Morning Report: Housing starts nosedive 12/16/16

Posted on December 16, 2016 by Brent Nyitray

Vital Statistics:

Last Change
S&P Futures 2262.0 3.5
Eurostoxx Index 359.6 0.8
Oil (WTI) 51.1 0.2
US dollar index 93.1 -0.1
10 Year Govt Bond Yield 2.58%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 4.15

Stocks are up this morning on no real news. Bonds and MBS are flat.

Housing starts fell 19% in November to an annualized rate of 1.09 million, which was way below estimates. Both single family and multi-fam fell, but multi bore the brunt of it. This is 7% lower than a year ago. Building Permits came in at 1.2 million, which was also below forecasts. Housing starts can be volatile and I wouldn’t be surprised to see this number revised upward.

Despite the low housing starts number, homebuilder sentiment is at highs not seen since the bubble years. This increase was probably due to a post-election bounce, however builders remain cautious and starts are way below historical averages. Perhaps a change in the regulatory environment will change that. “This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years.”

Donald Trump is close to choosing Larry Kudlow for the role of Chief Economist. The focus for economic growth will move from trying to improve demand to trying to improve productivity. Kudlow is a veteran of the Reagan Administration and is a firm believer in supply side economics. He has been historically a very vocal free trader, but will have to soften that approach in this administration.

Filed under: Economy, Homebuilding, Morning Report |

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58 Responses

  1. Michigoose, on December 16, 2016 at 9:25 am said:

    Score!

    Liked by 1 person

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  2. Kevin S. Willis, on December 16, 2016 at 9:53 am said:

    Sort of what’s wrong with contemporary college environments, identity politics, millennial, victimology, and a number of other things.

    First of all, we get a list of life goals she’s accomplished yet complains about the education that helped get her there. She uses the phrase “learning while black”. She complains about impostor syndrome as if that’s something being done to her, rather than something she is doing to herself.

    And she complains bitterly about having been instructed on the correct way to pronounce “ask”—that is “asking” instead of “axing” . . . as if this were unreasonable and bad. But she makes sure to get the pronunciation of “Chile” right. Presumably, she speaks some Spanish? Was she oppressed by teachers attempting to get her to pronounce it correctly?

    Ugh. What I hate most about this is how we are normalizing (yes, normalizing) and have “normalized” so much perpetual victimhood. Everybody has obstacles and, what’s more, a lot of times obstacles are what you use to achieve things. If you don’t overcome any obstacles, it’s not a goal, it’s not an achievement, it’s just a state-change.

    Millenials are turning me into the proverbial grumpy old man. “This generation is gonna ruin everything!”

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    • Let the mutherfuker burn!, on December 16, 2016 at 10:27 am said:

      Meh, they’ll hit the buzzsaw of having to keep oneself fed and housed. It’s the great equalizer.

      Every generation gets written off and only Baby Boomers deserved it.

      Liked by 1 person

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      • Kevin S. Willis, on December 16, 2016 at 12:18 pm said:

        The Clinton campaign spent too much time appealing to what he calls “identity liberalism.”

        The Clinton campaign was hardly the most egregious actor there. It’s the “supporters”, the pundits, the entertainment figures who feel we should listen to them . . . most of them time, I got the sense that Clinton was just careful not to irritate the identity politics folks (or have a Sistah Souljah moment), but the folks around her, the pundits, much of the MSM, the fellow travelers and meme-makers were generally extremely identity politics oriented, and weren’t persuasive to, I think, voters who weren’t always already going to vote for Clinton anyway. And that includes some BernieBros.

        In a lot of ways, the dedicated Alt-Left, the Neo-Utopians who naturally saw her as “their” candidate (and whom no one would ever demand she repudiate, so of course she didn’t; a voter is a voter) remind me a lot of the Richard Spencer”Hail Trump” thing, and being a mod Nazi with irony. These are not people who do the candidate they ostensibly support any favors.

        I don’t think the problem was Clinton’s identity liberalism as much as it was the deluge of identity politics coming from many of her supporters. It starts to alienate everyone whose not part of “the group”.

        But, of course, those folks think the problem was the exact opposite: not enough identity politics!

        …

        The most dismissive rejoinder was from Katherine Franke, a law professor at Columbia University, who compared Lilla to David Duke and charged him with “underwriting the whitening of American nationalism, and the re-centering of white lives as the lives that matter most in the U.S.” If nothing else, Franke’s screed did stumble into a relevant point: America was founded on a system of white supremacy, and contemporary liberalism is a necessary corrective to this.

        Sort of makes the point. This was not something Clinton would have said on the campaign trail, for example. But it was something you heard a lot from her ostensible supporters and advocates.

