Morning Report: Housing starts fall 6/16/17

Vital Statistics:

Last Change
S&P Futures 2433.8 1.8
Eurostoxx Index 388.2 2.2
Oil (WTI) 44.9 0.4
US dollar index 88.5 -0.1
10 Year Govt Bond Yield 2.17%
Current Coupon Fannie Mae TBA 103.31
Current Coupon Ginnie Mae TBA 104.375
30 Year Fixed Rate Mortgage 3.89

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

Slow news day.

Housing starts fell in May to an annualized rate of 1.09MM. This is a 5.5% drop from April and a 2.4% drop YOY. Building Permits fell as well. Both single-fam and multi-fam segments fell. Builders claim that a lack of skilled labor and available land are causing the problem.

The lack of building is pushing rents higher, and the number of people who spend 50% or more on of their income on housing is at a record level. The issue is a big problem in many metro areas, however outside of those areas affordability is better. There is also a huge difference between MSAs, with places like the Bay Area completely unaffordable compared to the Rust Belt, where prices have yet to recover their bubble peaks.

Amazon is buying Whole Foods..  I guess you’ll soon be able to get your artisanal tortilla chips delivered by drone to your house.

24 Responses

  1. I wonder what impact this would have had on the election had he said it before the polling:

    “London fire: Corbyn calls for empty flats to be requisitioned
    16 June 2017”


  2. Peggy Noonan in this morning’s WSJ:

    What we are living through in America is not only a division but a great estrangement. It is between those who support Donald Trump and those who despise him, between left and right, between the two parties, and even to some degree between the bases of those parties and their leaders in Washington. It is between the religious and those who laugh at Your Make Believe Friend, between cultural progressives and those who wish not to have progressive ways imposed upon them. It is between the coasts and the center, between those in flyover country and those who decide what flyover will watch on television next season. It is between “I accept the court’s decision” and “Bake my cake.” We look down on each other, fear each other, increasingly hate each other.

    Oh, to have a unifying figure, program or party.

    But we don’t, nor is there any immediate prospect. So, as Ben Franklin said, we’ll have to hang together or we’ll surely hang separately. To hang together—to continue as a country—at the very least we have to lower the political temperature. It’s on all of us more than ever to assume good faith, put our views forward with respect, even charity, and refuse to incite.

    We’ve been failing. Here is a reason the failure is so dangerous.

    In the early 1990s Roger Ailes had a talk show on the America’s Talking network and invited me to talk about a concern I’d been writing about, which was old-fashioned even then: violence on TV and in the movies. Grim and graphic images, repeated depictions of murder and beatings, are bad for our kids and our culture, I argued. Depictions of violence unknowingly encourage it.

    But look, Roger said, there’s comedy all over TV and I don’t see people running through the streets breaking into laughter. True, I said, but the problem is that, for a confluence of reasons, our country is increasingly populated by the not fully stable. They aren’t excited by wit, they’re excited by violence—especially unstable young men. They don’t have the built-in barriers and prohibitions that those more firmly planted in the world do. That’s what makes violent images dangerous and destructive. Art is art and censorship is an admission of defeat. Good judgment and a sense of responsibility are the answer.

    That’s what we’re doing now, exciting the unstable—not only with images but with words, and on every platform. It’s all too hot and revved up. This week we had a tragedy. If we don’t cool things down, we’ll have more.

    And was anyone surprised? Tuesday I talked with an old friend, a figure in journalism who’s a pretty cool character, about the political anger all around us. He spoke of “horrible polarization.” He said there’s “too much hate in D.C.” He mentioned “the beheading, the play in the park” and described them as “dog whistles to any nut who wants to take action.”

    “Someone is going to get killed,” he said.

    That was 20 hours before the shootings in Alexandria, Va.

    The gunman did the crime, he is responsible, it’s fatuous to put the blame on anyone or anything else.

