Morning Report: Housing starts jump despite higher lumber prices 6/19/18

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S&P futures 2752 -28
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Oil (WTI) 64.89 -0.96
10 Year Government Bond Yield 2.88%
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Stocks are lower this morning on increasing trade tensions with China. Bonds and MBS are up.

Trump threatened $200 billion in sanctions on Chinese goods, which sent global markets down and bonds up. This is in addition to the $50 billion in tariffs he threatened on Friday. Stock market investors are swapping out of S&Ps and Nasdaqs into smaller cap stocks, as they are more insulated from international trade tensions.

Housing starts improved to 1.35 million in May, which is up 5% MOM and 20% YOY. Building permits came in at 1.3 million, down 5% MOM, but up 8% YOY. Most of the activity was in the Midwest, where they increased by 100k. The Northeast was down, while everywhere else was flattish. Tariffs on Canadian lumber certainly aren’t helping. Lumber prices peaked in May and are starting to decline, but they have had quite the run. The NAHB report yesterday discussed lumber prices are hurting builder confidence.

Trump formally nominated Kathleen Kraninger to replace Mick Mulvaney as the head of the CFPB. This promised to be a contentious confirmation fight, and the usual suspects are already complaining. That may actually work out in the Administration’s favor however. The tougher the confirmation fight, the longer Mick Mulvaney can remain in place and fix some of the excesses of the Bureau. Under the Vacancies Act, Mulvaney’s term as Acting Director expires on June 22. He can remain in place while her nomination is pending. If she is defeated, he would get another 210 days. If that nominee is defeated, he gets another 210. So basically, this gambit would keep Mick Mulvaney in place until 2020.

Where are Millennials moving? Where the jobs are.

62 Responses

  1. Wapo’s Right Winger errybody.

    Liked by 1 person

    • the fact that the left reveled in this during the obama administration as a way to parry conservative objections over open borders (obama is tough on immigration, you guys!) leads me to believe the leftist outrage is highly selective…

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      • They didn’t really revel in it. Obama caught a lot of flack from the Hispanic caucus and everyone else on the progressive side blamed the Republicans for “forcing” him to do it.

        I don’t support the policy myself, and I think it’s counterproductive politically to actually getting funding for the wall or anything else so even on Trump’s own terms it’s a failure.

        But I do find it tiresome that people act as though nothing like this has happened in the past, when in reality Trump has taken a policy that was at 6-7 and turned it up to 8-9. I always wonder how much less of a reaction there would be if it was someone other than Trump executing the same policy.

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        • If Hillary had won and did the same thing, the media would be silent.

          Liked by 1 person

        • Hillary wouldn’t have done it, she ran on a “feet dry” policy so there would have been no pressure on her to crack down on enforcement. What lefties keep missing is the reaction to massive immigration. Europe is the model here (and Trump’s election as well), first the UK/Brexit is about immigration followed by Hungary, now Austria and Italy. I think Merkel’s in serious trouble as well. The point is that every immigration push cause a reaction that I think moves the Overton window in the opposite direction.

          My other point is that I don’t think this story is breaking through to your average voter. It’s summertime and no one is paying attention. Would have been better to do this (be hysterical about kids) in September. Either later this week or early next week this story will be over. All Trump has to do is pardon somebody or invite the NORKS to Mar a Lago and the story’s done.

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        • I actually don’t think that would be true. But they would give more credence to the counter argument her administration put forth to justify it.

          Liked by 1 person

        • “to actually getting funding for the wall or anything else so even on Trump’s own terms it’s a failure.”

          this is pretty much where I land on this.

          and this from below:

          “What lefties keep missing is the reaction to massive immigration. Europe is the model here”

          There’s a nugget of a truth with Trump, but he flubs the execution. the idea of migrants just coming as they see fit isn’t going to fly .. but labeling them also a potential killers and the family issue taking a winnining issue and screwing it up. but yes, progressives were never going to go for anyting other than, catch, release, and legalize.

