Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Memetrics
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | |
| S&P Futures | 2201.2 | 3.0 |
| Eurostoxx Index | 341.0 | -1.0 |
| Oil (WTI) | 50.6 | 1.2 |
| US dollar index | 91.7 | -0.3 |
| 10 Year Govt Bond Yield | 2.41% | |
| Current Coupon Fannie Mae TBA | 103 | |
| Current Coupon Ginnie Mae TBA | 104 | |
| 30 Year Fixed Rate Mortgage | 4.14 |
Stocks are flat this morning on no real news. Bonds and MBS are down small.
OPEC agreed to production cuts yesterday, which has sent the price of WTI over $50 a barrel.
Further evidence of strength in the labor market: announced job cuts fell to 27,000 last month, which is the lowest in a year. This is a 13% drop YOY. The retail sector had the biggest number of job cuts, largely due to the bankruptcy of American Apparel. Job cuts in the financial sector continue, however cuts in the energy sector are tapering off.
Initial Jobless Claims ticked up to 268k from 253k last week.
Manufacturing improved in November, as the ISM Manufacturing PMI increased from 52.3 to 53.2. Separately, the Markit PMI Manufacturing index ticked up to 54.1 from 53.9.
Construction Spending rose 0.5% last month and is up 3.2% YOY. Residential Construction was up 1.8% and is up 4.6% YOY.
Treasury Secretary nominee Steve Mnuchin said that Fannie Mae and Freddie Mac should exit government control, which puts him at odds with several Republicans like Jeb Hensarling who want to see the GSEs wound down. “We will make sure that when they are restructured, they are absolutely safe and don’t get taken over again. But we’ve got to get them out of government control,” Mnuchin said on an interview with Fox News. What “exit government control” actually means is an open question, however he believes that Fannie Mae is crowding out private lending. Getting private lending back into the mortgage market has been a priority since the financial crisis since 96% of all new origination still goes Fannie, Freddie, or Ginnie. I would also wager that the biggest ultimate lender to the mortgage market is the Fed, via their QE holdings of MBS. So the US mortgage market is for all intents and purposes nationalized at this point. Fannie Mae stock was up 46% on the statements. One big issue for privatizing Fannie and Fred: At the moment, all of their profits go to the government. By 2018, they will probably have no equity left, which isn’t good news for common stockholders.
Donald Trump also tapped a Quicken executive to the HUD transition team. He also named Jimmy Kemp, son of former HUD Secretary Jack Kemp, to the team as well. In many ways, these nominations signal a detente between the government and the financial sector, which should help tremendously with the goal of bringing private capital back into the mortgage market.
Separately, Mnuchin and Commerce Secretary Wilbur Ross were interviewed on CNBC, where they laid out more of their regulatory philosophy. Mnuchin said that Dodd-Frank was too complicated and the goal of financial regulation is to get banks to lend again. He cited regulatory uncertainty as a major impediment to lending. Wilbur Ross quipped that small banks have more compliance people than lending officers. Both said that lending is the engine of growth for the economy.
Liberals are screaming “hypocrisy” about Trump’s nominees, especially in the financial sector, but it is clear that having public interest attorneys running things has the system tied in knots.
Filed under: Economy, Morning Report |
All Things in Moderation 
Frist!
LikeLike
Scott Adams, dead on right again:
LikeLiked by 1 person
I think you’re right, of course (echo . . . echo . . . echo). But I think Cons view will dominate on the left side of the aisle, and certainly in the mainstream media, that somehow deconstructing Trump’s populist wins as bad things will work at beating Trump. A careful litigation of the facts is, in my opinion, never going to beat a working class dude looking at the camera and saying: “He saved my job.”
I feel like the eye-rolling condescension of a dismissive “it’s only 1000 jobs, it doesn’t even matter, it’s a drop in the bucket” is at once technically accurate, but awful optics. Worse than Trump asking everybody to pledge an oath to him while holding his arm in a quasi sieg heil gesture. Because this is painting much of the left into a “your job doesn’t matter, racist” position.
And it’s one thing to dismiss flyover country as racist rubes, and tell them they aren’t worthy to vote for you, and then unsurprisingly not receive their vote. When you start telling pockets here and there that their jobs don’t matter, and poo-pooing the fact that you thought you were losing your job but you get to keep it . . . that’s another. And far more people will be sympathetic, by proxy, with the job-keepers (and the president that helped that happen) than the people telling them that they’ve got it all wrong, that Trump gave them tax breaks to keep those jobs (as if this will be perceived as a bad thing to the people getting to keep their jobs).
