Morning Report: Existing Home Sales rise 6/21/17

Vital Statistics:

Last Change
S&P Futures 2436.5 -1.0
Eurostoxx Index 387.7 -1.5
Oil (WTI) 43.3 -0.9
US dollar index 88.9 -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 3.92

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

Mortgage applications rose 0.6% last week as purchases fell 1% and refis rose 2%. The average 30 year fixed rate mortgage was flat at 4.13%. The share of refis rose to 46.6% from 45.4%.

Existing home sales rose 1.1% MOM and 2.7% YOY, according to NAR. Lawrence Yun, NAR chief economist, says sales activity expanded in May as more buyers overcame the increasingly challenging market conditions prevalent in many areas. “The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” he said. “Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”

Chicago FRB President Charles Evans said the Fed can wait until December to hike rates, and that it could begin to start shrinking its balance sheet earlier than that. Note the Fed Funds futures are predicting the Fed will stand pat at the July and September FOMC meetings. The median house price was up 5.8% to $252,800. Unsold inventory is at 4.2 months’ worth and days on market fell to 27 days. The first time homebuyer accounted for 33% of sales, down a percentage point from April but up 3 from a year ago.

On this day, 10 years ago the financial crisis began as creditors began to auction off collateral at two Bear Stearns hedge funds.

Is the high price of housing in the Bay Area bringing back the 19th century concept of the company town? Google has been buying apartments for temporary housing for its employees. Interesting issue, where builders won’t take the risk on building new housing, but companies need the housing for their employees.

The government is looking to tackle GSE reform again, Johnson – Crapo from 2014 was simply too complicated, and affordable housing types were against it as well. Sen Mike Warner said: “We have consensus on the importance of the 30-year loan, we have consensus that there needs to be more capital on the front end so in the event of a catastrophic event where the government guarantee kicks in, you’ll have private capital at risk. We’re also thinking of using Ginnie Mae as the wrap. And we’re trying to maintain an active TBA market so there is liquidity and the ability of borrowers to lock in their mortgage rates.” Warner went on to say that GSE reform could happen before financial reform as there is more bipartisan consensus on that.

24 Responses

  1. I wonder if the NYT / WaPo / CNN are already writing stories about how DJT’s FEMA screwed up the response to Tropical Storm Cindy…

    Liked by 1 person

  2. The footage of the Philando Castile shooting is graphic and terrifying.

    2nd Amendment rights advocates always say that announcing a legal weapon at a traffic is stop is the correct procedure. So what went wrong here?

    Was this video used as evidence and if not, why not?

    Finally, what should have happened but didn’t?

    Liked by 1 person

    • Obviously, confiscating all guns is the answer.

      Or, we could eliminate a lot of laws and fundamentally reduce police forces across the land.

      Option two seems the easier and more efficient course.

      Liked by 1 person

    • “2nd Amendment rights advocates always say that announcing a legal weapon at a traffic is stop is the correct procedure.”

      I’ve heard that passing your gun license with your real license is actually the better idea, or your concealed carry permit. Announcing you have a gun, even if you think you sound calm, may not be the best strategy when pulled over by a cop. They may misunderstand your meaning.

      My strategy is not to own a gun. If I did, I probably wouldn’t keep it in my car.

      What should have happened is the officer probably either shouldn’t have been on duty, or shouldn’t have been an active duty officer. A large number of police shootings seem to involve a “fog of war”, stress-of-the-moment process of hallucinating a danger that isn’t there–because, of course, if they are wrong they are likely to be dead. And there are videos of cops getting shot and killed at routine traffic stops. And if the switch flips in someone’s head and they think that’s about to be them, they pull the gun and they shoot the other guy.

      Until there is some safe and acceptable way to pacify people in order to view the situation at leisure, I’m not sure there is a good answer.


      • The cop that did the shooting claimed that he was in fear for his life because he thought they were smoking dope in front of a kid and if they thought so little of the kid’s safety re second hand smoke, they’d think nothing of shooting a cop.

        Dude’s a freak, but if we want to have so many laws that need to be enforced, then there will be a risk at every encounter. Also, the more cops there are, then the more bad cops there are. We’re the third most populous country in the world, bad things are going to happen. It’s fascinating to think that if what the lefties think is true, that Each and Every Gun is a Unique and Certain Threat, we’re remarkably safe consider there are what, 200 million guns in circulation?

        Liked by 1 person

    • yello:

      So what went wrong here?

      Based on what I have read, what went wrong was that, after announcing he had a firearm, he did not keep his hands still and visible, and was reaching for something. I believe he was reaching for his license to carry, not for the gun itself, but the policeman panicked and opened fire.

      Finally, what should have happened but didn’t?

      If it were me, I would have kept my hands on the steering wheel at all times and asked the policeman if he wanted to see my license to carry, only moving my hands on his say so.


  3. What’s the current level of butthurt at the PL?


    • The PL is Happy Gilmore in this example.

