Morning Report: Small business optimism remains elevated

Vital Statistics:


Last Change
S&P futures 2667.5 28
Eurostoxx index 345.14 5
Oil (WTI) 51.55 0.25
10 year government bond yield 2.89%
30 year fixed rate mortgage 4.72%


Stocks are higher this morning on hopes of a trade deal. Bonds and MBS are down.


There were 7.1 million job openings as of the end of October, according to the BLS. This was largely unchanged from September. IT and real estate had the biggest increases in open positions. The quits rate fell by 0.1% to 2.3%. The Fed pays close attention to the quits rate as it historically has presaged wage inflation. The JOLTs report does echo what we saw out of last Friday’s employment situation report – the job market is still strong, however it is beginning to cool down a touch.


Small Business optimism slipped ever so slightly in November, however it remains at multi-decade highs. A tight labor market remains one of the biggest issues, with a scarcity of “qualified” – i.e. not just “skilled” labor as a major issue. A net 34% of all small businesses are increasing wages, a historically robust number.  While labor markets are generally tight, there still is a large number of people who are on the older side, who probably do want to work, but are unable to find jobs. Getting them back into the economy is needed in order to raise potential GDP, which acts as a speed limit on the economy.




Mel Watt’s term running the FHFA is up in January, and it looks like Mike Pence’s Chief Economist Mark Calabria is the front-runner to replace him. Calabria is a Libertarian, which will be sure to upset affordable housing advocates. Mel Watt was considered to be an ideological kindred spirit of the affordable housing lobby, and he allowed Fannie Mae and Freddie Mac to increase their footprint in the mortgage market. Calabria will probably side with Republicans who want to see the GSEs reduce their influence, and will probably look to tighten requirements, increase guaranty fees, and lower eligible loan sizes. This of course assumes Congress does nothing about GSE reform, which is probably a safe assumption.


Funding for the government expires on Dec 21. Trump and the Democrats are negotiating over funding the wall. Government shutdowns generally do not affect the financial markets – as much as they bother the Washington Post, Wall Street does not care. That said, the last time we had a shutdown, originators were unable to get tax transcripts out of the IRS, so plan ahead.

23 Responses

  1. While the notion of an 800 mi wall built on US soil cutting off Texan access to the Rio Grande is ludicrous and in some places [See the Big Bend] a monumental engineering problem, Ds could probably afford to cave and waste the money if they got DACA in return, as their Latino internal critics would probably be silenced.

    I have decided to refer to the sitting President as “Individual 1” or “1” for short.

    IMHO, Ds should stick with their current border security offer until “1” shows them the MX commitment to pay or reimburse the cost.

    Yes, I have gone beyond merely skeptical of ALL of them on this “issue”.


    • What about all issues? 🙂

      That being said, I have nothing against a wall conceptually. In the abstract, it seems like a good idea to me. However, I don’t live in Texas, New Mexico, Arizona or California, and in such cases the devil is always in the details.


      • I don’t understand how Pelosi believes that Trump’s wall is immoral but her fencing and extra security are moral. If both are designed to keep people out, and neither are lethal (versus, say, land mines and snipers) is the difference effectiveness or aesthetics?

        Liked by 1 person

        • I don’t understand how Pelosi believes that Trump’s wall is immoral but her fencing and extra security are moral.

          I don’t believe that NP is a moral arbiter. She was the one who wanted to name an impeached and removed federal judge who somehow got elected to Congress as Homeland committee chair when he could not even be security cleared by the FBI.

          But a rational person might say that urban fencing plus rural electronic surveillance, drones, more BPs, etc. would be cheaper and more effective than a wall. A rational person might even say that urban fencing plus the desert is cheaper and more effective.

          Morality is just a political sales pitch for NP.


        • Trump is for it, and her base loathes Trump and everything he stands for.

          It isn’t any more complicated than that.

          Liked by 1 person

        • Open borders is an abstract thing they want, and anything that seems to militate against that they see as racist and jingoistic. Gated neighborhoods are much more concrete, and protect them personally from the people coming over the border, as well as rednecks or other deplorables. So, clearly, entirely merited.


        • if immigrants voted (R), obama would have proposed a 100 foot titanium southern wall as part of his stimulus bill..

          this is all about diluting the hated WM vote


  2. I have recommended it before, but I just listened to the audiobook version again, and I recommend it again:

    Good Calories, Bad Calories is, at one level, about how carbs are likely responsible for the diseases of civilization and certainly for obesity. Essentially, the vast majority of people cannot grow fat on a diet free from carbs, no matter how many calories they eat, and a similar diet is a good way to release fat (but also why cholesterol is not an indicator of heart disease risk, and a bunch of other similar things).