Adams also has it nailed in the first-impressions bit. The overarching impression that Trump is giving is that he wants to save your jobs and will do what it takes to make that happen.
Many on the left and in the MSM are giving the impression that they don’t care about your job and also you’re too stupid to understand why people getting to keep their jobs is bad for America.
I wonder how that’s going to play in the upcoming election cycles.
LikeLike
Vader: I have altered the deal. Pray I don’t alter it any further.
(Vader leaves again. Lando is left holding the dress)
Lando: This deal’s getting worse all the time!
(Vader reappears and produces a unicycle)
Vader: Here is a unicycle. You will ride it wherever you go.
Lando: What?! I’m not riding no fucking unicycle!
LikeLike
LikeLike
i forgot we could do that.
LikeLiked by 1 person
Pray I don’t alter it any further!
LikeLike
jnc (from Adams):
The political filter misses the story completely. As usual.
It may miss a story, but I don’t understand why Adams thinks the story his “filter” uncovers is the only story worthy of being uncovered. Why isn’t the story that the Ford and Carrier situations are claims of exaggerated success worthy of being told? Why does Adams think that journalism at large should, as he does, singularly focus on how people will respond to Trump’s methods rather than on the facts of the methods?
I mean, let’s imagine how Adams’ focus might apply to another politician in a different context.
No, I am absolutely not trying to compare Trump to Hitler. But I am trying to show how admiration for Trump’s skill as a “Master persuader”, and a singular focus how successfully that skill has been applied, is not necessarily the only, or the most important, or even the most interesting, focus for observers to have.
LikeLike
A good point. And I like the comparison.
But I don’t think Adams asserts his is the only angle, though it’s an important angle, especially in terms of what Trump actually can accomplish, and how he performs in the public referendums of elections in 2018 and 2020.
I think why it’s interesting is that so much of the mainstream press does seem to miss the point. In terms of broad influence and the emotional attachment most people have towards Trump, the Carrier and Ford stuff couldn’t have worked out better for him.
An objective press could and should review the facts of the matter. But the emotional content matters, too, and in these cases matters a lot. This isn’t shutting down some prison in Cuba that we feel is bad but have had no interaction with in reality. This is Trump Saving Jobs™, and I have a job and that might hit very close to home very soon.
You might question whether his tone should be so approving or his optimism about the Trump presidency quite so optimistic, but I agree entirely with him about the importance of Trump’s moves in terms of popular appeal and winning future elections. And it is very interesting to see how few in the MSM see it.
LikeLike
KW:
But I don’t think Adams asserts his is the only angle
How else is one to take the claim that “The political filter misses the story completely…Here’s the real story”?
You might question whether his tone should be so approving or his optimism about the Trump presidency quite so optimistic,…
I can understand the tone and admiration if it comes from a totally disinterested, 3rd party point of view. But I don’t think any American has or should have such a point of view. (That is one of Obama’s more irritating tics…he often adopts a disinterested, above-it-all manner when discussing American interests in the world.) I can agree with Adams that Trump is a Master Persuader and the greatest CEO in the world and still be totally and completely appalled at the prospect of a president Trump, if I think that what he is persuading people to support and what he is implementing as a CEO is bad policy.
Adams concludes by saying “If you are worried about Trump’s talent for leadership, this should help set your mind at ease.” I think a more fundamental question, which many people are worried about but which Adams not only ignores but seems to dismiss as utterly irrelevant, is where exactly he might be leading us.
LikeLiked by 1 person
Well in my case it’s useful for illustrating why Trump’s messaging tactics are likely to succeed, regardless of the merits of his policies.
At PL, they are way too enamored of the premise that since Trump is a Bad Person, everything he does is stupid, guaranteed to fail, and based on racism.
LikeLiked by 1 person
And that criticizing things through the political sense, like wonks, will have some kind of broad appeal. And won’t be seen as Democrats attacking the idea of keeping jobs in America.
LikeLike
https://www.washingtonpost.com/blogs/plum-line/wp/2016/12/01/how-democrats-can-build-a-real-opposition-to-donald-trump/?utm_term=.758fdab5b29f
Yup. Totally not in denial.
LikeLike
Trump’s PR benefits keep getting better from the Carrier deal:
http://www.thegatewaypundit.com/2016/12/flashback-obama-mocks-trump-plan-keep-carrier-jobs-usa-video/
LikeLiked by 1 person
Trump just brings it out of them.
