Morning Report: Janet Yellen speaks at 11:50 9/26/17

Vital Statistics:

Last Change
S&P Futures 2495.8 -1.3
Eurostoxx Index 384.1 0.2
Oil (WTI) 51.9 -0.4
US dollar index 86.1 0.3
10 Year Govt Bond Yield 2.22%
Current Coupon Fannie Mae TBA 103.24
Current Coupon Ginnie Mae TBA 104.21
30 Year Fixed Rate Mortgage 3.85

Stocks are lower this morning as we await a Janet Yellen speech at lunchtime. Bonds and MBS are flat.

Janet Yellen will address inflation, uncertainty, and monetary policy at the National Association of Business Economics today. Charles Evans, Lael Brainard, and Loretta Mester also speak this morning. There probably won’t be any market-moving comments, but just be aware.

Charles Evans said he won’t support further rate hikes until we see clearer signs of inflation. This puts him in the camp of Neel Kashkari, who also doesn’t see the need to tap on the brakes. The dot plot from the last meeting showed 11 out of 16 members forecasting a rate hike in December. The Fed Funds futures are pricing in a 3/4% chance of a rate hike. This is the highest we have seen in this contract. Note the futures are predicting nothing happens in the November meeting.

Case-Shiller is out this morning, and home prices are up 5.9% YOY. The Pacific Northwest continues to outperform, with Seattle up 13.5% and Portland up 7.6%. Separately, home prices rose 0.5% MOM and are up 6.2% YOY, according to the Black Knight Financial Services Home Price Index. We are starting to see the areas around DC cool down, while New York (especially upstate) is beginning to pick up.

New Home Sales fell to 560k in August, according to the Census Bureau. This is a drop of 3.4% MOM and 1.2% YOY. Tight inventory remains the biggest problem. The median sales price of a new home was $300,200, and inventory was about 284k or 6.1 month’s worth. The Street was looking for 583k.

Consumer confidence slipped in September, according to the Conference Board. The index came in at 119.8, a touch below expectations. Expectations concerning employment and income contributed to the strong showing.

56 Responses

  1. Yeah, we had mass starvation and prison camps, but we dreamed big!

    Liked by 1 person

  2. David Brooks has a good piece today:


    • I only occasionally agree with Brooks, but I think this is right:

      What’s troubling to me is that those who are the targets of his assaults seem to have no clue about what is going on. When they feel the most righteous, like this past weekend, they are actually losing and in the most peril.

      I will be surprised if anything the left is doing right now redounds to their favor in the larger political landscape.

      This establishment, too, has had its failures. It created an economy that benefits itself and leaves everybody else out.

      Benefits some far more than others would have been accurate. It is simply wrong to say it “leaves everybody else out”. Especially if our start date is in the 60s or 70s. We’ve got housing projects where every apartment has a satellite dish on the porch. Poor people in America are better off today then they were in 1966, pretty much to a man (or woman).

      But, yes, the global elites are hugely better off, while the rest of us are mildly better off. A tragedy, to be sure, but not an apocalypse.

      He continually goes after racial matters in part because he’s a bigot

      I understand that’s a requirement of the NYT style guide, but still.

      He is so destructive because his enemies help him.

      This. In fact, he’s so destructive because his enemies make it so. Without them, he’d be a guy bloviating on Twitter.


      • Brooks also leaves out the logical conclusion of his argument, namely that instead of a new cultural consensus emerging, the country will split apart instead.

        Liked by 1 person

  3. This is hilarious.

    That Republicans think this will be spun as a tax cut is awesome! I’m really impressed! If they cut the upper brackets at the same time?


  4. I regret having even begun a thread about football players.

    Right now we have Isis, NK, Afghanistan, hurricane damage, and how Medicaid is going to be rewritten, all of which should have the actual attention of the nation and its President.

    But “squirrel!”

