Morning Report: Hiring and quits increasing 7/11/17

Vital Statistics:

Last Change
S&P Futures 2422.0 -2.0
Eurostoxx Index 380.1 -1.6
Oil (WTI) 44.1 -0.3
US dollar index 88.4 0.1
10 Year Govt Bond Yield 2.39%
Current Coupon Fannie Mae TBA 102.88
Current Coupon Ginnie Mae TBA 103.75
30 Year Fixed Rate Mortgage 4.05

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

Job openings fell slightly in May to 5.7 million, according to the BLS. The number of hires increased by 430k to 5.5 million. The quits rate increased to 2.2 million. The quits rate is a key indicator that carries a lot of weight with the Fed. An increase in the quits rate usually is an indicator of future wage inflation. The quits rate is back to pre-crisis levels.

Small business optimism declined in June, according to the NFIB. We are still higher than we were pre-election, but some of the optimism is fading as it looks like tax reform and healthcare reform are not going to happen. Employment-related indicators ticked down, but are still very strong. 85% of all respondents that tried to hire reported that there were few or no candidates with the required experience. Rising compensation will draw more people into the workforce, however that will be a slow process. Note that much of the drop in the labor force participation rate has been due to people aging out. The first big question is whether these people want back into the workforce or are content to stay retired. The second big question is whether ageism will keep these people out.

Consumers are becoming more optimistic according to the New York Fed. Nearly 35% of all respondents said they are better off now than they were a year ago, and they are less worried about losing their jobs. Consumers also said they expect to spend about 3.3% more in the coming year than they did last year.

Are appraisers going to be replaced by artificial intelligence and / or algorithms like Zillow’s Z-estimates? Some people think so. Zillow has been tweaking its model to take into account more than just the comps – now it will include things like interior amenities. This may happen out of necessity: the regulators raised the barriers to entry so high that the pipeline of new people entering the profession is almost nothing (In 2005, 1,200 people entered the profession. Now it is 100). The average age of an appraiser is 58 and there simply isn’t a stream of replacements. Freddie Mac is now willing to accept model-generated appraisals for some refis and is asking FHFA for permission to use more. It kind of begs the question of why the government then thinks appraisers need to have so much education and apprenticeship time if it is willing to accept modeled values to begin with.

Mortgage performance improved last month according to CoreLogic. 4.8% of all mortgages were 30 days down in April compared to 5.3% the year prior. That said, early stage delinquencies (30 – 60 days down) ticked up to 2.2% from 2% the year before. 60-90 day DQs were roughly flat YOY. Some of the drop in performance is coming from the energy-intensive states like Alaska and North Dakota. Now that oil cannot seem to get out of its own way, we may start seeing more trouble in the oil patch.

The CFPB has released a new rule making it easier for class-action suits against lenders. Financial firms will be restricted in their ability to use mandatory arbitration clauses to protect themselves against lawsuits. Under the Congressional Review Act, Congress has 60 days to overturn the new rule. The OCC has asked the CFPB for their data, and Republican Jeb Hensarling has already come out against it.

29 Responses

  1. The shot that will spawn a thousand memes

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  2. It kind of begs the question of why the government then thinks appraisers need to have so much education and apprenticeship time if it is willing to accept modeled values to begin with.

    There’s that, but I’m guessing we’re not too far from AI outperforming human appraisers in the future, so it’s one of the many areas that’s going to see people being moved out, or relegated to data entry for the AI. Still not there yet, and for optimum accuracy someone would have to drop by the house and take some pictures, maybe tick some checkboxes beyond amenities (for the potential negatives, such as evident lack of maintenance, elevation, etc). Most other data could probably be collected or is available, such as distance from railroad tracks or subways, standing water, but much of that value-subtraction could be determined from comps.

    It’s all going to be modeled, eventually. And what a fun transition that’s going to be!

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  3. Nearly 35% of all respondents said they are better off now than they were a year ago, and they are less worried about losing their jobs. Consumers also said they expect to spend about 3.3% more in the coming year than they did last year.

    Just another example of Trump benefitting from all of Obama’s hard work. 😛

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  4. one way to get senators to do anything is prevent them from leaving town

    http://thehill.com/blogs/floor-action/senate/341480-senate-to-delay-recess

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  5. so the National Security reporter for local radio WTOP actually referenced this scene in a report this morning.

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  6. You know, DJT, Jr. might just be very stupid.

