8. Turnover in Trump’s transition team leads to multiple people referring to the people coming and going as “Stalinesque Purges” (among other ongoing critiques).

    And Morning Joe:


    • I’m not an expert in this, but it seems that they have had some aspects that may be anti-Semitic or racial. By the way, even in the tea party, we have a broad movement like this, and we’ve been criticized, and they try to make the tea party as being racist, etc., which it’s not. But there’s always elements who turn up at these things, whether it’s militia guys or whatever. Some that are fringe organizations. My point is that over time it all gets kind of washed out, right? People understand what pulls them together, and the people on the margins I think get marginalized more and more.

      I believe that you’ll see this in the center-right populist movement in continental Europe. I’ve spent quite a bit of time with UKIP, and I can say to you that I’ve never seen anything at all with UKIP that even comes close to that. I think they’ve done a very good job of policing themselves to really make sure that people including the British National Front and others were not included in the party, and I think you’ve seen that also with tea party groups, where some people would show up and were kind of marginal members of the tea party, and the tea party did a great job of policing themselves early on. And I think that’s why when you hear charges of racism against the tea party, it doesn’t stick with the American people, because they really understand.

      I think when you look at any kind of revolution — and this is a revolution — you always have some groups that are disparate. I think that will all burn away over time and you’ll see more of a mainstream center-right populist movement.

      I’m trying to figure out where his ties to the Ku Klux Klan are, and all his White Nationalism. I’m not seeing it.


  9. I laughed.

    Liked by 1 person

  10. Great line from Ace, in a piece on the politicization of ESPN.

    If you’re a business selling a non-political good, you should talk to me about your political preferences to the same extent my parents talk to me about their favorite sexual positions: not at all.

    I laughed.

    (McWing…I laughed at “ich bin ein narcissist” too.)

    Liked by 1 person

    • I will never quite understand where sports news (I’m not a sports person) gets into politics, or entertainers (actors and musicians) feel like they have to share all their political insights like they are the first person to have them . . . it’s a weird kind of exhibitionism.


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