Vital Statistics:
Last | Change | |
S&P Futures | 2627.8 | 3.0 |
Eurostoxx Index | 386.4 | 1.5 |
Oil (WTI) | 57.6 | -0.5 |
US dollar index | 86.5 | 0.0 |
10 Year Govt Bond Yield | 2.37% | |
Current Coupon Fannie Mae TBA | 102.938 | |
Current Coupon Ginnie Mae TBA | 103.75 | |
30 Year Fixed Rate Mortgage | 3.89 |
Stocks are higher this morning on overseas strength. Bonds and MBS are lower.
The second estimate for third quarter GDP was revised upward from 3.0% to 3.3%, in line with expectations. The price deflator was revised downward by 10 basis points to 2.1% and spending was revised downward as well.
Mortgage Applications fell 3% last week as purchases rose 2% and refis fell 8%. There was an adjustment for the Thanksgiving Day holiday. Rates were more or less unchanged.
Corporate Profits rose 10% in the third quarter, an improvement from the 7.4% increase in the second.
Bitcoin hit $10,000 last night, and is a fascinating Rorsach Test for one’s political and monetary views.
Growth is accelerating not only in the US, but globally as well. Goldman and Barclay’s are forecasting that global growth will hit 4% next year, the highest since 2011. Strategists are betting that Japan (the second biggest economy) has finally turned the corner, at long last. This will probably not be great for interest rates however. That said, until inflation returns, slow and steady increases will be the name of the game and the origination business might still do just fine as a wave of first time homebuyers enter the market.
Last night a Federal Judge denied the CFPB’s request for a temporary restraining order to prevent Mick Mulvaney from assuming the role of acting director for the CFPB. His first act was to institute a hiring freeze and a moratorium on new regulations.
Jerome Powell faced the Senate yesterday, and for the most part things stuck to script. He said that the case was strong for a rate hike in December, but he didn’t offer much in the way of specific policy guidance. Many Senators wanted him to opine on tax cuts, but Powell wouldn’t go there.
The MBA is calling on the Senate to change a provision that requires lenders to pay tax on the mortgage servicing right up front, even though it is a non-cash item. It wasn’t specifically directed at MSRs – it was directed at anything that is an accrual. The fact that independent mortgage originators have accumulated so much servicing has bothered many in DC, and this provision would probably encourage more of them to sell servicing to the big banks. It won’t be good for MSR valuations, that is for sure. The MBA makes this point, and also says that small independent originators will have a more volatile income stream, as an MSR portfolio has a counter-cyclical effect on the mortgage origination business. I don’t think this was necessarily a policy intention and it is an excellent example of why you don’t push through tax reform on an expedited timeline without public comment, etc.
NAR is out with their “game changers for 2018.” They are predicting that supply will finally begin to catch up with demand and that home price appreciation will moderate. The effect will be felt at the middle to high end ($350k+) range as that is where the building has been and demand for starter homes will only increase as the Millennials age and get jobs. Tax reform will have a potential impact, however that will only be at the higher tiers.
Filed under: Economy, Morning Report |
Lulz
https://twitter.com/TPCarney/status/935893117101838336
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“Bitcoin hit $10,000 last night, and is a fascinating Rorsach Test for one’s political and monetary views.”
What’s the forum’s consensus on this? Bubble at this point?
I’m starting to read commentary to the effect that the prices can’t go down because the rate of bitcoin mining is slowing and by design will be exhausted in 100 years. That strikes me as bubble thinking.
And I think the Onion predicted this as the remedy for the 2007-2008 financial crisis by creating another bubble to replace it.
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Can you have a bubble/bust with an asset that never had any intrinsic value to begin with?
I’m thinking it’s not a bubble because the point of owning bitcoins is more of a political statement than an investment.
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Not for the Chinese and a lot of other people. It’s about avoiding government control.
And now I know people who are getting in just because it has an 800%+ return for 2017. My friend made $35,000 day trading it over four hours yesterday while drinking wine on her flight. She texted me the screen shot.
And now institutional investors are jumping in.
Edit: Correction, 1000% return for 2017, 15% in 24 hours.
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How do you day trade bitcoin?
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ETF’s I believe. Or currency desk. I’ll ask her.
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View at Medium.com
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It was GBTC.
https://finance.yahoo.com/quote/GBTC/
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“Bubble trouble? Bitcoin tops $11,000 after $1,000 surge in 12 hours
Jemima Kelly, Gertrude Chavez-Dreyfuss
November 28, 2017 / 5:00 PM / Updated 21 minutes ago”
https://www.reuters.com/article/us-markets-bitcoin/bubble-trouble-bitcoin-tops-11000-after-1000-surge-in-12-hours-idUSKBN1DS2X1
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Not sure it has to have had intrinsic value. It has market value, and that’s all you need for a bubble, yeah?