    The email he received refers to the Crown Prosecutor of Russia.

    That’s like a Nigerian bank con.

    Nevertheless, his eager response evidences his intent to join in a conspiracy to violate a federal criminal statute.

    Utter stupidity is not usually a defense to a felony but it might be, here, to a sympathetic jury. And of course, Daddy has the pardon pen.

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    • Mark:

      Nevertheless, his eager response evidences his intent to join in a conspiracy to violate a federal criminal statute.

      Seeking dirt on your political opponents is a violation of federal law?

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      • Conspiracy law does not require “success” but of course it requires some evidence of a step taken beyond the intent to make an indictment. My point is that the “intent” element is now evidenced by a paper trail. Emails suck, in retrospect.

        I am not suggesting that the “intent” to do something that is never followed up is indictable. It is not.

        I can see how a Brit might use “Crown Prosecutor” but it just sounds absurd in relation to Russia. Even the men and women of the Department of Public Prosecutions in Australia are called “Crownies” and I am quite familiar with the term, but I never thought anyone would extrapolate it to Russia!

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        • Just a comment on that picture.

          I get that Trump regularly broadcasts a common man, Archie-Bunker-ish crassness, but subtract the politics and tweeting and what you know about those two, and just the picture . . . sheesh, could there be anybody who looked more elitist? Could put that picture under “Elitist” in the dictionary.

          Where Obama looked more like the affable, advice-dispensing principal on a WB dramedy.

          Michelle Obama reminds me of the efficiency expert your department is introduced to a few weeks before everyone is fired.

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        • mark:

          The NYT article is pretty much exactly the kind of breathless and wide ranging yet ultimately vague and substance-less opinion I would expect from them on the subject of Trump/Russia. (It can’t even correctly report what Alger Hiss was convicted of, which was simple perjury, not for “…’forgetting’ in sworn testimony that he had met with Whitaker Chambers” as a proxy for treason.)

          My point is that the “intent” element is now evidenced by a paper trail.

          To be sure, the e-mail established “intent” to do something, but unless that something was to violate an actual law, I’m not sure what import the establishment of “intent” holds. What I am curious about is exactly which “federal criminal statute” you think it establishes an intent to conspire to violate.

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        • t can’t even correctly report what Alger Hiss was convicted of, which was simple perjury, not for “…’forgetting’ in sworn testimony that he had met with Whitaker Chambers” as a proxy for treason

          Did they forget Hiss was demonstrably a Soviet spy?

          In any case, it’s not the same era, nor is collusion with Russia (no matter how morally wrong or illegal) anything like active collusion with and spying for the Soviet Union. But, quibble-quibble.

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        • “What I am curious about is exactly which “federal criminal statute” you think it establishes an intent to conspire to violate.”

          Vox addresses what I think is the general thrust of the argument:

          https://www.vox.com/world/2017/7/10/15950590/donald-trump-jr-new-york-times-illegal

          The statute in question is 52 USC 30121, 36 USC 510 — the law governing foreign contributions to US campaigns. There are two key passages that apply here. This is the first:

          A foreign national shall not, directly or indirectly, make a contribution or a donation of money or other thing of value, or expressly or impliedly promise to make a contribution or a donation, in connection with any Federal, State, or local election.

          The crucial phrase here is “other thing of value,” legal experts tell me. It means that the law extends beyond just cash donations. Foreigners are also banned from providing other kinds of contributions that would be the functional equivalent of a campaign donation, just provided in the form of services rather than goods. Like, say, damaging information the Russian government collected about Hillary Clinton.

          “To the extent you’re using the resources of a foreign country to run your campaign — that’s an illegal campaign contribution,” Nick Akerman, an assistant special prosecutor during the Watergate investigation who now specializes in data crime, says.

          Here’s the second important passage of the statute: “No person shall knowingly solicit, accept, or receive from a foreign national any contribution or donation prohibited by [this law].”
          The key word from Trump Jr., according to University of California Irvine election law expert Rick Hasen, is “solicit,” which has a very specific meaning in this context. To quote the relevant statute:

          A solicitation is an oral or written communication that, construed as reasonably understood in the context in which it is made, contains a clear message asking, requesting, or recommending that another person make a contribution, donation, transfer of funds, or otherwise provide anything of value.

          Trump Jr. was clearly soliciting information that he knew was coming from a foreign source. Given that political campaigns regularly pay thousands of dollars to opposition researchers to dig up dirt, it seems like damaging information on Clinton would constitute something “of value” to the Trump campaign.