LikeLiked by 1 person
You’re gonna want to grab some tissues and head to your bunk to read this one.
https://www.washingtonpost.com/politics/shouting-match-erupts-between-clinton-and-trump-aides/2016/12/01/7ac4398e-b7ea-11e6-b8df-600bd9d38a02_story.html?utm_term=.258db0745453
It’s like when you’re 13 and you’re going to be alone in the house for hours and you stumble upon your first Pebthouse.
LikeLiked by 1 person
The Clinton people really are a disgrace.
LikeLiked by 1 person
Another question, especially for Scott Adams fans:
Adams has said:
“I have been telling readers of this blog for a year that facts don’t matter. Policies don’t matter. The only thing that matters is persuasion….The decision-making process is largely divorced from facts and reason. We live under a consistent illusion that facts and logic guide our decisions. They don’t.”
And also:
“…humans are not rational. Our first impressions rule our emotions forever.”
Who here accepts this to be true of themselves?
LikeLike
As an explanation for the behavior of the electorate as a group, it seems to fit just fine.
You certainly can’t use ideology or facts to explain a shift from Obama to Trump.
I think this group is an outlier in terms of actual level of engagement with politics and policy.
LikeLiked by 1 person
jnc:
As an explanation for the behavior of the electorate as a group, it seems to fit just fine.
Perhaps, but should I take this to mean that your answer to my question is that you don’t accept Adams’ claims to be true of you as a voter/decider?
You certainly can’t use ideology or facts to explain a shift from Obama to Trump.
But how many people does that shift actually apply to?
I think this group is an outlier in terms of actual level of engagement with politics and policy.
Doesn’t this suggest, then, that the explanation isn’t so much rooted in human nature, as Adams suggests, but rather is rooted in the disinclination among a certain subgroup of voters to care about or pay attention to politics and policy?
LikeLike
“I think this group is an outlier in terms of actual level of engagement with politics and policy.”
I think half the people who show up to vote are almost completely disengaged from politics, or live entirely in a sound-bite, meme-based bubble. And that’s generally.
I think Trump attracted a lot of traditionally non-voting people to vote (as he predicted) in critical states. And not because they had a deep understanding of his policy or politics or even knew who Mike Pence was, aside from being Trump’s VP choice.
LikeLike
I agree that there is a tribalism that affects how we view policy. I think the narrative if Obama intervened in the Carrier situation would be more focused on whether that was an “anti-business” move and whether the government should be interfering with legitimate and legal business decisions. The pro-business / free market people are largely silent on what Trump is doing.
LikeLiked by 1 person
At the least, they are intelligent enough to understand that, like it or not, coming out against keeping jobs in America has very, very bad optics.
LikeLike
Brent:
I agree that there is a tribalism that affects how we view policy.
I am sure that is the case, although I have seen a lot of criticism of the Carrier deal from the right.
http://thefederalist.com/2016/12/01/donald-trumps-carrier-deal-is-just-cronyism-as-usual/
http://www.nationalreview.com/article/442663/donald-trump-carrier-deal-keeps-some-jobs-indiana-cost
http://www.aei.org/publication/carrier-and-the-goon-squad/
http://www.redstate.com/patterico/2016/12/01/crony-capitalism-like-trumps-carrier-deal-problem/
To be fair it is coming mainly from the anti-Trump right, but that makes sense to me, since one of the main things that made the anti-Trump right anti-Trump in the first place was the fact that his “conservatism” was just a facade, without any real principle or thought involved. And he is displaying that now.
But anyway, this is exactly what bugs me about Adams’ coverage. According to him, all of this criticism (whether from the right or the left) of the economic reality of the Carrier deal is missing the “real” story. Instead, he seemingly thinks the coverage should revolve simply around what a masterful political move it is, in that it will help “persuade” people who don’t really care about the “facts” to support him and keep him in power. Apparently to Adams, what exactly he is doing with that power is not worth considering or talking about. I think that view is cynical, destructive, and utterly wrong.
LikeLike
I get the sense that Adams doesn’t think Trump is going to be any worse than any other president. I think if he really believe Trump would be the next Hitler, he would be less effusive.
Also, leading up to the election his analysis was predictive—he was arguing the press was attempting to forecast the election wrong, and those trying to persuade voters on the Democrat side were almost universally using the wrong strategy.
Presently, I think the idea that it’s the “real story” is too ambitious, but it certainly is a story, and one the mainstream press seems to miss.
