Vital Statistics:
Last | Change | |
S&P Futures | 2658.0 | -20.0 |
Eurostoxx Index | 368.8 | -6.1 |
Oil (WTI) | 60.8 | -0.2 |
US dollar index | 83.8 | -0.2 |
10 Year Govt Bond Yield | 2.84% | |
Current Coupon Fannie Mae TBA | 102.313 | |
Current Coupon Ginnie Mae TBA | 102.531 | |
30 Year Fixed Rate Mortgage | 4.4 |
Stocks are lower this morning on news of a possible trade war. Bonds and MBS are flattish.
Donald Trump has announced plans to impose 25% tariffs on steel imports and 10% tariffs on aluminum imports. The dollar has weakened in response, and we have seen bond yields fall as well. He characterized trade wars as “good” and “easy to win.” As a general rule, nobody wins trade wars – they depress economic growth – but the silver lining is that you are seeing a bit of a flight to quality, which means Treasuries have a bid for once. This is pushing rates down. Don’t know how long it will last (he may be bluffing, or someone will probably talk him out of it), but take advantage of it. I could see him re-thinking and abandoning this idea over the weekend, and we could be looking at a 2.9% 10 year on Monday.
Consumer sentiment was flat in February, according to the University of Michigan Consumer Sentiment Survey.
Jerome Powell’s testimony in front of the Senate wasn’t all that dramatic. The main subjects were wage growth (or the lack of it), fair lending, and regulation. Elizabeth Warren spent her time harping on Wells Fargo. These events are mainly for political posturing and not much else. One Senator asked him about climate change, which Powell took in stride. I was hoping he would ask the Senator to lay out the connection between the Fed Funds rate and atmospheric CO2, but alas he played it straight.
On the subject of the labor market and wage growth, he said that nobody really knows what full employment actually is. The unemployment rate suggests that we are, while wage growth and the labor force participation rate suggest we are not. His view is that if you take all of the data, we are probably at or very close to full employment. He did say that the Fed has been modeling something like a 25 basis point annual decline in the labor force participation rate due to demographics – i.e. the retiring Baby Boomers, and that it has now caught up with that demographic model.
Acting Director of the CFPB Mick Mulvaney said yesterday that the Bureau will rely more on state AGs when deciding on enforcement actions. He reiterated the plan to spend resources on cases that are on “solid legal ground” and less on “creative claims.” Regulation by enforcement is also on the way out, and the CFPB intends to be much more forthcoming in telling the industry what the rules of the road are.
Elmer Fudd says we are in a bond market bubble.
Filed under: Economy, Morning Report |
Kos kids pissed at FBI again.
https://www.dailykos.com/stories/2018/3/2/1745964/-Inspector-General-report-finds-McCabe-at-fault-in-providing-information-to-reporter#comments
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A liberal goes to CPAC
https://www.wsj.com/articles/a-hillary-staffer-goes-to-cpac-1519949987
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Was just listening to the GLoP podcast, and Jonah Goldberg characterized CPAC as being TPAC (the T standing for Trump), as apparently never-Trumpers were not welcome in the conservative fold. Which seems odd.
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Matt Schlap runs CPAC, his wife Mercedes works in the WH Communications Office. Probably will be the next Communications Chief.
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Also, frackin’ pay walls.
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wooo!
https://bearingarms.com/patrick-r/2018/03/01/100k-m1-garands-to-be-released/
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Fucking weapons of war!
SMDH
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you’ll never hit your target if you’re S[Y]DH
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Hmm. I could use a M1911.
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Ahh the progressive left. We oppose guns so even though we don’t sell guns we are now going to stop selling Camelbak water containers to protest guns.
https://www.washingtonpost.com/news/morning-mix/wp/2018/03/02/gun-boycott-rei-mountain-equipment-co-op-stop-selling-major-outdoor-brand-due-to-its-weapons-sales-nra-ties/
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freedom of association for me, but not for thee.
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also, it’s a damn mystery on why people stockpile.
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The rationale there is poor.
People have hands that can hold guns. They should stop selling things to people with hands. There’s a thought problem for them!
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Counter Narrative!
https://www.theblaze.com/news/2018/03/01/condoleezza-rice-stuns-the-view-audience-with-amazing-story-about-2nd-amendment-rights
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CA real estate is out of control
https://www.mercurynews.com/2018/03/02/sunnyvale-home-shatters-new-record-with-enormous-price-tag/
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Interesting story:
http://thehill.com/opinion/campaign/376328-could-federal-watchdog-tamper-with-trump-wiretap-evidence-it-may-not-be-a#.Wph_EKcMuf0.twitter
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Christ. That’s an $80,000 house here.
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I was born in Santa Clara, CA and we lived there until 1974. My dad worked first for IBM then for HP. When he sold the house in 74, he made so much money he bought our house in Phoenix with the proceeds.
We had a friend from Santa Clare move to Phoenix in the ‘90’s and she sold her house in Santa Clara for over a million. She bought it in the mid ‘60’s for around $30k.
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JFC
http://thehill.com/homenews/senate/376548-lindsey-graham-war-with-north-korea-would-be-worth-it-in-the-long-run
Bummer he didn’t win, hunh.
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I am following Brent’s advice and waiting on DJT to change his tune on tariffs.
“Never speculate in advance of the facts.” – Holmes, Sherlock
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No power since Friday… hoping for it to come back overnight..
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Sorry dude, hang in there!
Scott, how are you Gus doing?
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I lost power for a few hours on Friday, but it was restored fairly quickly. The power cut did something to my furnace, and I had no heat for a while even after the power was restored, but by Saturday afternoon it was fixed.
I’m lucky because on my cul-de-sac the power lines are underground, so when we lose power it is because something happened on the main road to which my road connects, and that is a major line of power for both Stamford and New Canaan, so they usually fix it fairly quickly. A lot of people on back country roads can wait for days for the power company to get around to fixing it, if there are only a few customers on that line.
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Why you make me hit you?
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Lulz
http://www.businessinsider.com/muellers-hit-list-targets-trump-may-indicate-criminal-enterprise-2018-3
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