Morning Report: Seattle home prices up 13% 6/27/17

Vital Statistics:

Last Change
S&P Futures 2433.8 -2.3
Eurostoxx Index 386.3 -2.7
Oil (WTI) 44.0 0.6
US dollar index 88.4 -0.3
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 3.91

Stocks and bonds are lower this morning as we have a lot of central bankers speaking today.

Home prices rose .5% in April and are up 5.7% YOY, according to the Case-Shiller Home Price Index. Seattle home prices rose almost 13%, while Portland and Dallas rose over 9%. They ask the question whether we are in another bubble, which we are not. Bubbles are fundamentally psychological phenomenons, where both investors and lenders view an asset as “special” and argue that it cannot fall in price. While home prices may be reaching unsustainable levels, the lending side of the business is emphatically not exhibiting bubble-like behavior. Credit is still tight for anything that doesn’t fit in the government / GSE box. In fact, the government would like lenders to take more risk than they are willing to take at the moment.

Consumer confidence rose in June, while the Richmond Fed Manufacturing index improved.

Fannie Mae’s latest Housing Outlook is out, and they are predicting 2% GDP growth for 2017. For Q2, they are forecasting 2.9%. Housing will continue to be held back by labor and land shortages, however mortgage rates will remain supportive of the housing market in general.

Senators Bob Corker and Mark Warner are working on a plan to break the Fannie / Freddie duopoly. The plan would split the single-family and multi-family lines and break the single family up into more independent firms. The broad guidelines are to increase competition, reduce barriers to entry, reduce risk to the taxpayer, and to maintain the 30 year fixed rate mortgage. The most difficult part will be dealing with low-to-moderate income support, where there are genuine philosophical differences between Republicans and Democrats.

The bloom is off the rose for the post-election surge in confidence, according to Gallup. The economic confidence index stayed at 3 last week, off of its March high of 15, but still above the pre-election level of -11. Much of this breaks down along partisan lines, with Democratic voters the most gloomy about the economy and Republican voters most confident. Before the election, this dynamic was reversed – with Democrats optimistic and Republicans pessimistic.

25 Responses

  1. Lots of screeching in the media about McEnroe’s statement

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    • Brent:

      Lots of screeching in the media about McEnroe’s statement

      Yet again we learn that some truths simply cannot be spoken.

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      • I guess the whole point of the outrage is to hector men into playing along with the feminist fantasy that they would be just as fast and strong as they are if society was engineered more to their tastes?

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      • I actually think Williams would beat McEnroe quite easily.

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        • jnc:

          I actually think Williams would beat McEnroe quite easily.

          He didn’t say that he could beat her. He said that she would be ranked about 700 in the world if she had to compete with men. (FYI, McEnroe was last ranked in 1995 at 1,219.)

          Now, I don’t know about the exact ranking, and maybe it is a slight exaggeration (although probably not), but the wider point is definitely true. Most if not all of the men on the men’s tour would beat her. There is a vast difference in talent level between even middling players on the men’s tour and the greatest woman player ever.

          BTW, the same is true for golf.

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        • For track and field, world class female athletes would not qualify for the high school boy’s state meet in their respective states.

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        • Thanks. What I read about what he said was wrong (go figure).

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        • Apparently Williams said the same thing at one time:

          “”If I were to play Andy Murray, I would lose, 6-0, 6-0, in five to six minutes, maybe 10 minutes,” Williams told Letterman. “The men are a lot faster, they serve harder, they hit harder. … It’s a completely different game.””

          https://www.vox.com/culture/2017/6/27/15879520/john-mcenroe-serena-williams-greatest-controversy

          This is the epitome of political correctness. The truth can’t be said, even when everyone knows it’s true. The framing of the Vox piece says it all:

          “Why McEnroe won’t apologize for comparing Williams to male tennis players.”

          Because of course that’s what he should do for answering an interviewer’s question honestly.

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        • I was trying to find this yesterday. Well played.