LikeLike
” I think that view is cynical, destructive, and utterly wrong.”
I think it’s cynical and a useful way to understand why Trump won.
Pretending people vote based on ideology when they don’t is a recipe for self delusion.
What I think is about to be discovered is that free market, limited government and rule of law aren’t nearly as popular as have been assumed.
Adams states that he doesn’t align with either Trump, the Democrats or the Republicans when it comes to policy.
However, his appreciation for Trump’s “craftmanship” as a persuader often gets him labeled as a Trump supporter or at best an apologist. As that label is used to describe me over at PL, I’m sympathetic to Adams getting hit with the same attack.
LikeLike
jnc:
I think it’s cynical and a useful way to understand why Trump won.
The “view” referred to was the view that “what exactly he is doing with that power is not worth considering or talking about”. I think one can understand why Trump won without also thinking that what Trump will do with power isn’t worth considering or talking about, nor do I see why the latter would be useful in understanding the former. I personally find Adams’ explanation of Trump’s success to be very compelling while also thinking at the same time that the policies Trump will actually implement is of the utmost importance.
Pretending people vote based on ideology when they don’t is a recipe for self delusion.
Two points. First, I’ll ask again: Did you vote based on ideology? Is it delusional of me to think that you did?
I think Adams’ observations are true/applicable to a certain subset of voters, and in this election those voters were decisive. (Perhaps they are always decisive.) But I also think that Adams’ observations cannot be generalized to everyone, as he attempts to do. Plenty of people really do vote based on ideology. To many, many voters, the “facts” really are important (and I would argue should be), and so to dismiss attempted discussions of those “facts” as irrelevant and “missing” the “real” story is just plain wrong.
(As an aside, I suspect that Adams knows that his analysis isn’t really universal and applies only to a certain, particularly disengaged and manipulable portion of the electorate. But to say so is to come off sounding as condescending as it actually is, so he presents it as something that is true for everyone equally as the result of human nature. It is another version of the classic “We are such a stupid country” where “we” = “other people, but not me”.)
Second, let’s say it really is a self-delusion to think that anyone votes based on ideology. Unless I am a campaign strategist trying to figure out the best way of getting people to vote a certain way, what value is there to me in having this self-delusion dispelled?
What I think is about to be discovered is that free market, limited government and rule of law aren’t nearly as popular as have been assumed.
I very much agree. In fact I lamented my realization of that fact way back when Trump won the R primary.
Adams states that he doesn’t align with either Trump, the Democrats or the Republicans when it comes to policy.
Another indication that even he doesn’t really believe his whole “facts are irrelevant” schtick.
However, his appreciation for Trump’s “craftmanship” as a persuader often gets him labeled as a Trump supporter or at best an apologist.
Just to be clear, I am not saying that at all. I am criticizing him simply for his dismissal of policy “facts” as being irrelevant to political discussions.
LikeLike
“his appreciation for Trump’s “craftmanship” as a persuader often gets him labeled as a Trump supporter or at best an apologist. As that label is used to describe me over at PL, I’m sympathetic to Adams getting hit with the same attack.”
You, too? I just got labeled a Trump apologist for suggesting that he doesn’t care about Paul Ryan’s Medicare ambitions and it’s irrelevant, anyway, as a vouchered Medicare system will not get past the senate. Which is opinion, not apologia. But whatevs.
LikeLike
I completely accept that I am not rational (which makes it easy to believe of everybody else, which is, necessarily, not rational).
I also accept the overall importance of first impressions. They tend to be emotional, snap-judgements, and very difficult to overcome. First impressions can be overcome, but even these changes tend to be emotional. We are hardwired to be emotional, and use our rational faculties to explain our emotional decisions after the fact.
Anyone who has ever lost their temper, yelled at people, and created mess and lost credibility with people, yet can still excuse this behavior because they had a really good reason to be mad, has experienced this.
People with brain damage that disconnects them from their emotions cannot make decisions. People with overwhelming depression (i.e., one dominant emotion creating a steady-state) have a great deal of trouble making decisions. More on that:
http://bigthink.com/experts-corner/decisions-are-emotional-not-logical-the-neuroscience-behind-decision-making
And this makes a lot of sense. The need to survive predates a large cerebral cortex.
People are inherently irrational, and are hard-wired to use their intellectual powers of pattern finding and reason-determining to come up with ex post facto explanations for decisions that are made, emotionally, by their lizard brain. Since we are in our brains, this process is entirely invisible to us.