      Bob Barker: [Bob grabs Happy’s throat, opens his eyes with a menacing look, stands up, punches Happy in the gut twice, and once in the face before Happy falls down again] I think you’ve had enough.
      [Starts to walk away, but notices Happy start to stand up again]
      Bob Barker: No?
      [Kicks Happy in the face]
      Bob Barker: [while walking away] *Now* you’ve had enough… bitch.


  4. Heh.

    Liked by 1 person

    • $23 million buys a lot . well, anything.
      or a vanity project of a congressional race.

      Liked by 1 person

    • They hoped to send one message to Washington; instead, they may have sent the opposite one—that the mass of American voters are in no hurry to deliver a rebuke to the chaos in Washington, and that Republican representatives still have wide leeway to pursue their policy objectives on issues like health care without losing or disheartening their base.

      As long as they believe their alternative-reality narrative about the Trump admin is playing to anybody but the base, they are going to keep getting disappointed.


    • From Ace: “Cashew-faced Queen of Conspiracies Rachel Maddow is stealing a play from Milli Vanilli and Blam[ing It] On the Rain — she’s deep in the fever swamps exploring the “partisan implications” of some light rain in GA-06 yesterday.”

      I mean, it’s like they all collectively want to keep losing.


  5. Hilarious!

    The newsroom was incredulous. Some wondered if the Guardian expected sources to feel secure communicating with reporters inside a Kushner building.

    Jay Rosen was unavailable for comment.


    • McWing:

      Some former staffers spoke on the condition of anonymity for this story because they signed nondisparagement agreements when leaving the Guardian, while current staffers were granted anonymity because they are not authorized to speak about the company.

      Gotta love it when the media gets hoist by its own corrupt petard.

      Liked by 1 person

  6. “It tells me that despite all the wonderful people I met in this campaign, there are still a lot of people who support the meanness and ignorance and tearing each other apart” that she saw Trump as representing.

    Why won’t you vote for us you’d stupid, toothless, inbred, retarded, sister-fucking hicks?

    “As darkness has crept across this planet,” he assured them, they “have provided a beacon of hope for people in Georgia and for people around the world.”

    Now you know what 2009-2017 felt like, hung stud.


    • Not sure they see any analogy. They elected a great guy and a pro, and now the rubes have elected a corrupt dimwit evil genius moron. And keep electing kleptocratic politicians to support him. Totally different.

      In any case, hardcore partisans occasionally feel buoyed after victories but then immediately get back to complaining again. Either their pols or letting them down or the other side is confounding them with their evil tricks, or both. Most of them constantly feel like they are losing.

      This point seems relevant:

      7000 donations for California vs. 800 from Georgia. The objection here is that, despite the money spent, California did not get to decide who represented Georgia. Or so it would seem.


  7. Good piece:

    “What’s Wrong With the Democrats?

    If the party cares about winning, it needs to learn how to appeal to the white working class.
    Franklin Foer
    July/August 2017 Issue ”


    • And anyone could see that investing such grave hopes in the person of Hillary Clinton—who had lost the party’s nomination to a little-known senator in 2008; who had struggled to win it against a little-known socialist eight years later—was particularly risky.

      Struggle is the new “stole”. Apparently.

      But liberals’ fears were softened in 2016 by a widely shared belief: that the candidacy of Donald Trump would shatter the Republican Party, at least in the form in which we had long known it.

      I always thought that was idiocy. Trump was a few stupid tweets and a few dumbass sound bites away from winning in a landslide. He was his own worst enemy, and the only reason he didn’t win the popular majority. The Democratic opposition to him barely counted. They couldn’t even get their own voters to the polls to vote against him.

      After a season of Trump’s destruction, the party would lie in rubble.

      Maybe I should be a political consultant. I’ve been saying for almost 30 years now that it’s idiocy to rely on that prediction, that’s it’s masturbatory fantasizing and doesn’t reflect what really happens. And I almost understand the old guard believing it: the Democrats owned the house for 40 years. They don’t want to believe it was a fluke, or account for the large number of conservative Democrats (and old guard Democrat partisans in the south) that made that possible. But the other party is almost never doomed forever, and is unlikely to ever spend 40 years wandering in the wilderness. And during that 40 years we got Reagan and H.W. Bush.

      Pinning your hopes on the other guy (or the other party) self-destructing is bad politics. It might happen, at least in a single election or two, but it’s not a vote-getting strategy.

      Resistance has given the Democrats the illusion of unity

      And boy, do most of them believe in that illusion.

      Hillary Clinton always had trouble getting right with the zeitgeist, and her aides worried about that flaw.

      No doubt, but I’m guessing she wasn’t the one who came up with “I’m With Her” as the slogan to go against “Make America Great Again”. The idiocy of that just continues to amaze me.

      After she lost New Hampshire in February, she began traveling with the grieving mothers of Trayvon Martin, Eric Garner, and other African American casualties of violence. Criminal-justice issues became an elevated feature of her standard pitch.

