Vital Statistics:
Last | Change | |
S&P futures | 2706 | 1 |
Eurostoxx index | 359.39 | -0.56 |
Oil (WTI) | 55.07 | 0.02 |
10 year government bond yield | 2.70% | |
30 year fixed rate mortgage | 4.40% |
Stocks are flattish this morning on no real news. Bonds and MBS are flat as well.
The upcoming week will be data-light, as is typical the first week of every month. Jerome Powell speaks on Wednesday, and that is about it. Productivity and costs on Wed could be interesting, but there just isn’t going to be much to move bonds.
The money for the government runs out on Feb 15 and we are back to a possible shutdown. Judging by the jobs report, it doesn’t appear the government shutdown had much (if any) effect on the overall economy. If we have another shutdown, we should probably see the same old situation of the inability to process VOEs for Federal employees, but that is it.
Rental prices for 1 bedroom apartments fell a couple of percent last year. Not sure about the methodology for the study, but it does comport with several other studies that show rental prices falling, at least in luxury areas. For the real estate sector, this is probably good news. One of the best post-crisis trades has been the REO-to-Rental trade, where professional investors and hedge funds purchased distressed foreclosures, fixed them up and rented them out. Cap rates in the aftermath of the crisis were high single digits, which were super attractive given the 0% interest rate environment. Tack on home price appreciation and you have a phenomenal trade. Unfortunately, phenomenal trades rarely stay that way, and between rising mortgage rates and falling rents, cap rates are getting squeezed, and it might be time for some of these investors to exit the trade. Ultimately that means we should see a lot more starter homes for sale which will alleviate the inventory problem we are currently experiencing.
Bill Gross is retiring from money management. The Bond King ruled the Great Bond Bull Market of 1982 – 2016 and is stepping out as we head into what should be a decades-long secular bear market in bonds.
Fannie and Fred will be released from Federal conservatorship subject to tight market-share restrictions under a new plan released by Senate Republicans. Fan and Fred would retain their role as mortgage guarantors, and would be subject to competition. “We must expeditiously fix our flawed housing finance system,” Crapo, an Idaho Republican, said in a statement. “My priorities are to establish stronger levels of taxpayer protection, preserve the 30-year fixed-rate mortgage, increase competition among mortgage guarantors and promote access to affordable housing.” That is a tall order and pretty much forecloses any sort of radical change of the housing finance system. If the social engineering aspect (affordable housing) and the subsidies (30 year fixed rate mortgage) will remain, we are pretty much looking at the same system we had pre-bubble. The model that seems to have gained the most traction is putting the government in the second-loss position, with PMI taking the first loss position. It would represent a bit of a step of re-introducing free market economics in what is one of the most nationalized housing finance systems on earth.
Filed under: Economy, Morning Report |
super bowl ratings down 5% from last year.
who won the virtue signalling bowl?
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I actually liked the Andy Warhol Burger King ad along with the Amazon Alexa ad. I thought it was CGI originally until I Googled it.
Pity they didn’t go with the Warhol quote as part of the ad.
https://deadline.com/2019/02/super-bow-ads-andy-warhol-handmaids-tale-washington-post-colin-colin-kaepernick-video-1202548695/
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This will make things interesting:
https://www.washingtonpost.com/local/va-lt-gov-justin-fairfax-denies-sex-assault-allegation-from-2004/2019/02/04/05fb0f6c-272b-11e9-ad53-824486280311_story.html
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what exactly was Gillespie’s team doing?
not oppo research.
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WaPo carefully investigated the allegations before deciding to bury the story. Good thing Fairfax didn’t like beer and keep a calendar of stuff he was doing back then, am I right?!
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I think the WAPO is using the Lewinsky standard in that dude only forced a hummer out of her and we’ve been reliably told that a hummer ain’t sex. No sex, no foul.
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Right. It’s an older code but it checks out.
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I don’t feel a Republican would be held to the Lewinsky standard, however.
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This gets better and better:
“Lt. Gov. Justin Fairfax of Virginia Denounces Sexual Assault Allegation as a ‘Smear’
By Jonathan Martin
Feb. 4, 2019
RICHMOND, Va. — Lt. Gov. Justin Fairfax of Virginia emphatically denied on Monday a woman’s claim that he sexually assaulted her in 2004, suggesting at one point that Gov. Ralph Northam’s supporters were trying to block his ascent to the governorship at a moment when Mr. Northam is besieged by demands that he resign over charges of racism.
“Does anybody think it’s any coincidence that on the eve of potentially my being elevated that that’s when this dsmear comes out?” Mr. Fairfax told reporters surrounding him in the rotunda of the state Capitol about whether he believes Mr. Northam, a fellow Democrat, was behind the accusation’s coming to light.”
Hmm. A smear that was coming out just in time to derail him. Where have I heard that before?
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Attention: Accusations ONLY to believed when made against a Republican or Conservative!
“Accusations” against Democrats are simply lies created by online troll farms in Russia. It is known.
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Northam is ok, but the Pence’s gotta go.
https://www.washingtonpost.com/opinions/its-not-just-northam-republicans-must-confront-the-bigotry-of-the-pences-too/2019/02/04/a807063c-28b4-11e9-984d-9b8fba003e81_story.html?utm_term=.945d8dc91d62
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I have been torn about Northam — about whether a single yearbook photo negates a lifetime of tolerance. But I am not torn about Mike and Karen Pence. They are figures of consequence, and their bigotry — regardless of their religious justification — has to be confronted.
The goal posts don’t just move. They’re greased and have jet engines attached!
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Perfection.
Cuomo said he and his administration are blameless. He said the continued exodus of residents from the state and a temporary millionaire’s tax created in 2009 to contend with the Great Recession (but which he’s extended since then) are not contributing factors.
https://www.newsday.com/news/region-state/state-budget-revenue-decline-1.26892647
You’d think some of these effected residents would lobby their legislators about trading the reinstatement of the deduction for something Trump wants. I wonder if there’s anything that Trump would be willing to do that over?
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Good thing they figured this out now before someone passed a 70% marginal income tax rate.
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Can’t read that article (net nanny acts as an ad blocker, so sites that want to be white listed to read, I can’t).
But found a version on AOL and love this line from that article:
But the main subject of Cuomo’s finger-pointing was the outflow of wealthy New York residents to warmer states (where they own winter homes) in an effort to escape both the cold weather and harsher tax policies that President Trump and the Republican congress have enacted.
The press is bitching about Trump’s “harsher” tax policies. It was a policy that taxed the rich. What the frack are they complaining about? Harsher. These people are all waffles!
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KW – I think that Cuomo was blaming the limitations imposed on deductions as they apply to homes, which negatively impacted Scott and Brent. I have not read his remarks, but that is the only logical explanation.
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https://splinternews.com/top-pelosi-aide-reportedly-told-health-insurance-compan-1832356368
yeah, those have been on my desk for a month.
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The article is written as if getting the entire insurance industry dead set against them would be a good idea for Democrats.
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