Morning Report: Job openings up 8% 4/13/18

Vital Statistics:

Last Change
S&P futures 2676 12.5
Eurostoxx index 380.54 1.72
Oil (WTI) 66.97 -0.24
10 Year Government Bond Yield 2.83%
30 Year fixed rate mortgage 4.42%

Stocks are higher after it looks like cooler heads are prevailing in a trade war with China. Bonds and MBS are down.

Donald Trump told his aides to explore re-joining the Trans-Pacific Partnership trade deal after withdrawing early in his administration. Does this mean “re-negotiate?” Unclear, but that would encounter heavy resistance. Still, it is better than throwing around tariff threats. Markets are breathing a sigh of relief.

Job openings were little changed at 6.1 million in February. They are up almost 8% YOY however. The quits rate was stuck at 2.2%. The quits rate is a metric the Fed invariably mentions in their analysis of the job market and wage inflation. A higher quits rate usually presages wage inflation. Construction and manufacturing had big increases in openings.

Consumer sentiment slipped in the preliminary April reading. Market volatility could be driving it, however higher gas prices could be playing a role as well.

Acting CFPB Head Mick Mulvaney appeared before the Senate Banking Committee yesterday, and noted that Dodd-Frank only requires him to appear, not answer questions. Jeb Hensarling made a crack about the Chairman could sit and play Candy Crush in front of Congress if he wanted to. Mulvaney did answer questions, however he was making a point about how little accountability the agency has, and perhaps a point from his memo earlier – that the CFPB would follow the law, but go no further. The big question for the CFPB is the status of the PHH case. If that goes to SCOTUS, the only one that has standing to defend the agency is the Administration.

Wells Fargo reported earnings, and it looks like they have been affected less by higher rates than other independent bankers. Mortgage origination was down 19% QOQ, which is simply seasonality at work, but they were only down 2% YOY. As you would expect, the purchase business is a higher percentage, and it looks like they were able to maintain flat YOY growth by getting more aggressive in the correspondent channel. The price of that was a sizeable drop in margins – 31 basis points.

JP Morgan saw a more typical drop, with originations down 19% YOY. The servicing portfolio fell as well. Citi reported better earnings on equity trading.

Californians may get to vote for a divorce from each other – to separate the state into 3 separate ones. One will contain the coast between LA and SF, another will be Northern CA, and the other will be Southern CA. As of now, LA and SF basically control the whole state, and there is a big conflict between the coastal environmental types and the farmers who supply something like half of the US’s agricultural output. Still, given that Democrats control the state and the ag belt will probably vote R, this probably isn’t happening.

26 Responses

  1. Coastal CA took the water from inland CA. I’m sure inland CA would want to secede just to build dams and spillways. However, if the overwhelming number of voters live on the coast they will never approve partition until the coast is operating on desalinized sea water.

    Liked by 1 person

  2. This is good:

    “If you read a criticism of Facebook, try subbing in the word “printing press” and see if it still makes sense. —Tyler Cowen

    Father of modern printing Johannes Gutenberg appeared before the seven Prince-electors of the Holy Roman Empire Tuesday to discuss data privacy and disinformation disseminated using his invention. Below are excerpts from the hearing.

    Gutenberg: We believe that we need to offer a Bible that everyone can afford, and we’re committed to doing that.

    Duke of Saxony: Well, if so, how do you sustain a business model in which users don’t pay for your service?

    Gutenberg: Prince-elector, we print indulgences.”

    And a Vox writer weighs in:


  3. Serious error by the USDA-SDNY?

    I responded to the WaPo story on the RNC fund co-chair and the bunny as follows:

    Can the Post explain how this news became public? It seems to me that if it was leaked from the materials lawfully seized from Mr. Cohen that it would have been subject to the privilege until a judge ruled otherwise.

    All of Cohen’s materials will have to be ruled on in camera as to whether they are indeed privileged.

    Please tell me this leak did not originate in the office of the USDA for the SDNY.

    Liked by 1 person

    • Error or tactic?

      Liked by 1 person

      • The WSJ broke the story. Their article refers to source as

        …according the person familiar with the matter.

        That would rule out a leak from say, a nosy assistant district clerk, I think, but not either the FBI or the USDA’s office. It might signal an independent source close to Broidy, and I hope it does. Because if it came from the USDA’s office it was a monumental blunder that could get the entire Cohen investigation thrown out.

        No leaks ever have come from Mueller’s team, but as soon as a case was sent outside – wow.

        Another possibility I would hope is not the case is a false flag operation to stifle the Cohen investigation.

        In any case, I want the WSJ and the WaPo and CNN to pick up on the ethics concerns before the day is out.

        Liked by 1 person

        • UPDATE: I am told that Daniels’ lawyer hinted at this story weeks ago. Perhaps it was known in other circles.

          Liked by 1 person

        • So this did not come from the USDA-SDNY, and I am glad for that.


          Michael Avenatti‏Verified account @MichaelAvenatti

          In last 18 mos, Mr. Cohen negotiated yet another hush NDA, this time on behalf of a prominent GOP donor who had a relationship with a LA woman, impregnated her and then made sure she had an abortion. The deal provided for multiple payments across many months. #basta

          It was known in the underworld of bunnies, I guess.


    • not a lawyer, and don’;t get what you are talking about…



    This is .. well. it’s going to keep some of us in our bunk for quite some time.


  5. Interesting read:

    Liked by 1 person

    • Excellent link, JNC. Food for thought. Does not account for much of the polarization of today, but to the extent style and words count for anything it accounts for a bit. The bit I think it accounts for is the suspicion of motive that many conservatives hold for many “progressives” and I think rightly so. The reverse is true, as well. Many self proclaimed progressives are quick to dismiss everyone else as grit in the gears of progress.

      The arguments by right should be about prioritizing problems and posing solutions, private, local, public, national, whatever. I remember how McCain and Bradley in 2000 characterized having the same twenty problems on their list but in very different order, and with different approaches to solution; often market vs. government.

      Instead we largely have knee jerk suspicion of motives as paramount. This blog at its best offers ideas.

      Liked by 1 person

    • Liberalism is a policy viewpoint. Progressivism is a religion…

      Liked by 1 person

    • I’m worried about the influence New York will have of Chick Fil A

      Liked by 1 person

    • Brent, I read that painful article. I think cows with “Eat more chikin” signs are clever, even after all these years.

      I am convinced that abortion is the most divisive issue in America. Would there have been another issue as divisive if Roe had been decided differently? SS Marriage is nothing compared to abortion.

      Liked by 1 person

      • Guns are getting there…


      • Mark:

        Would there have been another issue as divisive if Roe had been decided differently?

        I doubt it. You’ve heard me say it before but I think Roe has been a toxically transformative boil on our politics. The faster we are rid of it, the better.

        Liked by 1 person

  6. Fucking word up!

    If you’re alive in a decade, it will be because you’ve figured out how to forage locally.

    Dude wrote this is ‘08. Embarrassed to say he’s from my Alma Mater.


    • “Guy R. McPherson is a professor of conservation biology at the University of Arizona.”

      OK, what is “conservation biology?” Is it a science? Or is it environmental activism tarted up with a sciency-sounding name?


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