    Liked by 1 person

  5. I thought Trump won because of Ruskie bought Facebook ads?


    • which is why all the brouhaha over Citizens United is so overblown…

      Liked by 1 person

      • Yup. I’ve said it from the beginning. In the case of Trump, zero spending was necessary. He was already familiar. Political ads should focus on who they are promoting above everything else. If the candidate needs little or no promotion, save your money. Political ads should make the candidate familiar and memorable. Anything spent above and beyond that has zero influence. Being able to run 10,000 ads rather than 5000 can have a negative impact, making unexcited voters so sick of the campaign they just check out and don’t vote. Not only is Citizens United not giving the moneyed folks an unfair advantage, it often becomes a negative. Crappy ads run 10,000 more times just turn off voters, and that happens.


    • Surprised to see that in WaPo. Because it’s both obvious and true.


    • interesting. usually this is “our side isn’t influenced by ads. but you idiots are incapable of independent thought.

      Liked by 1 person

  6. I already wasn’t going to watch Star Trek: Discovery because it was a cynical ploy for CBS to start it’s own $10 a month to compete with Netflix and Hulu, and always fleece Star Trek fans.

    Now I can also not watch it because they feel they need to lecture me. That being said, it makes way more sense for the cast of Star Trek: Discovery to “take a knee” in protest that there aren’t more socialists in the world, or whatever, and isn’t going to impact the swiftness of their failure and cancellation whatsoever. The whole “NFL” turning anti-American thing is harder to get.

    Million ways for them to protest injustice or support BLM individually or whatever. Going all-in on burning the flag–or flipping the bird to the flag–seems like the exactly wrong choice, one engendered to create conflict, not inspire empathy.

    But it also appeals to the narcissism of sportsball stars.

    Not even going to watch Star Trek:Discovery when it inevitably lands on Netflix now. Besides, there’s already a good Star Trek show on a major network: The Orville, on Fox. While technically not a Star Trek show, Seth McFarland has made what is obvious his personal version of Star Trek:TNG. And it’s pretty good. I like it, anyway. Critics have uniformly hated it.


    • Liked by 1 person

    • Hope you’re not an X-Files fan.


      • Is anyone really shocked that Hollywood would jump on a disrespect-the-anthem bandwagon?

        Liked by 1 person

        • The desire for celebrity lefties to signal their virtue has really been interesting to watch. It’s almost manic, as if they’re more afraid to not do it.


        • Mcwing:

          It’s almost manic, as if they’re more afraid to not do it.

          I wonder for how many of them that is literally true. Probably quite a few.

          Liked by 1 person

        • They’re going to try and turn this into a thing..

          Liked by 1 person

        • Brent:

          They’re going to try and turn this into a thing..

          Next up….Broadway shows to start playing the national anthem before the curtain goes up, just to give the actors a chance to join in and protest…er…whatever it is they are protesting.

          Liked by 1 person

        • No. NFL surprises me, to the degree. I guess it was inevitable, but still. Or maybe I just don’t watch enough sportsball. Or any sportsball. Was a little surprised just how far left comic books have gotten. And the flavor of it. Comics have always had a progressive sensibility, but they didn’t come across as propaganda, where the stories written didn’t just reflect the writers liberal sensibilities, but now are written specifically as progressive tracts to promote right thinking among their rapidly dwindling audience.


        • The left is really promoting the jump in ratings for MNF. They forget it is an easy comparison since last year’s MNF went head to head with the Presidential Debates…

          Liked by 1 person

        • @Scottc1:

          It’s almost manic, as if they’re more afraid to not do it.

          I wonder for how many of them that is literally true. Probably quite a few.

          I’d do it in a heartbeat. Keep the peace and keep the paycheck, and what I need to do is take a knee in faux “solidarity”? I would do that thing.


        • @brentnyitray:

          The left is really promoting the jump in ratings for MNF. They forget it is an easy comparison since last year’s MNF went head to head with the Presidential Debates…

          There is also likely some initial interest, because of the attention being paid. I think that will fade. Who knows, it may not be a thing, but I think ultimately it will be. Boycotts work both ways, and once people start targeting NFL advertisers.