    But we all operate within a climate and a culture. The media climate now, in both news and entertainment, is too often of a goading, insinuating resentment, a grinding, agitating antipathy. You don’t need another recitation of the events of just the past month or so. A comic posed with a gruesome bloody facsimile of President Trump’s head. New York’s rightly revered Shakespeare in the Park put on a “Julius Caesar” in which the assassinated leader is made to look like the president. A CNN host—amazingly, of a show on religion—sent out a tweet calling the president a “piece of s—” who is “a stain on the presidency.” An MSNBC anchor wondered, on the air, whether the president wishes to “provoke” a terrorist attack for political gain. Earlier Stephen Colbert, well known as a good man, a gentleman, said of the president, in a rant: “The only thing your mouth is good for is being Vladimir Putin’s c— holster.” Those are but five dots in a larger, darker pointillist painting. You can think of more.

    Too many in the mainstream media—not all, but too many—don’t even bother to fake fairness and lack of bias anymore, which is bad: Even faked balance is better than none.

    Yes, they have reasons. They find Mr. Trump to be a unique danger to the republic, an incipient fascist; they believe it is their patriotic duty to show opposition. They don’t like his policies. A friend suggested recently that they hate him also because he’s in their business, show business. Who is he to be president? He’s not more talented. And yet as soon as his presidency is over he’ll get another reality show.

    And there’s something else. Here I want to note the words spoken by Kathy Griffin, the holder of the severed head. In a tearful news conference she said of the president, “He broke me.” She was roundly mocked for this. Oh, the big bad president’s supporters were mean to you after you held up his bloody effigy. But she was exactly right. He did break her. He robbed her of her sense of restraint and limits, of her judgment. He broke her, but not in the way she thinks, and he is breaking more than her.

    We have been seeing a generation of media figures cratering under the historical pressure of Donald Trump. He really is powerful.

    They’re losing their heads. Now would be a good time to regain them.

    They have been making the whole political scene lower, grubbier. They are showing the young what otherwise estimable adults do under pressure, which is lose their equilibrium, their knowledge of themselves as public figures, as therefore examples—tone setters. They’re paid a lot of money and have famous faces and get the best seat, and the big thing they’re supposed to do in return is not be a slob. Not make it worse.

    By indulging their and their audience’s rage, they spread the rage. They celebrate themselves as brave for this. They stood up to the man, they spoke truth to power. But what courage, really, does that take? Their audiences love it. Their base loves it, their demo loves it, their bosses love it. Their numbers go up. They get a better contract. This isn’t brave.

    If these were only one-offs, they’d hardly be worth comment, but these things build on each other. Rage and sanctimony always spread like a virus, and become stronger with each iteration.

    And it’s no good, no excuse, to say Trump did it first, he lowered the tone, it’s his fault. Your response to his low character is to lower your own character? He talks bad so you do? You let him destabilize you like this? You are making a testimony to his power.

    So many of our media figures need at this point to be reminded: You belong to something. It’s called: us.

    Do your part, take it down some notches, cool it. We have responsibilities to each other.

    Liked by 1 person

    • “They’re paid a lot of money and have famous faces and get the best seat, and the big thing they’re supposed to do in return is not be a slob. Not make it worse.”



  3. Worth a read:

    “If Rod Rosenstein Recuses: What Happens Next?
    By Jack Goldsmith, Benjamin Wittes
    Friday, June 16, 2017, 1:30 PM”


    • George, thanks for the WS link and now I will have to watch the whole 25 min as well.

      I may be one of the hoi polloi who relied on the “edited” version. I would hate that. Really.


      • Mark:

        I may be one of the hoi polloi who relied on the “edited” version. I would hate that. Really.

        I advise that people should not take anything the MSM says at face value. Not just anything regarding Trump, although that would be good advice too, but literally not anything, ever.

        Liked by 1 person

        • When it fits your narrative, whatever that is, be extra-suspicious. I’ve grown to suspect our concept of journalism is impossible to execute in the real world, but people don’t intuit that, so believe reportage . . . except with stories they are intimately involved, because then they see how much the press gets wrong, but assume that’s something unique to this particular incident and not a global flaw in our concept of journalism/reporting.


  4. Durbin collided with assasin!

    So did Duckworth

    Top Senate Democrats Collude to Assasinate Republicans!