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    • Lots of screeching in the media about McEnroe’s statement

      I heard the interview question and immediately loathed the interviewer. She seemed to think Serena truly was the greatest tennis player of all time and felt it necessary to point out that McEnroe merely thought she was far and away the greatest female tennis player ever. Answering a straightforward question in a straightforward manner, McEnroe made his perfectly reasonable statement.

      The interviewer was obviously gleeful about his answer and thought she had an “aha” moment.

      I hope Serena herself makes light of it and says she thinks she could perhaps crack the top 200, or something like that. And then she might add that she lost a set 6-2 to the 203rd ranked man when she was 19 but she is better now.

      Put that interviewing witch into limbo.

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  2. Can anyone sympathetic to the Russian Hacking narrative come up with a legitimate reason for the DNC to not provide their server to the FBI for investigation?

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    • Can anyone sympathetic to the Russian Hacking narrative come up with a legitimate reason for the DNC to not provide their server to the FBI for investigation?

      Dumbness.

      Can anyone come up with a legitimate reason why McConnell did not want to have the Senate back sanctions on Russia before the election?

      It would have reflected better for HRC.

      Can anyone come up with a legitimate reason BHO took McConnell’s failure to agree to do something before the election as an excuse to wait until after the election?

      Arrogance[was sure HRC would win anyway] plus dumbness.

      Dumbness and arrogance and “reflect better” are what pass for legitimate reasons nowadays.

      Liked by 1 person

      • So, your opinion is that when the DHS and FBI went to the DNC to ask for the server to get evidence of Russian hacking, they declined for no other reason than they’re dumb?

        They claim they gave the server to CrowdStrike for a forensic exam. Why not the FBI and DHS?

        They’re not to dumb to have it investigated but to dumb to have it investigated by entities that could do something about it?

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        • Friends in Crowdstrike would be my first guess, with an understanding that compromising material (probably unrelated to any Russian hacking) or compromising information (their poor security) could not be used against them legally, and would not be publicly disclosed.

          Crowdstrike may exist to provide forensic IT to people in government who need to make sure the results are private and confidential and that unrelated things, like massive porn libraries, aren’t discovered and misunderstood.

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        • Agreed. They are owned by an anti-Russian Ukrainian. Why should I take their report as the truth, given their desire to taint Trump’s candidacy and Presidency?

          Just seems weird to deny the Feds access, especially after the election but before the inauguration. They had a narrative to feed that is very vulnerable with only CrowdStrike as the Authority.

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        • You shouldn’t. You shouldn’t take their assertion that they’ve discovered “Russian hacking” or “Russian tampering” as anything but either ignorance but more likely intentional BS.

          They haven’t done any such thing. IP addresses in Russia and China hit every machine on the Internet, all the time. I’m sure there’s government probing (not specifically at Putin’s command, or anything) but also thousands of private or quasi-private or contract actors doing all sorts of stuff. Someone in the US could have contracted with someone who contracts with someone or rents machine time in Russia and, boom.

          Indicating something about the footprint of the tools used or any malware installed is just nuts. Every spy agency has software that looks like stuff from everybody else. Much of it has leaked into the public domain of hacking tools, so a teenager in Poughkeepsie could be using tools with a Russian “footprint”. And without a rigorous public disclosure of all the information they used for their conclusions and how the eliminated all other possibilities could you hope to judge the potential accuracy of their claims.

          Say you find out a bunch of brute force attacks came from the Russian version of a local DMV. What does that tell you? That Putin is attempting to mask his nefarious hacking activities by using a far-down-the-chain government office, or that the government office is a sham, or that freelance hackers have pwned the computers in that office? The most likely answer would actually be #3: that freelance hackers are using government hardware and/or IP addresses. Serious government hacks would likely not originate in Russia. They’d be more likely to originate from server farms in the US, Europe, or Japan. And move around.

          There is literally no reason to take anybody’s word on the Russian hack: not Crowdstrike, or the FBI, or the CIA, or the NSA, or any other government organization that has carte blanche to lie to the public and a historical record of doing it in secret briefings with congressional chairpersons and presidents. Assertions are just words, and words are wind.