          And I think more people will ultimately tune-out than they currently expect. Some people may just choose not to buy season tickets again next year, but use the ones they got. Others will stop buying tickets, or wanting to avoid controversy stop offering tickets or a space in “the box” as a perk or incentive. If this doesn’t blow over, it’s going to spell trouble for them. No matter what the ratings were for MNF.


        • “I wonder for how many of them that is literally true. Probably quite a few.”

          When Jerry Jones did it, you knew it was a business decision, pure and simple.


    • Saw both Orville and ST. Orville much better. Also much funnier. ST not worth watching a third one, IMHO, having watched two.

      I have CBS All-Access since a long time ago – used to watch Perry Mason on my laptop in the motel when I was working out of town.

      Liked by 1 person

      • Heh! I’ve got Netflix, personally, primarily for the Marvel stuff. Not sure what I’ll do when Disney moves it all to their own streaming service. But I’m trying not to buy individual channel things . . . I can see paying $100 a months for 10 “dedicated” channels. Just not sure I’m gonna be up to that.

        Watch more Orville, Preacher, and Rick & Morty, I guess. I like Orville because, little touches of McFarland humor aside, it’s straight up TNG. Which the folks who actually make Star Trek are not capable of doing any more.


  7. Sports Illustrated all in:

    I guess I knew SI was a hotbed of progressivism, but had forgotten. Wonder how their circulation is doing.


    • KW:

      Wonder how their circulation is doing.

      I cancelled two years ago. Not even the swimsuit edition was worth it anymore.

      Liked by 1 person

      • I just don’t see SI (or the NFL) as being, long-term, financially supported by Evergreen students, member of antifa, and #BlackLivesMatter. I don’t understand what this urge is among sportsball franchises (and the sportsball press) to increasingly narrow their appeal and alienate the marketplace.

        This stuff has almost zero impact on Star Trek or X-Files. It’s the easiest, most risk-free thing in the world for the cast of Discovery or David Duchovny and Gillian Anderson to tweet out a picture, taking a knee.

        I have a hard time thinking that’s true in the sports arena. It’s like the guy at the head shop putting up Trump posters and wearing a MAGA cap. It’s not consistent with lion’s share of the target market.

        ESPN is having trouble, and they have some unfathomable, incomprehensible deal where the cable companies have to pay them $1.50 or $2.00 per month, per subscriber, even if that subscriber doesn’t want ESPN. They are locked in where it’s impossible to not subscribe to ESPN, unless you don’t subscribe to cable or satellite. Yet even with this insane lockdown that no other channel enjoys, they are having trouble.


        • It is clear that institutions which don’t necessarily cater to the left deeply fear them. Not sure what they can hold over Jerry Jones’s head, but they obviously had something for him to backtrack the way he did…

          Liked by 1 person

      • whoa, whoa, let’s not say things we can’t take back.

        Liked by 1 person

        • nova:

          whoa, whoa, let’s not say things we can’t take back.

          To clarify, what I meant was that the Swimsuit edition wasn’t worth putting up with all the left wing crap the rest of the time. The intrinsic value of pictures of mostly naked women remains unquestioned.


      • How long until they take up the fight for transgender cheerleaders? You know that is coming…

        Liked by 1 person

    • How does that work? Can you be a communist and still receive a commission?


      • You aren’t supposed to be making political statements in uniform, period. Let alone supporting communism.

        Again, obama’s military: him and Chelsea Manning.. The left hates, hates, hates the warrior culture. Unless it is chicks.


  8. Hunh.

    It was not immediately clear why the mistake was made, raising questions of whether the mistake was made in assessments of other states as well.

    It’s almost like this stuff gets pushed out in furthernece of a narrative.

    Just don’t call it a Deep State.


  9. The video at the link is fucking awesome!

    “You’re still white!” she yells after him. “You’re inherently racist! It’s in your blood! It’s in your DNA!”


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