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        • jnc:

          I don’t support the policy myself…

          What’s the alternative?

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        • keep them together in ICE facilities and processing their cases.

          if ending catch and release is the goal, anyway. which probably isn’t legal for some reason i’m ignorant of.

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        • Can’t hold the kids in detention more than 20 days. That’s why they’re removed and put in a facility while “asylum” is being adjudicated. Need a change in the law.

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        • nova:

          keep them together in ICE facilities

          My understanding is that that option is available to anyone who enters the country openly and declares for asylum at their port of entry. It is only those who are caught having entered the country illegally and, as a result of having been caught, then declare for asylum that are subject to separation.

          It is also my understanding that it is literally against the law for the US to hold the children for more than 20 days. But it takes much, much longer to process an asylum claim. So the only option is to either release the adult with the child, or release the child and hold the adult…ie separation.

          Obviously the optics of this process are not good, and it is subject to serious demagoguery. But cynical political opportunities aside, it just isn’t clear to me that there is a more ideal process if one has any real interest in enforcing immigration laws. Also, of course, we shouldn’t ignore the agency of the parents themselves. If they don’t want to be separated from their children, there are perfectly reasonable ways they can avoid the possibility.

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        • The pre-Trump status quo, which NoVA describes.

          The other issue is that there’s a good case to be made that Trump is acting in bad faith regarding asylum seekers who show up at actual border crossings. If he wanted to have an effective (meaning sustainable) crackdown without having to deal with Republicans and conservative commentators like Hugh Hewitt criticizing him, he would have done three things:

          1. Kept the non-adult children with their families while in detention awaiting the immigration hearing.
          2. Expand staffing at legal border crossings to handle the increased amount of people coming through
          3. Asked Congress to fund increased detention centers, staffing for the immigration hearings, border crossings and at the same time legislatively overturn the consent decree from the 1997 Flores settlement so that they can be held together indefinitely.

          This was a pretty good piece on the history:

          Even if he couldn’t get Congress to do that, he would be better served making a bright line between illegal and legal border crossings. Cross illegally and you are separated and charged. Go to the border checkpoint and the old policy applies.

          “which probably isn’t legal for some reason i’m ignorant of.”

          That would be the 1997 Flores settlement. Per the NYT piece:

          “Under a 1997 consent decree known as the Flores settlement, unaccompanied children could be held in immigration detention for only a short period of time; in 2016, a federal judge ruled that the settlement applied to families as well, effectively requiring that they be released within 20 days. Many were released — some with GPS ankle bracelets to track their movements — and asked to return for a court date sometime in the future.”

          See also:

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        • jnc:

          The pre-Trump status quo

          Which was either catch and release or separation (at least after 20 days). So you prefer catch and release?

          The other issue is that there’s a good case to be made that Trump is acting in bad faith regarding asylum seekers who show up at actual border crossings.

          That is entirely possible. I’m not defending Trump’s motives.

          Kept the non-adult children with their families while in detention awaiting the immigration hearing.

          I’m not sure this is possible. My understanding is that when a person is detained as an illegal immigrant, he his held by US marshals as a criminal matter. And US marshals do not care for the children of people in their custody at any point. It is only after the immigration hearing, at which point the person can choose to either be deported (joined by his children) or declare for asylum, that they might be placed with their children under ICE detention. But, again, only for 20 days in any event.

          he would be better served making a bright line between illegal and legal border crossings. Cross illegally and you are separated and charged. Go to the border checkpoint and the old policy applies.

          I thought that was the case.

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        • “Which was either catch and release or separation (at least after 20 days). So you prefer catch and release?”

          vs what’s going on now, yes. Ankle GPS tracking is probably sufficient for most of these cases.

          “I’m not sure this is possible.”

          Lack of capacity. Hence the need to ask for an appropriation.

          “Could the government keep detained families together if it chose?

          There are logistical obstacles to doing that. The nation has two centers where families can remain together while awaiting disposition of their cases, but their combined capacity is just 2,700 people; the detention system is swamped with thousands more cases than that.”

          https://www.nytimes.com/2018/05/12/us/immigrants-family-separation.html

          “I thought that was the case.”

          This is where the bad faith comes into play.

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        • “as a result of having been caught, then declare for asylum that are subject to separation.”

          Also I think this is where civil vs criminal charges come into play. I.e. the separation is mandated by criminally charging them, but if they were just detained pending the immigration status hearing without being charged criminally then they could stay together in detention.

          But I’m unclear on that.

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        • jnc:

          …but if they were just detained pending the immigration status hearing without being charged criminally then they could stay together in detention.

          I think the criminal charge is necessary as a deterrent to recidivism. A first time offense is a misdemeanor, while a second time offense is a felony (I believe). Without the initial conviction, the guy can just keep returning illegally at will without any repercussions.

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        • Piece on bad faith at official border crossings.

          https://theintercept.com/2018/06/16/immigration-border-asylum-central-america/

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        • that .. and i think a lot of our “give a crap” tanks are running on E.

          see .. the stuff the link JNC posted bothers me the most. if the law is they can present themselves and request asylum, pulling some catch-22 bullshit is just wrong. now, why they can’t request asylum in Belize, which is a must shorter walk, escapes me.

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        • “pulling some catch-22 bullshit is just wrong.”

          That’s the Trump factor. He discredits his own policies this way.

          This would be a lot more defensible if he was directing more resources to process legitimate claims at the same time as cracking down on illegal crossings.

          But that’s not his goal. It’s stopping all of it. He’s acting in bad faith and not faithfully executing the laws. It’s the mirror image of Obama’s DACA and DAPA work permits.

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        • jnc:

          This would be a lot more defensible if he was directing more resources to process legitimate claims at the same time as cracking down on illegal crossings.

          Agreed. Although I suspect the number of “legitimate” claims pales in comparison to the number of claims that are actually made or even accepted. As nova noted, legitimate asylum seekers are supposed to seek asylum in the first country they come to. That means that unless they are Mexicans or Canadians, their claim is almost certainly not a “legitimate” one. They are far more likely seeking to get into the US than they are seeking to simply get out of their home country.

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        • @scottc1: “Also, of course, we shouldn’t ignore the agency of the parents themselves. If they don’t want to be separated from their children, there are perfectly reasonable ways they can avoid the possibility.”

          I think that’s the heart of it. It’s like getting angry at the hardware store for selling hammers when someone buys one and hits himself in the head with it. Why is that the fault of the hardware store?

          The parents play a very significant role in creating this situation. We aren’t sending troops into Mexico to force families to come to the border and be separated.

          Like

        • KW:

          I think that’s the heart of it.

          I agree, and the fact that virtually no one is talking about this simple truism tells me that the whole thing is being played for cynical political points.

          Liked by 1 person

  2. NYT on Lesko:

    In contrast, the Republican National Committee, the National Republican Congressional Committee and the Congressional Leadership Fund, the primary House Republican super PAC, each poured hundreds of thousands of dollars into the race. The investment proved critical in what became an unexpectedly close race.

    I just don’t know if that’s true, though. There’s no real way to prove that “money = votes” in any race, and at some point the constant ads and robo-calls have to become counter-productive. I’m very dubious of this metric, although I understand why the media never wants to even hint that buying ads doesn’t work.

    Like

    • Hillary Clinton had all of the money in the world, and the media was providing billions of in-kind marketing. She still lost.

      Liked by 1 person

      • Indeed. It seems to me once you have name recognition and gets news coverage, additional spending is of limited value, and may even be counter-productive. People get tired of constant harassment during election season and often tune out. There’s a point where alerting people to the fact there is an election and where the polls are and who the candidate is can help, I’m sure, but there’s a point where if you can’t pull it off spending $1 million you’re not going to do any better spending $2 million.

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  3. It’s a good point.

    I’m still literally cannibalizing infants because Net Neutrality ended.

    Like

  4. The recent events have given me a new appreciation for Obama’s strategy of outsourcing certain functions that the US public finds distasteful.

    – Close down black sites and return to relying on partner countries for interrogation via rendition.

    – Pay Mexico to stop illegal immigrants at their southern border rather than having to deal with it at the US border.

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  5. This is hilarious:

    Like

  6. Good piece on how the Obama administration tried to detain families together and was blocked by the courts:

    https://www.nbcnews.com/news/latino/failed-experiment-immigrant-family-detention-n403126

    Like

    • i suppose the end of catch and release will be a benefit, if successful. but no way the issue freak out ends if we’re detaining families together. it will go from family separation is evil to detention is evil.

      but don’t call us in favor of open borders.

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      • I disagree. There won’t be as good of a set of video and audio images and the comparisons to Obama’s policies will be more direct.

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        • hmm. ..so it get relegated into the progressive outrage machine and off the front pages? that’s probably true.

          Like

        • Like

        • There’s another advantage for Trump:

          If a court overrules his plan to keep the families together, he has a more direct target to blame when they go back to splitting them up.

          But I think that:

          A. Trump will litigate this all the way to the SCOTUS.
          B. The SCOTUS will rule in his favor.

          Liked by 1 person

  7. Modern Agitprop

    Liked by 1 person

  8. I think from Trump’s perspective, this is exactly what he wanted:

    “El Salvador warns migrants against traveling to the U.S.
    by Anna-Catherine Brigida and Joshua Partlow
    June 20 at 3:49 PM

    SAN SALVADOR — One of El Salvador’s top diplomats on Wednesday described conditions at shelters for migrant children in the United States as “totally inadequate,” blasted the Trump administration’s family-separation policy and warned that migrants should seriously consider any decision to travel north.

    https://www.washingtonpost.com/world/the_americas/el-salvador-warns-migrants-against-traveling-to-the-us/2018/06/20/1e704802-0b50-4b67-8d61-03f4386c3f8c_story.html

    Liked by 1 person

  9. The want a civil war.

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  10. Heh

    I had forgotten about this.

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    • I’ll put this in the bin with “this whole thing is still fishy and sounds wrong”. Meaning I doubt that remotely encompasses what happened.

      And I’m also suspicious about “Russian cyberattacks”. Meaning what? Portscans? Not remotely a “cyberattack”. And nothing to stand down against. Independent actors trying to deploy ransomware? Those are Russian entrepreneurs, probably. Or could have been China going in through Russian VPNs.

      Or are they referring to people in Russia buying social media ads?

      Alas, I can’t read the article its based on. Work filters have gotten pretty aggressive.

      Like

  11. https://splinternews.com/lone-hero-reportedly-calls-stephen-miller-a-fascist-at-1827014663

    This is fascinating to me. Pretty sure had you heckled actual fascists in power, the result is much different.

    Like

    • I always thought the idea of calling fascism “right wing” was wrong. Fascism is just right wing socialism.

      If you made a continuum of ideologies the way the left likes it:

      Comie – Socialism – D Socialism – D party – R party – Libertarian – Fascism

      and then plotted a y axis with state control, you would have a gradually declining line until libertarianism, and then a massive spike at the end as we hit fascism. If “right wing” direction means “less state control” which is how we consider it, this continuum makes no sense. The basic difference between socialism and fascism is that instead of the state owning the big corporations, it allows them to be private however they are more or less controlled by the government.

      It should be

      Commie – Socialism – Fascism – D Socialism – D party – R party – Libertarian

      Like

      • ” If “right wing” direction means “less state control” which is how we consider it”

        I don’t think that’s synonymous at all.

        Like

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