          The solicitation bit is why it doesn’t matter if Trump Jr. actually got useful information. The part that’s illegal, according to the experts I spoke to, is trying to acquire dirt on Clinton from a foreign source, not successfully acquiring it. And his statement more or less admits that he did, in fact, solicit this information.

          “The most recent [developments] are especially significant because they include specific statements on the record conceding the Trump campaign’s expressed interest in what the Russians could provide,” Bob Bauer, White House counsel for Barack Obama from 2010 to 2011, writes at Just Security. “Those statements show intent — a clear-cut willingness to have Russian support — and they reveal specific actions undertaken to obtain it.”

          Trump appears to have recognized some danger. On Monday afternoon, he hired a lawyer, Alan Futerfas, to represent him on issues relating to the Russia investigation. So far, Futerfas has not responded to a request for comment.

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        • KW:

          A foreign national shall not, directly or indirectly, make a contribution or a donation of money or other thing of value, or expressly or impliedly promise to make a contribution or a donation, in connection with any Federal, State, or local election.

          It is difficult to see how this could extend to include simply the provision of information. Was it a violation for foreign leaders to endorse Hillary Clinton? She clearly viewed such endorsements as valuable to her campaign, and she entertained calls from them asking if they should publicly endorse her. Are these foreign endorsements a “thing of value” that have been “contributed” or “donated” to her campaign?

          http://thehill.com/blogs/ballot-box/presidential-races/272855-clinton-says-foreign-leaders-want-to-endorse-her-to-stop

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        • I remember in 2008 candidate Obama giving a political rally in Germany.

          In Germany.

          I cannot believe that the kraut government didn’t provide uncompensated for support for that. How was that “collusion”?

          Liked by 1 person

      • I think there’s a compelling legal argument to be made that seeking dirt from foreign nationals could be a violation. And I feel like someone with their brain engaged, when offered such, might run it by someone with legal knowledge and get an opinion. Something should automatically send up a red flag: maybe this isn’t a great idea. I did not know the specifics of the criminality (and, ultimately, I think it’s up to a jury to decide) but the minute I read about the exchange I recognized it as something that would make me feel queasy, in DJT jr’s place.

        If nothing else, he should have considered how awful the optics would be, should it get out, and that it would inevitably get out.

        My question is: how much hay can they actually make out of this in the War on Trump? They may “nail” jr, and Trump could pardon him, and then there will be a new attack over the pardon. And so on. I’ve already got HateTrump fatigue. I don’t like Trump and so far am underwhelmed by both his work ethic and his ability to deliver on anything other than bloviation, but I find myself so numb to the Opposition Press and the Democrats and the left generally on the Trump-Issue-Dujour that I tend to suspect that, if they would ever shut up, I might be tempted to side with them, at least against Trump.

        As it is, I’m more hopeful they don’t get a big victory in 2018. Would serve them right. 😉

        I feel like this latest Trump scandal would have a lot more resonance had the press and the left not been trying to make everything a scandal, every day, since before Trump was elected.

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        • KW:

          I think there’s a compelling legal argument to be made that seeking dirt from foreign nationals could be a violation.

          I wonder about that, but if so isn’t it kind of strange that we never heard this argument forwarded with regard to the infamous dossier on Trump’s alleged piss-parties with prostitutes in Russian hotel rooms, a dossier that was produced and shopped by a British foreign national with UK government connections in an effort to damage Trump’s campaign? Did anyone in any campaign, either among Republicans or Democrats, express any interest in hearing about the material in this dossier, and if so, are they also guilty of conspiring to violate a federal criminal statute?

          I feel like this latest Trump scandal would have a lot more resonance had the press and the left not been trying to make everything a scandal, every day, since before Trump was elected.

          I am sure that is true.

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      • “Seeking dirt on your political opponents is a violation of federal law?”

        No, but I suspect accepting the help of a foreign government in an election is.

        https://www.justsecurity.org/41593/hiding-plain-sight-federal-campaign-finance-law-trump-campaign-collusion-russia-trump/

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        • The hacking of the Podesta emails, which were then transmitted to Wikileaks for posting, clearly had value, and its connection to the election is not disputed.

          I think this is a hard-ish to make that argument. Also, it doesn’t seem this was solicited or that there as any collusion to make it happen. Also, Podesta’s responded to a simple phishing scam, so literally anybody could have done it.