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      • Kevin S. Willis, on December 16, 2016 at 12:25 pm said:

        To begin with, identity can be used to mobilize people for political action — that’s for sure. But political action is something else. I certainly agree that someone’s identity may affect their political views. Again, though, democratic politics is about persuasion. It’s not about self-expression.

        However you come to your values or positions, you become political the moment you enter the arena trying to persuade other people of your values. If you have a certain value and you attach to that a whole picture of your identity, and then ask the other person not only to accept your position but to accept your account of your identity, you’re setting the bar very high for political agreement.

        Dude is dead on. That’s why identity politics is horrible for politics. And lead directly to where we are now. Everything anyone complains about politically can be traced primarily to identify politics, IMHO.

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        • jnc4p, on December 16, 2016 at 12:51 pm said:

          The most self destructive feature of the left these days is viewing the act of persuading someone who doesn’t already agree with them as selling out their principles.

          Liked by 1 person

        • Kevin S. Willis, on December 16, 2016 at 2:40 pm said:

          “The most self destructive feature of the left these days is viewing the act of persuading someone who doesn’t already agree with them as selling out their principles.”

          That’s how I see it —and I think it’s self-destructive anywhere; you see it among extremist in any group, to some extent, and it becomes a shortcut when all the people you need are already convinced . . . say, in every urban area in California, or in a Tea Party primary in rural Texas.

          The question becomes one of judgement. Can you really achieve your ostensible political goals through catharsis and self-expression alone? It’s one thing to scream about the Devil in church. Everybody agrees, and you’re not convincing anybody to vote for anything.

          In politics, you’ve got to keep your base happy (and not turn them off). You’ve got to convince independents are those turned-off from the other group to come to your side. You’ve got to sell the product.

          Thus, why this Pepsi campaign failed:

          “You’re an idiot and racist if you drink Coke. If you drink Coke, we don’t want you to drink Pepsi. Ever. We don’t want your filthy, racist, idiot lips to touch a bottle of our fine and enlightened beverage. You’re all a bunch of rotten bastards. And you Pepsi drinkers? Don’t think we aren’t watching you. One wrong move and out you go to drink Coke with the rest of the scum of the earth.”

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        • Brent Nyitray, on December 17, 2016 at 9:43 am said:

          Politics is ultimately a sales business. So many don’t see it that way

          Liked by 1 person

        • ScottC, on December 17, 2016 at 10:38 am said:

          Brent:

          Politics is ultimately a sales business. So many don’t see it that way.

          One of the problems, I think, is that politics and governing are not the same thing, and most people care more about governing than about politicking. (Certainly I do.) And they convince themselves they are voting for the person who will be the best governor, when actually they are voting for the person who is the best salesman.

          Liked by 1 person

        • markinaustin, on December 18, 2016 at 8:45 am said:

          One of the problems, I think, is that politics and governing are not the same thing

          Yep. Very apparent in this cycle.

          Suppose the electors actually come to an agreement to vote for WMR [38 Rs + all the Ds]. Do you think WMR would accept the Presidency?

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        • ScottC, on December 18, 2016 at 9:02 am said:

          Mark:

          Yep. Very apparent in this cycle.

          Given that Trump hasn’t actually started governing yet, I’m not sure that is a fair assessment. But it was certainly apparent to me after the last two cycles.

          Do you think WMR would accept the Presidency?

          After seeing Romney praise Trump following their post-election dinner, I’m done predicting what Romney might do. But I will say that I think he’d be crazy to accept it under such circumstances.

          Like

  3. jnc4p, on December 16, 2016 at 12:55 pm said:

    “Since his election, Donald Trump has done three peculiar things. He has refused the daily intelligence briefings traditionally given to the president-elect. He has dismissed intelligence suggesting that Russian hackers played a role in the election. And he has delivered angry speeches against Americans who opposed him. These three behaviors are related. In Trump’s eyes, the enemy isn’t Russia. It’s the part of America that opposes him.”

    http://www.slate.com/articles/news_and_politics/politics/2016/12/the_only_enemies_donald_trump_sees_are_his_fellow_americans.html

    And Trump’s not wrong about that either.

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  4. Let the mutherfuker burn!, on December 16, 2016 at 2:07 pm said:

    Has Greg lost his fucking mind?

    Does anybosy here think Trump will “shred the safety net”?

    I fucking wish. Does he actually believe what he writes?

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    • Kevin S. Willis, on December 16, 2016 at 2:26 pm said:

      “Does he actually believe what he writes?”

      Do evangelicals believe Jesus died for their sins?

      When it’s a religious belief, you don’t question it. You don’t apply standards of logic. You don’t say, “That’s just seems too evil, even for the Devil!”