    The meta-argument, made directly about nutrition but could easily apply to anything–such as climate science–is that the popular conception of science and the way those who call themselves scientists represent themselves is very much at odds with the reality.

    To whit, there has been scientific evidence that obesity is caused by carb consumption, as well as all sorts of metabolic diseases, that carbs are the main nutrient behind heart disease and cancer (where nutrients are the relevant factor), and that “balanced diet” style diets rich in carbs will make you fat, and semi-starvation “balanced” diets ultimately fail. Also, lots of evidence that high-fat, high-protein diets do not cause high cholesterol over time, or increase risk of heart disease or any other disease. That even malnutrition diseases, such as rickets, are a product of relevant carb consumption. And so on.

    Yet the “scientific community” and “nutrition scientists” have reached a consensus that fat is bad, a balanced diet includes lots of “good carbs” and that overweight is just a problem of gluttony, and no further study needs to be made on how carbohydrate stimulation of insulin production affects fat metabolism, and insulin’s role in fat storage and fat retention. Ergo, they already known that the Man Made Global Fattening is caused by juicy steaks and scrambled eggs and lots of cheese. And lazy, gluttonous white people.

    There is evidence that carbs have a role in the development of high blood pressure that outweighs any influence of salt (and in all cases, the author gets into the science of why this is so).

    It’s a long book. But it is great on how the science of nutrition is, in many ways, not science. It provides a perfect example as to how the “consensus” serves to suppress studies and even long-known data that conflicts with the consensus, and how much politics and persona, emotional convictions of certain people ended up creating the official “consensus”. Also, as to how the studies conducted are designed to test for an expected end result, but not for things that might provide evidence against the consensus assumptions.

    Of course, it doesn’t help that most of the studies end up being funded by corporations and institutions with a vested interest in carbs not being the cause of most of the disease of civilization.

    To whit, there were studies done a hundred years ago that provided a great deal of evidence as to the deleterious health effects of grains and sugars. From the 20s through the 60s, a great deal of evidence was developed as to the nature of fat deposition and insulin’s role in making you fat and keeping you fat–and insulin is very much a carb-responsive hormone. And so on.

    It’s a great book for those interested in how the official line on cholesterol and obesity is almost entirely wrong, but it’s an even better example of how “science” is as prone to manipulation, self-deception, personal-promotion, magical thinking, and religious belief as anything else in human life.


    • Thanks Kevin, I’m going to check this out.


      • Dude doesn’t apply the lesson with a hammer–and never once mentions climate science, although I feel the process he went through in terms of reviewing the studies and literature and noting what had actually not been done and how politics and personal dogma distorted what has come out from the FDA and in the national news would kind of obviously apply.

        It is a big book, and dense. Worth it for the nutrition data and context, but the subtext of “science” as being very frequently imperfect and driven by dogma and emotion rather than fact comes through loud and clear.


    • I just finished “it all starts with food” and the idea of the Whole 30. Thinking about doing it in January, but haven’t made up my mind. The idea of living off of kale and eggs for a month sounds pretty hideous.

      I suspect the culprit in weight gain isn’t so much what we eat – it is what we drink. Booze, Starbucks coffee loaded with sugar and dairy, sports drinks, soda etc can add up to another meal.


      • re: the whole 30. I’ve done that. it’s really about eliminating sugar. and although i’ve never gone through withdrawal, it has to to be similar. and it’s sucks, but it worked.

        that said, I did it with my wife. and dudes are just different. i went from a 36 to 34 inch waist in a month. and she didn’t have the same experience. so if it’s a family thing, be prepared for different results and the blowback.


        • oh. and eliminating the processed food, which si pretty much required on the whole 30 will change your palate and tolerance for stuff.

          like a frozen pizza. they taste like salt licks now. just can’t. and those sugar drinks, like a starbucks mocha .. I can’t do it. i’ll be in can 10 minutes later.


        • wife is already vegan, so she wouldn’t partake. It sounds like such a pain in the ass that all you eat is salad for a month.

          that said, the part about getting better sleep / eliminating aches and pains sounds pretty good.


        • that said, I did it with my wife. and dudes are just different.