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jnc:
What’s the forum’s consensus on this? Bubble at this point
I cannot get my head around how it has come to be seen as a store of value at all, so I am probably not the best judge. I genuinely do not understand it on any level.
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Scott Adams has jumped on the band wagon.
http://blog.dilbert.com/2017/10/27/whenhub-saft-simple-agreement-for-future-tokens/
Blockchain is the new internet get rich quick scheme buzzword.
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I agree 100%. Cannot get my head around it.
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The primer that NoVA posted is pretty good.
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I don’t understand it particularly. Presently it has to be more tulip mania. It’s another bubble. I can see a potential future value in an all digital currency, but not within a market where its value can be make such huge moves in such a short time.
I like that it’s confined to digital currency. A crash is only going to hurt a confined group of people. Ain’t going to be like the real estate bubble, for example. Or even the dot-com bubble.
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If there are institutional investors in this, it’s not going to be confined. No more so than sub prime was “contained”.
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“I’m starting to read commentary to the effect that the prices can’t go down because the rate of bitcoin mining is slowing and by design will be exhausted in 100 years. That strikes me as bubble thinking.”
It’s definitely bubble thinking. Also, it’s not the only digital currency, and certainly won’t be if the ultimate quantity of bitcoins is reducing and eventually fixed.
“prices can’t go down”
It seems crazy to me to think prices can’t go down on something with only market value, and no real guarantor. Anything can go down on value. Lots of relatively rare things go down on value because the market thins. And it’s reasonable to expect enough of a downslide will spook people, causing them to get out or stay away, which will cause the value of bitcoin to crash.
That being said, I should have finished mining my first bitcoin way back in the day. I could have had a least 1, maybe 2, but I got bored and stopped paying attention to it.
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Wow:
“Garrison Keillor, ex-host of ‘A Prairie Home Companion,’ dropped by Minnesota Public Radio after allegations of improper behavior”
https://www.washingtonpost.com/lifestyle/style/garrison-keillor-ex-host-of-a-prairie-home-companion-dropped-by-minnesota-public-radio-after-allegations-of-improper-behavior/2017/11/29/5fa1256c-d52c-11e7-b62d-d9345ced896d_story.html
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And a mandatory offering of one child per town for the Republican Hunger Games!
https://www.dailykos.com/stories/2017/11/29/1719511/-The-Republican-tax-bill-will-end-cancer-treatment-for-Medicare-patients
May the odds be ever in your favor.
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What are the typical outcomes and quality-of-life benefits of cancer treatment for Medicare patients?
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Not sure, but a HUGE amount of oncologics are paid for by Medicare as a majority of cancer patients are older and therefore on Medicare.
In the end though, it depends on the type of cancer, you’re age and overall health.
Of course, we all die, so…
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remind me later and i’ll pull that information for you.
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Ok, this diary is even better!
https://www.dailykos.com/stories/2017/11/28/1719270/-Republican-tax-bill-paves-way-for-the-destruction-Social-Security-Medicare-and-safety-net
Imagine the Kos diary titles after 4 years of Trump: World to End Tomorrow, Women and Children Hit Hardest!
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You can’t make this shit up!
https://www.washingtonpost.com/opinions/al-franken-should-resign-thats-absurd/2017/11/28/d33e2d8a-d482-11e7-a986-d0a9770d9a3e_story.html?utm_term=.523dbe165d05
The dateline is yesterday.
Yesterday!
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It’s always telling how these defenses skip the actual allegations they don’t want to address.
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Mike Pence looks smarter every day.
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Lots of dudes are going to be so more cautious after this…
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This is still spot on:
“Many men will absorb the lessons of late 2017 to be not about the threat they’ve posed to women but about the threat that women pose to them. So there will be more — perhaps unconscious — hesitancy about hiring women, less eagerness to invite them to lunch, or send them on work trips with men; men will be warier of mentoring women.”
https://www.thecut.com/2017/11/rebecca-traister-on-the-post-weinstein-reckoning.html
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I thought we’re all rapists. Why would a broad want to spend any time with a dude?
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“nonpartisan” media
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I’m sure there’s 8 more of them written to urge contacting Obama over his yearly Trillion dollar deficits.
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The Matt Lauer details:
http://variety.com/2017/biz/news/matt-lauer-accused-sexual-harassment-multiple-women-1202625959/
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This is gonna cost them.
Several women told Variety they complained to executives at the network about Lauer’s behavior, which fell on deaf ears given the lucrative advertising surrounding “Today.” NBC declined to comment. For most of Lauer’s tenure at “Today,” the morning news show was No. 1 in the ratings, and executives were eager to keep him happy.
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