      Just amazingly tone-deaf. I get the moral objection, but for someone who wanted to win the election in America . . . if she had been running against a charismatic and in-control Republican, she would have lost bigly. Super bigly.

      By the spring of 2016, one top Clinton adviser explained to me, the campaign’s own polling showed that white voters without a college degree despised Clinton. The extent of their loathing was surprising—she polled far worse with them than Obama ever had, especially in states like Ohio and Iowa.

      … because uneducated whites are all redneck, racist bigots. So it was surprising they liked Obama more than Hillary. Presumably, it’s because they are even more sexist than they are racist. Only explanation I can see.

      With hindsight, it’s possible to see the risks of her strategy. Her campaign theorized that dentists, accountants, and middle managers needed to fully understand how Donald Trump surrounded himself with bigots and anti-Semites.

      I don’t see how anyone could possibly imagine that this would help or even be necessary in the post-Limbaugh, post-Fox News era. Partisans would already “know” and post it all over Facebook. Fence-sitters would be more likely to ask why HRC was trying to use guilt-by-association. Most folks on the right would have looked at it as more destructive identity politics. This was a topic not worth touching as a campaign message.

      Clinton boosted that cause when she told donors in September, “To just be grossly generalistic, you could put half of Trump’s supporters into what I call the ‘basket of deplorables.’ ” It was meant to be a sotto voce comment, but that’s never how it works, as Mitt Romney could confirm.

      Or Obama, with his bitter-clingers comment. God, guns, and gays. This is *never* a good idea. Trump might get away with some of that, because he’s Trump. But in general, it’s an awful idea for a national candidate, and they should never, ever do it.

      which also highlighted the historic nature of her candidacy, yet made no effort to appeal to either the self-interest or the patriotism of white men.

      My problem with this article is this: she made no effort to appeal to the self-interest or patriotism of anybody. The Democrats don’t need to campaign to white workers, they need to campaign to everybody . . . and their self-interest. Jobs and security. Ask about race or other issues? Well, I think this, but you know what, everybody needs a good job. Bernie was a socialist but he knew how to appeal to people’s self-interest.

      They considered Trump’s disreputable character the issue that would carry the election.

      Which should prove this is never as good an idea as you think. And attacks the wrong thing. You want to sling mud at the other guy, explain how he’s going to take money out of your paycheck. How he’s going to make it harder to provide for your family. How he’s going to jeopardize your livelihood. Not “he hates Muslims and is sexually aggressive towards attractive women–so vote for me!”

      His campaign explicitly targeted rural counties. Obama didn’t believe he could win them, and by and large he didn’t, but by redirecting populist anger and allaying cultural anxieties, he reduced his deficit among white noncollege voters to a tolerable margin. (When Bill Clinton asked his wife’s campaign to dispatch him to such small towns in 2016, campaign officials refused, because it would take him away from cities with larger vote hauls.)

      I don’t think it can be overstated how critical this was to HRC’s loss, and how they still don’t understand why rural and suburban communities could ever have a problem with them (see Georgia).

      Hillary Clinton didn’t battle just a demagogue, but also the adroit meddling of Vladimir Putin, the pious intervention of James Comey, and widespread misogyny.

      So, definitely targeting the article to Democrats who won’t get the message about appealing to the white working class, then.


    • Clinton distanced himself from the welfare state, which he damned as bloated and inefficient. He promised to pour money into the middle class itself, through tax cuts and spending on education and health care.

      Yeah, I can totally see why nobody on the HRC campaign thought that kind of appeal might work.

      When the moderator mentioned Flint, the largely African American city whose drinking water had been steeped in lead, the focus groups professed sympathy for the community. The lack of angry responses seemed to shock Greenberg. “There’s so much less about race,” he leaned over to tell me.

      Yet the left remains mired in this fantasy that the majority of conservatives still remember the 50s and pine for the days of racial segregation.

      It’s one thing to know that nativism exists; it’s another to hear it espoused so casually in the presence of strangers.

      OMG. Nativism has been something produced by natives, especially those feeling displaced, since the beginning of time. It’s completely natural and understandable. And if Franklin Foer and the rest of the newsroom had recently been replaced with immigrants willing to crank out think pieces for half the price, he’d be as nativist as any displaced Detroit auto worker. It’s human-frickin’-nature.

      As I walked with Warren across the Capitol, she seemed almost punch-drunk after a night of fawning press coverage and little sleep. She stepped with the bounce of a lottery winner.

      I wonder how much this bubble existence hurts the Democrats outside of urban centers.

      “I sound like I come from the left” to people on the left, she told me. “I don’t sound that way to a lot of folks on the right, or a lot of people who are just fundamentally apolitical.”

      Either she’s planning a presidential run, she’s delusional, or both.

      Heather Boushey, who led economic-policy planning for Clinton’s transition team, told me, “This was teed up to be the most progressive administration in recent American history.”

      Again, that probably didn’t help with the voters.


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