Vital Statistics:
Last | Change | |
S&P Futures | 2647.0 | 7.8 |
Eurostoxx Index | 389.5 | 3.1 |
Oil (WTI) | 57.6 | 0.9 |
US dollar index | 87.3 | 0.0 |
10 Year Govt Bond Yield | 2.38% | |
Current Coupon Fannie Mae TBA | 102.625 | |
Current Coupon Ginnie Mae TBA | 103.625 | |
30 Year Fixed Rate Mortgage | 3.92 |
Stocks are higher after a strong jobs report. Bonds and MBS are down small.
Jobs report data dump:
- Payrolls up 228,000
- Two month revision up 38,000
- Unemployment rate 4.1%
- Labor Force participation rate 62.7%
- Average hourly earnings up 2.5% YOY
Overall a strong report, and probably good for the markets. The modest wage inflation will keep the Fed cautious, while slack continues to be taken up. That said, a rate hike is more or less a certainty next week. We probably won’t see any big pickup in wage inflation until the labor force participation rate gets back up to the 65% – 66% level.
In other labor news, job cuts increased slightly according to outplacement firm Challenger, Gray and Christmas, while initial jobless claims fell to 236,000.
Consumer sentiment edged up slightly in November, according to the University of Michigan survey.
Congress came up with a deal to keep the lights on for two weeks. The debt ceiling will have to be raised at some point, although the government can use cash on hand and other extraordinary measures to get through until Spring. Expect to see some conservative Republicans to balk at additional spending, which makes bringing aboard some Democrats a necessity. A deal with Democrats will involve an equal hike in defense and non-defense spending as well as some sort of immigration deal. A shutdown doesn’t seem to be in the cards, at least not yet.
With all the commotion going in Washington right now, it is easy to forget about housing reform, but Bob Corker and Mark Warner are beginning to come to a consensus over what the future of housing finance should look like. Fannie and Fred will remain, but the government will make it easier for new competitors to enter the market. Jeb Hensarling of Texas has moderated his stance on government guarantees of mortgages, which helped move things along. The goal is to keep the mortgage market more or less as-is for borrowers, while increasing competition in the secondary market and bolstering taxpayer protection. In one wrinkle, the Fannie Mae preferred shareholder might get some sort of recovery. The prefs were up 24% on the news, while the common fell slightly.
The FHA will no longer insure mortgages for properties that include Property Assessed Clean Energy (PACE) assessments.”FHA can no longer tolerate putting taxpayers at risk by allowing obligations like these to be placed ahead of the mortgage itself in the event of a default,” said U.S. Department of Housing & Urban Development (HUD) Secretary Dr. Ben Carson. “Assessments such as these are potentially dangerous for our Mutual Mortgage Insurance Fund and may have serious consequences on a consumer’s ability to repay, or when they attempt to refinance their mortgage or sell their home.” Dave Stevens of the MBA also welcomed the decision.
Ginnie Mae is tightening requirements on securitizations in order to combat the high prepayment speeds that the securities have been experiencing. They targeted VA IRRRLs last year by making IRRRLs that refinanced a loan less than 6 months old ineligible for standard securitizations. Ginnie is now including cash-out refis and FHA streamlines as well. Some MBS strategists have predicted that this will weaken demand for the higher coupon Ginnie Mae securities, which would mean that borrowers get less and less of a pickup in points for going higher in rate.
Filed under: Economy, Morning Report |
This is funny.
https://hotair.com/archives/2017/12/08/reuters-jobs-report-means-dont-need-gop-tax-reform-know/
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Looks like the state and local tax deduction is going to get watered down
https://www.cnbc.com/2017/12/08/gary-cohn-talks-state-and-local-tax-deductions-in-gop-tax-plan.html?__source=twitter%7Cmain
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Would be funny if they stick it to the people they most need, the rich.
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one of the things that caught my attention is the expansion of 529 plans to elementary and high school (and homeschool)
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Meaning for private schools?
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yes. you could withdraw from them without penalty for private elementary/high schools. and probably other forms of eduction.
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Interesting in retrospect:
https://www.thedailybeast.com/al-frankens-1999-book-saw-him-resigning-from-office
Almost like Louis CK and his TV show.
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I had no idea that the El Niño and La Niña weather patterns were caused by global warming, er, climate change.
http://www.dailymail.co.uk/news/article-5163041/California-braces-high-winds-wildfires-continue.html
And they say Trump will say anything.
Question, does Brown really believe this, or is it just boob bait for the rubes?
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He believes it. This shit is a religion for people…
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As everything was once caused by “the gods”, now everything is caused by Gaia. Offended by our environmentally unfriendly practices, Climate Change will punish us with forest fires and tornados and whatever else bad happens. Earthquakes? Climate Change, baby!
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Cause the Cultural Revolution was all about due process, yo.
https://mobile.twitter.com/MeetThePress/status/939862563382276096
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If you can’t get off on this then nothing can get you off.
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WTF?!?!
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Not everybody with a badge and gun should have either. He got acquitted but he definitely doesn’t need to be a cop anymore.
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KW:
He got acquitted but he definitely doesn’t need to be a cop anymore.
I seriously don’t know how you acquit that guy. If that is a legal police killing, then there is no such thing as an illegal police killing. That was little different from an out-and-out execution.
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Unfortunately, the default position of the overwhelming majority of people in the world is that the Authority is always right and that the Authority is always acting in good faith.
Maybe that’s how you maintain an orderly society, I don’t know.
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Fuckin’ A right it is.
https://www.salon.com/2017/12/11/gop-tax-bill-a-new-mechanism-for-reinforcing-white-power/
Next step is repealing the 13th and 14th Amendments.
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Uh-huh. These people are literally deranged. At every level, I think.
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If only:
“It can be understood as a Malthusian effort to kill off the “useless eaters,” with the goal of creating a social-Darwinist dystopia where the amount of money a person has is taken as the ultimate indicator of human worth.”
I’m thinking that if that’s the goal, it’s not going to succeed. Because nothing screams “kill off the useless eaters” so much as doubling the standard deduction for non-itemizers.
Then there’s this:
“Voters are not rational.”
If that’s the case in aggregate, then democracy as a theory is fundamentally flawed.
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jnc:
If that’s the case in aggregate, then democracy as a theory is fundamentally flawed.
It surely is, although then we revert to Churchill’s law.
https://www.goodreads.com/quotes/267224-democracy-is-the-worst-form-of-government-except-for-all
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This should be interesting vis-a-vis Franken:
“Sexual harassment should be treated as a hate crime
By Sally Kohn
December 11 at 6:00 AM”
https://www.washingtonpost.com/news/posteverything/wp/2017/12/11/sexual-harassment-should-be-treated-as-a-hate-crime/
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