      You roll with it. You also don’t want your fellow partitioners to question the sincerity of your faith. So there’s that.

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    • Brent Nyitray, on December 16, 2016 at 2:31 pm said:

      shredding the safety net = growing it at a pace lower than liberals want

      Like

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    • Kevin S. Willis, on December 16, 2016 at 2:32 pm said:

      My personal bugaboo is Bush’s plan to “privatize” social security. There’s no way you can look on what was known (admittedly, there were some unknowns, because it never came to fruition) and conclude that it was the privatization of Social Security, at all or that it wouldn’t likely be a net positive for the entire working population of the US going forward.

      The side of calm, rational objectivity—the side that only cares about data—cannot look at what was known, and look at the year-over-year performance of the market indexes—and characterize it the way that they do. They characterize the defeat of Bush’s SS plan as some sort of great victory, yet basically what they were saving us all from was getting anywhere from just as much money as we would have, to getting a whole lot more money than we’re going to.

      Given that I cannot find a liberal—even a nice, sincere, courteous one—that can actually see the Bush plan, and the historical returns of investing in index funds over a period of decades via dollar-cost-averaging—accurately, one decides that most people at a certain level of partisan and ideological devotion are more religious that fact-based (even if claiming to be fact-based is core to their self-image), thus it’s all religious in nature.

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      • jnc4p, on December 16, 2016 at 2:41 pm said:

        Any plan that produces winners and losers (or more accurately allows people to make there own decisions) is anathema for Democrats as it could lead to inequality.

        Everyone must have the same shitty returns and no actual claim to the proceeds because of solidarity.

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        • Let the mutherfuker burn!, on December 16, 2016 at 2:47 pm said:

          Hence the problem, all plans produce winners and losers. To pretend otherwise is to be…

          Like

        • Brent Nyitray, on December 16, 2016 at 2:52 pm said:

          The shitty returns were achieved over the course of the mother of all bond bull markets. Now that we are starting a bond bear market, they will be even worse.

          Like

        • Kevin S. Willis, on December 16, 2016 at 2:53 pm said:

          Well, people who opted for the full 15% or whatever private investment would do better than everybody else, so I guess that would make them count as winners. But I think they really believe, with no evidence, that the Bush plan was to put all your Social Security randomly in the stock market so then it would all be permanently lost after the first market correction.

          Like

      • ScottC, on December 16, 2016 at 4:22 pm said:

        KW:

        Given that I cannot find a liberal—even a nice, sincere, courteous one—that can actually see the Bush plan, and the historical returns of investing in index funds over a period of decades via dollar-cost-averaging—accurately, one decides that most people…

        As ever, I don’t think it makes sense to generalize from liberals to everyone.

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    • jnc4p, on December 16, 2016 at 2:39 pm said:

      Trump beat the Never Trumpers before he beat the Democrats.

      Mitt Romney going to Trump tower to kneel before Zod was the surrender ceremony.

      Liked by 1 person

      Reply
  5. jnc4p, on December 16, 2016 at 2:37 pm said:

    “Will Facebook’s Fake News Warning Become a Badge of Honor?

    Some users might see the site’s alerts as evidence that a news source is more trustworthy.
    Kaveh Waddell 4:30 AM ET ”

    https://www.theatlantic.com/technology/archive/2016/12/will-facebooks-fake-news-warning-become-a-badge-of-honor/510863/

    Yep.

    Liked by 1 person

    Reply
  6. jnc4p, on December 16, 2016 at 2:58 pm said:

    I don’t necessarily see this as a problem:

    “Pax Americana Is Over

    The United States will be agnostic on human rights, freedom and democracy.

    Roger Cohen
    DEC. 16, 2016
    …
    Trump is not interested in the rules-based international order the United States has spent the last seven decades building and defending. His foreign policy will be transactional. If it profits America, fine. If not, forget about it. Trump’s United States will be agnostic on human rights, freedom and democracy. America, suspending moral judgment, will behave a lot more like China on the world stage.”

    http://www.nytimes.com/2016/12/16/opinion/trumps-chinese-foreign-policy.html

    Like

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    • jnc4p, on December 16, 2016 at 3:09 pm said:

      On a related note:

      “If Obama wants credit for not getting us into another war, the credit is his. If he wants credit for not being guilty of “overreach,” the credit is his. If he wants credit for conceiving of every obstacle and impediment to American action in every corner of the globe, the credit is his. But it is a shameful and incontrovertible fact of our history that during the past eight years the values of rescue, assistance, protection, humanitarianism and democracy have been demoted in our foreign policy and in many instances banished altogether. The ruins of the finest traditions of American internationalism, of American leadership in a darkening world, may be found in the ruins of Aleppo. Our ostentatious passivity is a primary cause of that darkening. When they go low, we go home. The Obama legacy in foreign policy is vacuum-creation, which his addled America-First successor will happily ratify. Aleppo was not destroyed by the Syrian army. It was destroyed by a savage coalition led and protected by Russia. While they massacred innocent men, women and children, we anxiously pondered scenarios of “deconfliction.”

