Morning Report: Possible shutdown

Vital Statistics:


Last Change
S&P futures 2478 -8
Eurostoxx index 335.75 -0.92
Oil (WTI) 45.53 -0.35
10 year government bond yield 2.79%
30 year fixed rate mortgage 4.60%


Markets are lower this morning ahead of what will be a 4 day weekend for most. Bonds and MBS are flat.


Hopes for a deal to avoid a government shutdown were dealt a blow yesterday when President Trump said he would veto any budget that does not include funding for the wall. The Wall is a political non-starter for Democrats, which means we have a problem in the Senate. That said, unless Santa needs FAA approval for his Christmas Eve run, I suspect not too many people are going to notice if the government shuts down over the weekend.


Separately, Trump abruptly announced a withdrawal from Syria, and General Mattis has retired in protest.


The VA adopted new policies regarding refinancing and the required net tangible benefit to veterans. The biggest change will concern seasoning of loans before refinancing. A loan is considered seasoned after 6 monthly payments have been made, or 210 days since the first payment. Under previous guidance, loans which did not meet these requirements were ineligible for traditional Ginnie Mae pooling. Now they are uninsurable.


We have some economic data out this morning. The third revision to Q3 GDP was unchanged at 3.5%, while consumption was taken down very slightly from 3.6% to 3.5%. Durable Goods orders rose 0.8%, while the Index of Leading Economic indicators came in stronger than expected. October’s LEI were revised downward however. Economic growth definitely is slowing from its midyear pace, and Q4 forecasts are around 3%.


Home Affordability hit a 10 year low, as rising rates and home prices are not being offset quickly enough by rising wages. “Home affordability is getting worse nationwide,” says Daren Blomquist, senior vice president at ATTOM. But buyers shouldn’t lose hope. “We’re going to hit an affordability tipping point in 2019, where it becomes more affordable to buy. Buyers will have more inventory to choose from and they will be running against fewer multiple-offer situations.” Of course all real estate is local, and not all areas are overvalued or undervalued. You can see that big parts of FL, TX and the Pacific Northwest are overvalued, while the Midwest remains affordable. The chart is courtesy of CoreLogic.


Corelogic overvalued



32 Responses

  1. The latest round of triggering from the Mattis resignation is something to see.

    Trump as a crazy warmonger, etc for wanting to withdraw US troops from Syria and all the lefties are now lining up to oppose that and side with the bipartisan establishment about the need to keep US troops in Syria.

    Liked by 1 person

  2. Breathtaking.

    “We’ve been thinking that as the walls close in around Trump, we would have a ‘Wag the Dog’ scenario where he starts to lash out,” said Derek H. Chollet, a top Pentagon official in the Obama administration. “But it won’t be getting us into wars — it will be the opposite.”

    Liked by 1 person

    • “announced that the United States would pull 2,000 troops out of Syria, without consulting allies or warning Congress.”

      Those troops in Syria being something that Congress never authorized in the first place.

      He’s out of control, stopping wars everywhere.

      Liked by 1 person

  3. Just a quick reminder, if the government shuts down, rape becomes legal during the duration.


  4. This is a trend I’ve noticed for a while.

    Also, who else is engaging in cannibalism during The Shutdown? It can’t be just me.


    • McWing:

      Also, who else is engaging in cannibalism during The Shutdown?

      Good idea. It’ll be excellent practice for me for the coming Brexit apocalypse during which, it has been confidently predicted, medicine, food, and all other essentials will no longer be available in the UK.

      Liked by 1 person

  5. The #Resistance has been reborn as a bunch of market strategists…


  6. Merry Christmas and Happy New Year to all of you; stay warm and dry.


  7. This article is wild.

    Mature adults can control their emotional lives at work and focus on the job. They don’t have to think about it.

    They see their co-workers as just that, co-workers—even friends, even people fun to be around. But they don’t spend their workdays thinking about them as sex objects, or about their bodies.  Most men are mature adults.  And therefore, they have nothing to worry about.


    • McWing:

      This article is wild.

      I wonder if this women is being deliberately obtuse, is suffering from some kind of cognitive dissonance, or is just plain stupid. Getting struck by lightening is at least as rare women falsely accusing someone of sexual harrassment or assault, but that doesnt mean you shouldn’t avoid walking around outside in a thunderstorm.


      • Why in God’s name would any man stick his neck out and take this risk of being in a situation to get falsely accused and ending one’s career? He’ll never work again.

        For what upside? Nothing.

        Sorry ladies, I don’t owe you a thing.

        Liked by 1 person

    • Come in to my parlor, said the spider to the fly.



    I had wondered about “standing” but when the Justice Department withdrew the defense, I figured the Judge just blew right by it. But I had not studied the matter like Adler – after all, he co-wrote the lead amicus brief AGAINST ACA in the Supremes, IIRC, and the commerce argument that the majority accepted as cutting against the IM was from the Volokh guys.I mean, nobody knows the ACA’s legal issues like those guys, so if Adler says standing is in quicksand, I will bet that it is.


  9. Merry Day after Christmas, gentlemen!


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

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