  5. Mark, I’d be interested in your thoughts: How can a predsident be guilty of obstruction of justice by exercising his constitutional powers?

    So what is the possible “obstruction of justice” here? That Trump asked Comey to go easy on Michael Flynn? Let’s take the worst possible case: suppose that Trump directly ordered Comey as follows: “I order you to drop the investigation of Flynn right now and to transfer everyone working on it to other tasks.” Can that possibly be an obstruction of justice, given that the prosecutorial discretion function of the government belongs to the President?

    Those arguing that direct exercise by the President of the executive’s prosecutorial discretion function can theoretically constitute “obstruction of justice” uniformly cite supposed “rules” or “protocols” of the Justice Department that set up a kind of a wall to insulate the prosecutorial function from political influence. There’s certainly nothing in the Constitution about this, nor in the laws that I can find, nor even in regulations adopted via the Administrative Procedure Act. Looking around to try to find the basis for this extra-constitutional principle, I find this February 17 article by Jane Chong at Lawfare. Chong traces the current protocol for Justice Department independence from presidential interference to a 2009 memo written by then AG Eric Holder. Hey, current AG Sessions hasn’t officially revoked the memo yet! And so now a memo of the prior AG is to be the basis for a criminal investigation of the President of the United States?


    • Assume for the sake of argument that a private individual meddled with an FBI investigation. Several statutory crimes might be implicated. False swearing, perjury, obstruction of justice, and more. These statutes apply to the POTUS, as well, in theory, because he is a citizen subject to American and state law. After all, the POTUS cannot make law and is subject to Congress and even state leges just as you are.

      But procedurally it is different for a POTUS, for a couple of reasons, one of which is cited by the article.

      Generally if the FBI finds evidence of a statutory crime against a President it is within the discretion of Congress to Impeach. That the POTUS can cripple the normal criminal sanctions while he is in office is probably true, by reason of executive power.

      We also have abuse of power and abuse of discretion statutes that are patterned to stop self dealing or selective harrassment by governing, prosecutorial, and police officials. Again, these apply to the POTUS simply because he is a governing official. Again, it is likely that no Indictment would lie while the President was in office. Impeachment, or 25th A remedies, might be the only sanctions available.

      Let’s say that Ivanka murders Kushner in plain view on the Capitol steps, and DJT pardons her saying Kushner was a bad man who deserved what he got, and a stinking Jew to boot. The pardon sticks, and no one could challenge it. A jury would likely find that the POTUS abused his executive power and his discretion for personal reasons. But it could not get to a jury, while Trump was President, IMHO. Suppose Trump murdered Melania on the WH lawn in plain view and announced that she deserved to die and he had saved the nation the expense of investigation, indictment, trial, conviction, and imprisonment. I don’t think the Secret Service lets the DC Police near the guy and he doesn’t get prosecuted until after he is out of office. He could be impeached, of course.

      Suppose the President pardons himself. The Constitution doesn’t say he can’t, and he might do it. Would that pardon stand up? My gut says no, but I would have to pour through a bunch of Federalist papers before I had a legal opinion, one way or another.

      I will suggest this: if the practice of pardon was then understood to include pardoning one’s self and thus putting one’s self permanently beyond the criminal law then every state constitution as well as the US Constitution will have to be amended, because no one wants a President or a Governor to have that power. For that reason alone, courts would lean toward scoffing at the notion that “pardon” as a legal construct ever included self – pardon, unless that conclusion is unavoidable.

      In the specific case of DJT I suspect that if Mueller finds evidence of criminal statutory violations by the POTUS he will first take it to the appropriate Congressional committees, but probably never to a Grand Jury.

      I also wonder if the FBI would seek to have US Attorneys in various Districts indict the campaign crew members or family members while DJT was in office. Why would Flynn turn on DJT [assuming there were something for him to offer] if DJT has the hole card of pardoning Flynn for any federal crime? Same for Manafort, or Kushner, etc.

      One more bit of speculation about uncharted waters. The power of a Presidential pardon only goes to federal crimes.
      If Mueller or the FBI find evidence of state criminal violations they will be quick to use them to pressure the peripheral players. A NY crime by Kushner or a VA crime by Flynn would be beyond Presidential meddling.