      https://www.washingtonpost.com/opinions/aleppos-fall-is-obamas-failure/2016/12/15/5af72640-c30f-11e6-9a51-cd56ea1c2bb7_story.html

      Liked by 1 person

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    • ScottC, on December 16, 2016 at 5:12 pm said:

      Brent:

      He’s baaack

      He’s completely unhinged. And I mean that not in a “wow, that was a bit over-the-top so let’s mock him” way, but in a quite literal “I genuinely think he may be insane and a danger to himself and others” way.

      Liked by 1 person

      Reply
  8. jnc4p, on December 16, 2016 at 3:28 pm said:

    One last time for “Not My Fault ™”

    “Obama: I handled the Russian hacks properly. It’s the media that didn’t.
    Updated by Andrew Prokop Dec 16, 2016, 4:10pm EST”

    http://www.vox.com/policy-and-politics/2016/12/16/13988114/obama-russia-hacking-election

    “So I do think it’s worth us reflecting how it is that a presidential election of such importance, of such moment, with so many big issues at stake and such a contrast between the candidates, came to be dominated by a bunch of these leaks.””

    That’s easy. The contrast between what they said publicly and what the leaked documents revealed proved that they were lying.

    Liked by 1 person

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  9. Let the mutherfuker burn!, on December 16, 2016 at 7:11 pm said:

    Why would they do this?

    https://www.nytimes.com/subscriptions/Multiproduct/lp8XKUR.html?mph=cr552bp&adxc=285078&adxa=415536&page=myaccount.nytimes.com/mobile/wall&pos=Gateway&campaignId=6JHLL

    (Blinks)

    “Companies have figured out that if they outsource their recruiting and hiring, and what’s often considered to be the messy parts of their H.R. function, that they can then absolve themselves of any liability,” Ms. Ruckelshaus said. That hits low-wage minority workers the hardest because of “entrenched and persistent discrimination,” she said.

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  10. ScottC, on December 17, 2016 at 5:23 pm said:

    A New Republic roundtable of progressives on Obama’s term in office. Worth reading.

    https://newrepublic.com/article/138951/beyond-hope-barack-obama-legacy-age-trump

    You know it’s bad when Andrew Sullivan is the voice of reason. The utter inability of people on the left to question their premises is quite astounding.

    Liked by 1 person

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    • Brent Nyitray, on December 18, 2016 at 1:40 pm said:

      Hillary lost because she is an old woman, but Elizabeth Warren would have had a 50 state landslide…

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      • ScottC, on December 18, 2016 at 1:53 pm said:

        Brent:

        Hillary lost because she is an old woman, but Elizabeth Warren would have had a 50 state landslide…

        Like I said, you know you are in for a treat when Andrew Sullivan is the most rationale person in the room.

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    • ScottC, on December 18, 2016 at 1:51 pm said:

      BTW…something that came out in that NR roundtable that I was totally unaware of. First, that Sullivan is HIV positive, and also that he is not yet an American citizen. He got all choked up when talking about how he was finally going to become an American citizen as a result of Obama helping to eliminate the ban on those who are HIV positive becoming naturalized.

      Does anyone else find it totally nuts that in the age of ACA we don’t ban people with highly expensive health issues from becoming citizens? In fact, early in the NR discussion, Sullivan praises his own existing Obamacare coverage. Are you f-ing kidding me? We’re using taxpayer money to fund subsidized insurance for foreigners with HIV? What kind of insanity is this?

      No wonder Sullivan’s attitude towards Obama evokes memories of Nina Burleigh and Bill Clinton.

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  13. ScottC, on December 18, 2016 at 6:48 pm said:

    Can someone explain to me how it can be that Trumps name comes up in this article before Obamas does?

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  14. ScottC, on December 19, 2016 at 8:32 am said:

    Did you guys see the video (below) of Joe Mixon (Oklahoma football player) punching a woman? It happened last year and Mixon was suspended from the team for a year, but reinstated this year. The video just got released, which has generated criticism of Oklahoma for just suspending him for a year rather than kicking him out of school entirely. The video is pretty horrific. He puts her down with one massive right to the face.

    But after watching the video, I have to ask: If a man had done the same thing to Mixon that the woman does, would this be even remotely controversial? In these days of gender equality and equal treatment for women, should a woman be able to hit a man with impunity under the expectation that he won’t, and shouldn’t be legally able to, hit back?

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