          They are indeed. Testosterone has been demonstrated to help with leanness and reducing fat deposition, while estrogen promotes fat deposition in some places and not in others, and mildly contributes to general leanness (depending). Post menopause, women tend to get thicker even if they don’t change their diet because of hormonal shifts, not because they are consuming more calories (although some may).


      • Diabetes specialists have been warning against cheap carbs for 25 years or so. Cheap carbs are sugar and refined starch and booze, but especially beer, because beyond alcohol it has maltose which hits the bloodstream fast.

        I am lucky because I do not have a sweet tooth, but OTOH I really like bread. I don’t have diabetes but the work of those specialists is behind most low carb diets, so I know about it.

        I used to diet by not drinking beer. Period. Takes a little more effort now. I have often cut out foods I like, like potatoes, to modify my weight over time, but I have never gone on a “diet.”
        Steak, green veggies, and salad I can eat forever. Eggs, the lower sodium cheeses, and milk are AOK for me. Oatmeal and fruit are AOK too, BUT NOT JUICE. No fiber in juice makes it as fattening to me as cola.

        I do eat fruits and oatmeal. I never add sugar to anything. And for other reasons I eschew salt – my BP is very sensitive to it. Salt makes me bloat. But if I only eat at home, and eat well for a week, I will lose weight. The difference is probably the amount of salt and processing in restaurant food. Almost all restaurant food tastes salty to me. Chinese is the worst, and I miss it.

        Obviously YMMV.

        Note to Kevin: I think the “war on fat” that was funded by the sugar industry in the 70s is over and almost everyone is recognizing that while there may be problems associated with eating “too much” animal fat, weight gain is not one of them.
        Apparently the phony war on fat was picked up by one medical “expert” who got the ear of the federal government. You should google it.


        • Good Calories, Bad Calories gives the full history. Although he wasn’t alone, and there were a number of people on the “fat is bad” bandwagon. He does a deep dive into the press, the studies, the literature, and general history. I’d mention the guy’s name but I’m bad at remembering names.

          There was a lot of pressure to be on the “fat is bad” bandwagon, too. Hypothesis that diverged from it (or the “it’s overall calories, all calories are the same”) argument tend to get discredited.

          Liked by 1 person

      • The culprit tends to be carbs, as far as what I think we actually know. Sugar (glucose + fructose) and corny syrup (same, but with more fructose) being particularly pernicious. But all dietary carbs are converted to glucose in the blood stream and stimulate insulin secretion. Insulin encourages the body to burn glucose rather than triglycerides (fatty acids), metabolize glucose to turn to fat (often with depleting glucose we might otherwise use for energy, making us tired but also making us hungry) AND promotes the deposition of fat into adipose tissue, all while suppressing the release of triglycerides from stored fat (thus, making it less likely that your body will burn some stored fat for energy, even though it could use it).

        Since I have gone up in down in overweight all my adult life, I can tell you it’s not primarily what you drink–as I rarely imbibe caloric drinks. But I do love those frackin’ carbs. Like Mitch McConnell loves cocaine.

        The argument of the book (and it’s different paradigm entirely, so I’m still not sure I’ve entirely eternalized it) is that over-consumption is a non-issue, it’s the hormonal effect on the body of what we consume. And in some rare case, these same effects can be seen from genetic hormonal disorders, or lesions on the hypothalamus.

        The real recommendation is that we need real studies, as all the currently done studies on obesity are worthless, as are the planned ones.

        In terms of diet strategy, the argument would seem to be: don’t secrete insulin. Don’t eat carbs or sugars. Don’t walk by bakeries (the smell of carbs can stimulate insulin production, which even if there is little blood glucose to metabolize, can inhibit your ability to access stored fat for energy), exercise, and eat lots of protein and fat.


      • Brent:

        I suspect the culprit in weight gain isn’t so much what we eat – it is what we drink.

        I have found a pretty good weight-loss plan: Move to the UK.

        I’ve lost over 15 pounds in the 2 months I’ve been here without really trying. It’s down to 2 things. First, I am walking everywhere, including to and from the office every day, which amounts to about 10k per day. Second, the food isn’t nearly as good here, so instead of eating things because of the taste, which used to mean I ate until whatever I had was gone, I eat until i’m not particularly hungry anymore, and then stop, which means I leave half eaten meals all the time. I’m literally down 2 notches on my belt.


  3. Fucking Russian stooge whore.


  4. Interesting look inside the SJW left


Be kind, show respect, and all will be right with the world.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: