Morning Report: An anticlimactic decision

Vital Statistics:


Last Change
S&P futures 2794 -14.75
Eurostoxx index 364.5 -2.58
Oil (WTI) 59.81 -0.86
10 year government bond yield 3.21%
30 year fixed rate mortgage 4.98%


Stocks are lower this morning on no real news. Bonds and MBS are up.


As expected, the Fed made no changes to monetary policy yesterday. The language in the statement was almost identical to the September release, with some small changes regarding the deceleration in business fixed investment. Bonds didn’t have much a of reaction to the decision. The December Fed Funds futures contracts are handicapping a 76% chance of another 25 basis points next month.


Initial Jobless Claims ticked up slightly to 214k last week. The labor economy continues to plug along.


A lack of housing inventory translates into a “new normal” for home sales, which is about 1 million units less per year than the pre-bubble days – in other words, the early 2000s, before the big jump in sales driven by the bubble years. The problem is that household formation has outstripped homebuilding for over a decade, and if you correct for population growth, we are still way below what is needed.


home sales


D.R. Horton reported earnings yesterday that missed street estimates and the stock was rocked to the tune of 9%. Earnings were up 41%, but on the call, DHI CEO David Auld said the market was “choppy” and noted some “momentum slipping from the market.” D.R. Horton focuses on starter homes, so this is worrisome given that luxury is already struggling a bit. The whole sector is struggling this year, with the homebuilder ETF down 25% from its high set earlier this year.

33 Responses

  1. Heh


    • WTF? I don’t know if Whitaker is better or not, but Sessions 80s-era drug war crap has needed to go. Also, his unwillingness to route out the fifth columnists at the DoJ is probably a little too old school, but I expect the marchers are all for entrenched lifelong bureaucrats remaining at the DoJ in perpetuity, so I get that, at least.


    • “in support of”

      No, it’s always in opposition to what Trump is doing at the moment, no matter what it is.

      Same protest, different day.

      Liked by 1 person

  2. There are reasons I have a hard time taking hardcore ideological partisans on either side seriously (the folks on the right mischaracterizing the Acosta kerfuffle with the earnestness of Don Lemon telling us we need a Final Solution to America’s whiteness problem being one example).

    This is an example of why the left bugs me more, and more evidence that the tribalists only care about power for their side, and all the moralizing and supposed principals can be dispensed with or ignored whenever its convenient for tribal victory.

    Surely, this is as big a deal as the first Muslim women getting elected. Right? Right? Bueller?


  3. Re: Acosta: Everybody is out of the f****ing minds.

    No, he didn’t assault her. No, he didn’t manhandle her.

    No, the Whitehouse did not release an intentionally doctored video to barely accelerate the “karate chop” by one or two frames to “make it appear more violent”.

    Yes, he is a douche who is ultimately disrespectful to the press secretary and the rest of the Whitehouse press corps by making everything about him. No, I don’t give two shits that he got his credentials revoked. He doesn’t contribute anything to reportage or journalism.

    But there are Zapruder-like frame-by-frame films of this video now, with commentary and “explanation” of how it was obvious violent assault or how the videos were clearly heavily doctored “to create the illusion of violence” or whatever.

    People are out of their damned minds.


  4. Astounding stat: 50 million apartments (or 20% of the housing stock) is vacant in China


  5. Worth remembering that this happened right before Armistice Day.

    “Red Flags Over Germany
    By Sean Larson

    One hundred years ago today, radical sailors, soldiers, and workers in Germany rose up to put an end to the carnage of World War I. And the revolutionary upheaval had only just begun.”

    For once, Jacobin isn’t engaging in hyperbole about the role of socialists and communists in a historic event.

    Liked by 1 person

  6. FYI – NoVA

    “Epistocracy: a political theorist’s case for letting only the informed vote”

    Liked by 1 person

  7. I think Americans want divided government so that things move slowly [in any direction]. Sort of how practicing lawyers like minimalist appellate judges because the law becomes more predictable.

    Probably the public as a whole would be OK with reforming ACA the way Alexander’s Committee proposed. Probably the public as a whole would be OK with visible infrastructure projects. Probably the public as a whole would be OK with a merit based immigration system with an allowance for refugees coupled with border, port, and visa enforcement. The thing that would work best for moving undocs out would be E-verify, but too many employers hate it.

    Joe Manchin suggested that the D House go there [except for E-verify, which is my hobby horse] first and visit with McConnell and POTUS to see how much of that can be done. Before the subpoenas fly.

    I am willing to bet they try to burn it down with subpoenas first, that nothing happens, and that the Ds lose any popular advantage they currently hold. Not so much because they are Ds – in the reverse situation, that’s what Rs did – but because Party trumps nation.

    Liked by 1 person

    • Sanders has a similar take:

      “Q:So far what I’ve been reading about the intention of the Democrats in the House is that much of it is focused on investigations; we have 64 subpoenas we want to drop, and —



      A: Look, people can chew bubble gum and walk at the same time. Democrats can do that. And if all they’re going to do is investigate Trump, that would be, in my view a very, very serious mistake. I think finally we are going to have oversight over Trump’s behavior. And I think investigations are absolutely appropriate. But simultaneously, people who are making $11 an hour are not worrying about investigations. People who have no health care, or can’t afford prescription drugs, are not worried about subpoenas. People who can’t afford to send their kids to college are not worried about another investigation. So it would be a tragic mistake in my view if all the Democrats did is focus on investigations. They must, must, must go forward with a progressive agenda to win the support of the American people.”

      Liked by 1 person

    • I think the system provides for divided government and gridlock structurally, thus it works almost exactly as intended and that is, in fact, it’s great virtue.


    • Mark,

      I think Americans want divided government so that things move slowly [in any direction]

      I’ve only ever met one person who claims to actually want this. And given the relative lack of power individuals have over the makeup of the government, I think what Americans actually get in government is not necessarily a good indicator of what they want.


      • I’ve only ever met one person who claims to actually want this

        I never meant anyone who claimed it. It’s just how Americans actually vote, much if not most of the time.

        Liked by 1 person

        • America as a collective entity is a very different thing from America as individuals.


        • Mark:

          I never meant anyone who claimed it.

          I was actually thinking of jnc. I think he has said as much in the past.

          It’s just how Americans actually vote, much if not most of the time.

          I wonder how many Americans actually do vote this way. I imagine that the vast majority of both R’s and D’s vote the party line in most elections. I even suspect most independents vote in an ideologically predictable manner. I would guess the number of voters who regularly jump from one party to the next in different elections is relatively small, which is why it is only a relatively small number of districts and states that end up being “swing” districts/states. And a small number of voters, and a small number of individual races, can end up having big impacts on the ultimate results.

          As I intimated earlier, I think it is a mistake to interpret the results of elections as being the result of intention or desire. I doubt very many Americans “want” divided government, even that is what they end up with pretty regularly.


        • Well, there used to be more people like me who split their tickets all over the place, I guess. Although I did it because I usually actually knew the local guys [or women] and as you know I thought many were honest and some were not, and some were fools or unqualified. Also, I really didn’t get into the ideology thing, myself.

          I thought our old Land Commissioner, Patterson

          was just plain better than his opponent any time he ran for anything. He was an unwavering conservative who believed in open carry and opposed elective abortions but who never pandered to anyone and as Land Commissioner never did giveaways nor took any crap from anyone and Texas ended up with more wind power than any other two states put together and with more beach erosion protection against tidal intrusion than any other coastal state. In 2010 the D running against him was in a debate with him on TV and Patterson suddenly said “you don’t actually know what the job is about, do you? Spend a week looking over my shoulder now and then if you win you will know what to do.” The D took him up on it, and after the D lost the election he wrote an op-ed thanking Patterson.

          If I had lived in NY I would have voted for Moynihan. I voted for GWB for governor but not for POTUS and I voted for Kay Bailey Hutchison because I knew her life story and her since the first day of Law School. I voted for Bentsen for Senator, too. We have an R Senator who looks after Texas, Cornyn, and one who doesn’t, Cruz. I had appeared before Cornyn when he was TX Supreme Court CJ and I had written amici at his request when he was AG. Mark White was a D Governor of TX who was an actual friend, whose only real interest was better schools, whose son went to school with my oldest daughter. Andy was always a smart personable kid who became a successful businessman. Well Andy White got beat in the D primary this time by a seeming political illiterate Lupe Valdez [she was the “progressive”, first Chicana Lesbian Sheriff of Dallas County – she did understand law enforcement issues, I’ll give her that]. I would have voted for Andy but I didn’t vote for Valdez.

          I actually think the more one knows the candidates the LESS likely one is to vote Party and that voting straight party is a symptom of how detached most straight party voters are from knowing the candidates. Convenient label.

          But ticket splitting is different than willing divided government. I think Kev’s earlier note to the effect that our federal and state constitutions tend to favor divided government, I think because they are so full of roadblocks to tyranny, actually, is as good a reason as any for why it occurs.


        • Mark:

          I actually think the more one knows the candidates the LESS likely one is to vote Party and that voting straight party is a symptom of how detached most straight party voters are from knowing the candidates.

          If by “knows” you mean in some personal capacity, I totally agree, which is one reason why districts should be much smaller and the House should be much larger. But it is the rare person who has had any personal interaction with candidates at all, much less the degr that you seem to have had.


        • I wonder how many Americans actually do vote this way.

          Clearly, all of them. 😉

          Meaning that, collectively, America votes for gridlock. Very few may actually be voting for gridlock or split-power, but that is fairly consistently what happens, the Democrats 40-year reign over the house being the big exception to that . . . at least when Dems were in the Whitehouse.

          I feel like Mark is saying that it turns out to be what the American electorate as a collective entity “wants” or “votes for”, not necessarily what individual voters have in their minds.

          But again, my argument is that voters serve a purpose in terms of refreshing the halls of power with new blood and preventing single-party or strong-man domination of the government, mostly. They do not and generally cannot know enough about how individual candidates will vote, interact with their parties, the legislation they will consider, and the primary and secondary and tertiary consequences of that legislation. And the collective manifestation of that seems to be a bias towards split-power or gridlock, at least in the electorate as a whole.


        • KW:

          what the American electorate as a collective entity “wants” or “votes for”,

          Collectives don’t “want” or “vote for” anything. Individual people do.

          I realize this sounds pedantic, but it is a pet peeve of mine because I do think it matters. Attibuting motives and actions to the collective is a way to ignore or bury the fact that a great many people, oftentimes even most people, do not actually want what the collective is “doing”. It lends legitimacy to things that is not necessarily deserved.


        • It’s a semantic argument. When we say “the American people want”, we’re either expressing a hope or opinion that a large coalition wants or will do something, or saying that outcomes indicate a particular group behavior. We tend to associate behavior with intention, thus we say “this group wants” or “that group wants” or “we as Americans want”.

          And I see the expression of “the country voted for” or “the Republicans voted for” or “this coalition voted for or supports” as entirely defensible constructions. It’s a way of describing events or trends or outcomes in a way that is generally understandable to the listener, even if not atomically accurate at the quantum level. 😉

          That being said: It lends legitimacy to things that is not necessarily deserved.

          I get that. And you’re right. Although, in a democracy I think the verbiage is entirely defensible and even useful. But like many things, it does not presents a full pictures, and ignores the parts and pieces in favor of the whole. And when those parts and pieces are individual human beings, that can be misrepresentative and lead to ugly outcomes.

          Also, my response is equally pedantic.


  8. This is what I’ve been fucking asking!

    Kee-rist! White broads are the worst!

    Liked by 1 person

  9. But Trig Trutherism and the mysteries of Sarah Palin’s womb was not a rabbit hole.

    Maybe sit this one out Dr. Sullivan,OBGYN

    Liked by 1 person

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