Morning Report: Wages increasing at the low end of the scale 7/21/17

Vital Statistics:

Last Change
S&P Futures 2470.8 -0.8
Eurostoxx Index 382.4 -1.6
Oil (WTI) 46.6 -0.4
US dollar index 86.7 0.2
10 Year Govt Bond Yield 2.25%
Current Coupon Fannie Mae TBA 103.31
Current Coupon Ginnie Mae TBA 104.375
30 Year Fixed Rate Mortgage 3.96

Stocks are flat this morning on another Summer Friday. Bonds and MBS are flat.

Should be a dull day as much of the mortgage business is at the Western Secondary conference, there is no data or Fed-Speak, and the rest of the Street will be on the LIE by noon.

What states still have the highest foreclosure issues? New Jersey is the worst, with 1% of all homes in some state of foreclosure. They are followed by DE. MD, IL, CT, NV, FL, SC, OH, and NM. Note there isn’t a lot of overlap between these areas and the best places to start a business.

Republicans in Congress plan to use the Congressional Review Act to overturn the Obama-era CFPB ruling that eliminates mandatory arbitration. The left wanted to overturn mandatory arbitration in order to make it easier to use class-action lawsuits to attack what it considers bad corporate behavior. The right worries that it will restrict credit, and amount to nothing more than a sop to the trial lawyers lobby.

Are we beginning to see the stirrings of wage inflation” Certainly at the low end of the wage scale we are. We are also starting to see wage inflation at the high end, where there are shortages of skilled labor. The middle is still lumbering along at 2.5% wage growth or so – better than inflation, but not all that satisfying. Especially since rental costs are outpacing inflation due to tightness in the real estate market. I have said this before: getting housing starts up fixed two major problems: lack of middle class jobs and a tight real estate market. Both would go a long way towards making the economy feel better.

Further to the above, Axios has a cool moving graph that demonstrates the malaise in the jobs market over the past decade. It plots the number of jobs on the vertical axis and wages on the horizontal axis. You can see in some professions where both the number and the wages have been falling.

15 Responses

  1. Spicer resigned.

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    • I am sure that Posner has grown less amenable to other viewpoints as he has aged. He has lately seemed a caricature of his former self. A debate between him and Scalia in 1985 would have been full of wit and light but one in 2010 would have been heated and unenlightening.

      Posner began as a conservative [not legal restrainist, but Republican] lion introducing the notion of economic result to judicial opinions. It was sort of a utilitarian view, especially of contract law. I hated that, and law schools started preaching it, much as they had begun to preach that too much trust busting was antiquated thinking [all this after my own time in LS].

      My own view as a practitioner was always “don’t change the law without fair warning” because as practitioners we all want to be able to tell a client what the law is before the client decides on a course of action. We don’t like to have to guess.

      I don’t think I will be getting round to reading this book – haven’t read any Posner since the 90s, although I often agreed with him then I also often disagreed.

      There is one circumstance where the kernel of his thinking has always made sense to me. If all would agree that a particular situation is an injustice, but half would argue there exists no remedy, the common law would traditionally try to fashion one, and that tradition of the common law remains central to Posner, although now wrapped in a cloak of economic theorizing, and extrapolated ever outward.

      On statutory interpretation, where Scalia pushed textual rigor, Posner pushed legislative intent.
      Most practitioners would look at a statute hoping for plain meaning, but finding sloppiness and disagreement in terms used in the same statute would then reach for the legislative intent. I have always thought you start from text, but you may not end there.

      Distressing how much Posner dislikes Kagan. She and Roberts are the only two whose opinions are always easy reads.

      Liked by 1 person

      • Mark:

        Distressing how much Posner dislikes Kagan.

        I got the impression that the person he really dislikes is Scalia, and that his dislike for Kagan was a direct function of her post-morgen praise of Scalia.

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  2. This headline is clearly reflective of anti-Trump bias.

    https://www.washingtonpost.com/world/national-security/sessions-discussed-trump-campaign-related-matters-with-russian-ambassador-us-intelligence-intercepts-show/2017/07/21/3e704692-6e44-11e7-9c15-177740635e83_story.html?hpid=hp_hp-top-table-main_sessions-7pm%3Ahomepage%2Fstory&utm_term=.af18bb397cd0#comments

    Leak of purported Kislyak report to Moscow is made to sound like intel intercept of Sessions speaking with Kislyak in the headline.

    A story that ought to be severely discounted.

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  3. Interesting Tweetstorm on Fusion GPS and DJTj, Ruskie meeting.

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  4. I wonder if this is the future of health care:

    http://time.com/4649914/why-the-doctor-takes-only-cash/

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    • Back when I was a young liberal in art school surrounded by leftist and various super-liberal identity groups protesting their oppression, that’s was the thing that drove me nuts. The egregious self-congratulation. I didn’t have much to compare it to, but the self-congratulation seemed bizarre, and the constant Mutual Admiration Society was just . . . icky.

      Of course, I wouldn’t protest the display (for a drawing class) of nudes from the 18th century because the teacher wanted to talk about line and form, not the evil of patriarchal oppression. So I became a right-wing Nazi overnight!

      But there’s lots of weird purity tests in various fragments of idealogical groups, and for many of them, when you fail a particular purity test, you’re no different than any Nazi or homophobic bigot. There is no spectrum. There’s just good guys and bad guys.

      The self-congratulation still gets to me. While there weren’t a lot of right-wingers at art school, there was no analog for the self-contratulations (and entire artwork being done as a form of self-congratulation). The closest I can think of is one douchebag going off on the fine artists, and basically being rude. There just wasn’t any detectable self-adulation in the sniping. I suppose, by definition, he was assuming a superior position.

      But it just wasn’t the same. And even now, I know uber-right-wing folks who say lots of harsh stuff about liberals. But rarely talk about it in a context of their own moral superiority and unique insight and intelligence.

      Eh, who knows.

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