          Which is not to say there wasn’t a Russian hack targeting our elections in some sense, only that there is zero actual evidence being presented for it. Just a lot of assertions of authority and social proof.

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        • They’re not to dumb to have it investigated but to dumb to have it investigated by entities that could do something about it?

          Seems like it. Although Kev’s view seems to unravel “dumb” with nuance that has got to be at least part of it, I think.
          Too much porn is a good bet, I would guess, because who wants a bunch of cops looking at your porn?

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        • Delaware U. female professor of anthropology is now a former prefessor.

          “Is it wrong of me to think that Otto Warmbier got exactly what he deserved?” she wrote. “I see him crying at his sentencing hearing and think, ‘What did you expect?’”

          The post continued: “These are the same kids who cry about their grades because they didn’t think they’d really have to read and study the material to get a good grade. His parents ultimately are to blame for his growing up thinking he could get away with whatever he wanted. Maybe in the US, where young, white, rich, clueless white males routinely get away with raping women. Not so much in North Korea. And of course, it’s Otto’s parents who will pay the price for the rest of their lives.”

          The 62-year-old professor made similar remarks, since deleted, in the comments section of a National Review article, Campus Reform reported. She said she loved her “hard-working, sincere, non-arrogant college students,” but added: “If you knew some of these kids, you’d be appalled. They think nothing of raping drunk girls at frat parties and snorting cocaine, cheating on exams, and threatening professors with physical violence.”

          Yep – kid gets tortured in NK prison deserved it ’cause he was an entitled white male.

          There should be a reserved place in hell for this former prof shared with the witch who interviewed McEnroe.

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      • Occam’s razor. “Dumbness” covers a lot, but if you unpack that, I expect you might find bad and self-serving advice from Crowdstrike, the firm that did the “analysis”, so-called. A DNC with friends at Crowdstrike. An IT Department protective of their fiefdom. Individuals in the DNC with mistrust of the FBI and their intentions (this is not an unreasonable position). And an unwillingness to lose the time a comprehensive audit might show.

        A serious concern that they weren’t sure if everything they’ve ever had on their computers could not be resurrected, or the FBI had some tool to measure their porn viewing, and concern about things shared in emails beyond perhaps what was filched.

        I imagine it was some mix of ignorance, trepidation, and self-interest. And insularity.

        In regards to the DHS, I would suggest the unannounced port scans of various election offices and other government office, probably related to election security but maybe just a general analysis for other purposes, suggests that the DHS doesn’t really know what they are doing. Government is filled with people who really think they are experts and know what they are doing, but don’t. IT departments (in the government, naturally, but elsewhere as well) are filled with the same sorts of people. So the DNC folks could have been worried about that, while at the same time being staffed with IT people who think they are experts and know everything.

        I imagine there were lots of factors informing a generally questionable decision.

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    • Lots of guns in America. Unsurprising. The numbers are wrong in the press. Completely predictable.

      That they go low on the numbers is a little surprising. You think they’d go high, to illustrate our gun crazy culture. But maybe they go lower because they don’t want to point out how low gun death is in a country with 600 million or 700 million firearms.

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  3. This should be good:

    “Sarah Palin files convincing lawsuit against the New York Times editorial board
    By Erik Wemple
    June 27 at 8:56 PM”

    https://www.washingtonpost.com/blogs/erik-wemple/wp/2017/06/27/sarah-palin-files-convincing-lawsuit-against-the-new-york-times-editorial-board/

    Liked by 1 person

    • jnc:

      This should be good:

      Yeah, I saw that story this morning. It’ll be fun to watch.

      Liked by 1 person

    • Good for her. It will ultimately be spun as an attempt to suppress free speech and hostile to “freedom of the press”, but everything that illustrates how fact-free even the staid and hoary news outlets of record are in the present day is a good thing. And if WaPo, the official anti-Trump propaganda arm of the Democratic party, is reporting it with anything but abject horror . . . it’s a sign that even some folks a little left of center can’t help but notice the increasing worthlessness of the NYT.

      Like

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