          Does a presidential campaign render this substantial assistance to a foreign national engaged in influencing an election by endorsing the specific activity and confirming its strategic utility?

          I don’t believe for a minute that SCOTUS would see it that way.

          The Russians could only have been strengthened in the conviction that their efforts were welcome and had value. That covers the evidence in plain sight.

          I don’t know how the argument will work in the real world. I don’t think it will. Not sure many of the invested players want it to, because it can leave them vulnerable. I think they want it as an attack on Trump, as a way to obstruct and harass, but not necessarily to convict or impeach. At least, many of them don’t want to open themselves up, or their party, to the same sort of conviction possibilities.

          How strongly does the First Amendment protect a presidential nominee’s mobilization of foreign government support for his candidacy—support achieved through illegal activities?

          You have to make the argument that Trump’s bloviation, in full public view, is collusive in nature, right? That seems a tough thing to do.

          It would be remarkable to maintain that this appeal for help is converted into constitutionally protected speech because the speaker has chosen to have much or all of the conversation in public.

          I don’t think it would be remarkable at all. It says: Look, I was just sayin’. I was illustrating the point. If I was colluding in Russia, why would I be doing it by making speeches to all these wonderful Americans who want to make America great again? Come on.

          I think the free speech question is non-trivial. Specifically as this was public, political speech.

          It would then have the thankless task of persuading a court that a presidential candidate can invite, then warmly accept and exploit, the activities of a foreign intelligence service because it is a particular kind of “value,” not a conventional contribution or expenditure.

          I think that’s more a Sisyphean task. It wants to contort the definitions of “warmly accept and exploit”. Democrats trumpeted both foreign opinion polls and statements made, hostile to Trump, by foreign leaders . . . and some continue to do so. Are we going to consider that warmly accepting a “donation in kind” from a foreign power?

          The campaign will have an even harder time if it is established that Russians distributed information through online bots

          This makes no sense. The words “through online bots” should not even be there. What does that even mean? Does the author know?

          This is no help to the Trump campaign which certainly had every reason to know that, as widely reported and declared officially by the US government, Russia was behind the hacking.

          It’s easy to assert online and on blogs. I think it will be harder to prove that in the real world. As an example, the 17 agencies that signed off on Russia being behind the hacking turned out to actually be 3 agencies. The DNC has not let a government agency do a forensic analysis of their computers, still, and so we only have the word of one friendly independent contractor as to what they found. The agencies that have determined a high likelihood of Russian attempts to influence the election are most probably simply using logical extrapolation: Russia has always tried to influence our elections, and our politicians. Back in the Soviet era we had congresscritters on the Soviet payroll. So, it’s a rational conclusion, but not at all unique to this particular election.

          But it may be an example of where there is smoke, and more smoke, and even more smoke, we just have to assume there’s a fire. DJTs recent email disclosures would likely influence how many regard the rest of the argument, regarding DJT courting Russia’s help from the stump.

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        • jnc:

          No, but I suspect accepting the help of a foreign government in an election is.

          Perhaps, but the emails do not seem to establish or even indicate that any help was accepted.

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        • This makes no sense. The words “through online bots” should not even be there. What does that even mean? Does the author know?

          It is probably from a half-remembered conversation he had with his IT guy when he was installing Office 360…

          Liked by 1 person

    • Mark:

      The email he received refers to the Crown Prosecutor of Russia. That’s like a Nigerian bank con.

      The guy who wrote the email is British, and in Britain attorneys who conduct state prosecutions work for the Crown Prosecutor Service and are called Crown Prosecutors. Seems likely that he was simply using the British term to refer to the Russian equivalent.

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    • Turns out the “damaging information” was largely pedestrian info about the Ziffs.

      https://www.bloomberg.com/news/articles/2017-07-12/russian-at-trump-tower-is-said-to-have-gathered-details-on-ziffs?cmpid=socialflow-facebook-politics&utm_content=politics&utm_campaign=socialflow-organic&utm_source=facebook&utm_medium=social

      The outrage-o-meter going to break down along partisan lines as usual…

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      • It’s the frickin’ Wish-o-Meter. PlumLine comments are all basically fantasies about how *this* is the thing that will bring down Trump, or finally proves collusion with Russia, or really, really underlines how Republicans are uniformly bags of garbage.

        “Outrage” often seems like a weird form of fetishized sexual arousal, complete with lots and lots of fan fiction.

        Like

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