      These are still early times. A president who kept his powder dry would be able to do his job while this swirled about in near silence, but as DJT is preoccupied with his own personal stuff to the point of tweeting about it regularly he will keep stepping into piles of crap.


      • Thanks Mark. But my question isn’t so much whether it is possible to imagine some hypothetical scenario in which a president may be guilty of obstruction of justice, or how he might be held accountable. What I wonder is whether, even if we assume the absolute worst framing on the interaction that has produced the claims/suspicions of obstruction in the first place, i.e. we assume he literally ordered Comey to drop the Flynn investigation, is it possible to legitimately construe that as an obstruction of justice at all, given the president’s constitutional authority as the head of the Executive branch?

        Liked by 1 person

        • Can that be adjudicated, or is it ultimately congress that has to make that determination?


        • Scott: Yes.

          The Congress would do the construing. It requires an implicit or tacit assumption of abuse of discretion. The point is that theoretically all officers of government can be held accountable for abusing their discretion and by doing so, in the case of a firing of a person investigating the official, obstructing justice. It is simply that the only body that can hold the POTUS accountable in a criminal sense is the body that created the law – Congress.

          On the civil side there are also instances where Presidents have operated within their constitutional authority but run afoul of clear statutory limits, set to limit abuse. Then, at the request of a state, or of a house of Congress, a federal court might intervene. BHO’s order to use discretion not to deport a whole category of undocs was within the facial bounds of the executive function, but flatly violated the Administrative Procedure Act, if you recall, which is designed to minimize arbitrary and capricious civil decisions under the executive power.

          Kev – on the civil side, given a valid statute that limits the manner of imposing regulation, a Court can adjudicate if the complainant has standing. On the criminal side, if a statute has been violated vy the POTUS, the evidence must be presented to Congress. No one has ever tried to go to a Grand Jury with it. I don’t think it would work if it were tried.


        • Mark:

          It is simply that the only body that can hold the POTUS accountable is the body that created the law – Congress.

          But abuse of discretion is a political, not a criminal matter, no? The fact that the president could only be held accountable by congress via impeachment suggests to me that it isn’t a criminal matter. As an independent counsel, Mueller has been tasked with investigating crimes. The article I linked seemed to be arguing, convincingly to me, that even assuming the worst about Trump’s interaction with Comey, it simply does not constitute a crime. Trump has the legal authority to use his discretion in such matters. Even if congress subsequently deems it to be an abuse of his discretion, it is not a actual crime. And so, it seems to me, there is no potential crime for Mueller to be investigating in the first place.

          Liked by 1 person

        • 18-1505 USC in part says:

          Whoever corruptly, or by threats or force, or by any threatening letter or communication influences, obstructs, or impedes or endeavors to influence, obstruct, or impede the due and proper administration of the law under which any pending proceeding is being had before any department or agency of the United States, or the due and proper exercise of the power of inquiry under which any inquiry or investigation is being had by either House, or any committee of either House or any joint committee of the Congress—

          Shall be fined under this title, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both.

          Was Comey fired to thwart an investigation? If so, would a finder of fact decide that was “corrupt”? It could have been to thwart the investigation into Flynn, pending in the Northern District of VA, or the Congressional investigations of the campaign. Either would do.

          In a criminal proceeding against an ordinary human, the finding would have to be that the firing was “corrupt”. In an Impeachment, those words could be used, or abuse of discretion, because as you wrote, Impeachment is a legislative rather than a judicial remedy.

          If he were named as an unindicted co-conspirator with Flynn in NoVa, probably 18-1505 would be cited.

          There are probably other ways, too, but this is the one they call the “omnibus”.

          Liked by 1 person

  6. How the antifa left became exactly what they claim to be fighting…

    View at

    Liked by 1 person

  7. I picked out a shiny new car yesterday. The old one was 16, so it was about time. . .

    I’d forgotten how much fun it is to drive a sporty little car instead of a small SUV!

    Liked by 1 person

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