LikeLike
KW:
People are inherently irrational.
Is that a conclusion you arrived at after rational consideration, or is it just the product of your emotional desire for it to be so? If the former, then you proven the claim to be wrong. If the latter, then there is no reason to believe it to be true.
Either way, perhaps you can see why I dismiss such a self-negating premise as not worth even thinking about.
LikeLike
Probably the latter, feels like the former. 😉
I certainly understand why you’d feel that way. 🙂
LikeLike
are you able to set emotions aside when you trade?
LikeLike
Brent:
are you able to set emotions aside when you trade?
Not always, but I do try.
Just to be clear, I am not saying that emotions do not or cannot lead us to do irrational things. Of course they can. But to say that people are inherently irrational is just not an idea worth even contemplating. If it is true, then knowing it will have no effect on us, and if it isn't true, then it should be dismissed.
LikeLike
Inherently emotional. Not irrational.
“If it is true, then knowing it will have no effect on us”
I don’t know that that is true. Clearly, external input and cogitation influences our emotions, as does what we eat, what drugs we may or may not take, the consumption of alcohol, and exercise. Thus, our emotional decision making may become more rational when we do things that keep our emotions in balance.
Also, appreciating that decisions that are made, in the deep recesses of our mind, on an emotional level may prompt a new sense of danger about going with your first instinct in certain situations where default emotional decision making isn’t particularly effective in modern life. Thus you can cultivate new instincts—new emotional states—in reaction to given situations.
LikeLike
In terms of Adams point, this would be an unanswerable question. When your cerebral cortex writes a rational (or at least plausible) backstory for your emotional decisions, you will feel like you made a perfectly rational decision. It happens under the surface, and you can examine that process about as effectively as you can face forward and see the inside of your own eyeballs. You want to take a good look inside your eyeballs, it takes time and special tools to make it happen.
You are as aware of it as you are of individual neurons firing.
So, “setting emotions aside” is something you may feel like you did, but isn’t relevant to your decision. You don’ ever set your emotions aside, because it is emotions that give any discrete unit of anything in our lives value. Assessing if something is a good idea or a good deal requires an emotional perception of what “good” is.
Again, people with damaged emotional centers, though rare, are incapable of making decisions because nothing is better or worse, nothing is more appealing or less appealing, nothing has any emotional quality whatsoever. And those people are completely hobbled, because we were built from the ground up–instinctual->reactive(emotional)->cerebral.
What and how well we remember depends on emotional state at the time the memory is formed. Accuracy of the memory and false (or correct) correlations are also dependent on emotional state, and a false correlation formed in a hyper-emotional state can feel more true than all the evidence in front of you in the present moment.
There is a great deal of documentary evidence of this.
Thinking, Fast and Slow:
https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow
You Are Not So Smart:
Also, Brain Rules by John J. Medina.
Also, Psychology and Human Growth, lectures by David W. Martin and available from thegreatcourses.com.
Also, The Brain that Changes Itself by Norman Doidge.
None of these are primarily about the topic of how decisions are emotional and not rational, but it’s in there. You Are Not So Smart is by far the most entertaining and breezy book in the list, and I highly recommend it. Also available as an audiobook.
LikeLike
https://www.wired.com/2014/03/neuroscience-decision-making-explained-30-seconds/
LikeLike
Here’s Adams’ overall argument more concisely stated:
I think simply saying “People are inherently irrational” misses some of his nuance.
LikeLike
jnc:
I think simply saying “People are inherently irrational” misses some of his nuance.
I was addressing what KW said, not trying to characterize Adams.
To be sure Adams' position is more nuanced, but not, I think, nuanced enough. He seems to think that emotion necessarily negates reason when emotion exists. I don't think that is true as a general matter, even if it is true for some people (though experience does suggest to me that it is definitely true for some people.)
LikeLike
I’m attempting to make a non-emotional decision today and go work out for the first time in ages. I’ve been off the grind and, boy, does it show.
However, I’m pretty sure this is a primarily cognitive decision, as every other part of me is trying to find excuses not to do it.
Hopefully, stating it here will make me feel ashamed if I cannot return later today and say I did it, despite the strong emotional desire to rationalize and “plan to totally definitely do it later”.
Thus, creating an emotional situation where the potential shame of not having overcome my compulsion to procrastinate and excuse myself from doing what needs to be done becomes the primary emotional decision making impetus, and not the attractiveness of familiar sloth.
LikeLike