Morning Report: No changes to GDP

Vital Statistics:


Last Change
S&P futures 2926.25 8.25
Oil (WTI) 59.03 -.35
10 year government bond yield 2.02%
30 year fixed rate mortgage 4.02%


Stocks are higher this morning on news that the US and China will resume trade talks over the weekend. Bonds and MBS are flat.


The third revision to first quarter GDP was unchanged, coming in at 3.1%. Inflation was revised upward ever so slightly, from a core PCE rate of 1% to 1.2%. At this stage of the game, the markets are going to focus on weak economic data, not inflation data. Note the Atlanta Fed is forecasting that second quarter GDP will come in at 1.9%.


Initial Jobless Claims remain low, rising slightly to 227,000.


Donald Trump continues to criticize Fed Chairman Jerome Powell, even going as far as to tweet that ECB President Mario Draghi is better. While it is unlikely Trump would try and fire Powell (or demote him), the legal principle of Fed independence will probably make that difficult.


The VA will now guarantee loans that exceed the conforming loan limit. Veterans will be able to borrow above the $484,350 limit without any down payment. This impetus for this decision was to raise money for veterans who have health issues after being exposed to Agent Orange. The initial idea was to raise the VA loan fee by 15 basis points, however lawmakers decided to raise the funds by increasing the cap.


A new report by Barclay’s and Annaly Mortgage lays out a post-conservatorship world for the US residential real estate finance market. Lawmakers generally agree on the goals of housing reform: protect the US taxpayer, attract private capital, and create a more competitive landscape. Getting there is going to be more difficult as Democrats and Republicans have different priorities. The report looks at things the Administration could do unilaterally via executive order. The first would involve FHFA ordering the GSEs out of non-core markets, such as second homes, jumbo and investor loans. The second would involve the creation of a revolving credit risk transfer facility. A third would involve removing the “GSE patch” which allows Fannie and Fred to originate QM loans at DTI levels private lenders cannot. Finally, there is work that needs to be done at the SEC / SIFMA level that concerns private label securitizations. Ultimately the issue of what to be done with GSEs will have to be solved legislatively. Either they become converted to Federal Government utilities or they become privatized. The privatization route envisions breaking up the duopoly into much smaller guarantors.

37 Responses

      • Parole in place enables a soldier serving in Afghanistan, for instance, not to worry that a spouse at home who entered the U.S. illegally might be thrown out of the country while the soldier is deployed.

        Why is this happening? I mean, might be a good incentive for people to go into the military. But why would a legal immigrant have an illegal immigrant spouse? And how common is that?

        Big take-away is that no group is ‘safe’ any longer.

        There is a safe group: those who immigrate legally. Naturalized citizens. Those who don’t overstay their visa or are otherwise here legally. All those groups are safe.

        “The military is very international, and if you got rid of everybody in the military who had a connection to a foreigner — you wouldn’t have anyone in the military.”

        If you did this thing that NOBODY is talking about and NOBODY is going to do, then you wouldn’t have a military.

        NPR. So disappointed in you.


        • The US is already deporting actual combat vets, Kev.


        • Mark:

          The US is already deporting actual combat vets, Kev.

          If Congress doesn’t want actual combat vets to get deported, it should pass a law exempting them from immigration laws. Until it does that, what’s a president supposed to do…simply ignore the law?


        • The US is already deporting actual combat vets, Kev.

          How does that happen, exactly? Isn’t there supposed to be a path to citizenship baked into for vets? Are they not taking advantage of it or aren’t qualifying or something. That being said, if you’re referring to my last statement:

          If you did this thing that NOBODY is talking about and NOBODY is going to do, then you wouldn’t have a military.

          I was referring specifically to this statement, as quoted: “The military is very international, and if you got rid of everybody in the military who had a connection to a foreigner — you wouldn’t have anyone in the military.”

          Nobody is talking about getting rid of everybody in the military who has a connect to a foreigner. That statement wouldn’t be true even if they used the term “illegal immigrant”, but the whole statement is nonsense as it is. Almost everybody has some sort of connection to a foreigner somewhere in their life at some time.

          It’s like saying if we put everybody who ever watched a crime show in jail, we’d all be in jail. While true, it’s basically nonsense because that’s not something that’s ever going to happen.

          Similarly, nobody is talking about getting rid of everybody in the military who has some sort of connection to a foreigner. My argument is a pedantic one over semantics, I guess, but seriously.


  1. This is great:

    “Cocaine bust on Brazilian plane and looming typhoon add more drama to already tense G-20 summit

    Drugs were discovered aboard a Brazilian government plane at a refueling stop en route to Japan

    By Damian Paletta ,Seung Min Kim and Terrence McCoy
    June 27 at 10:19 AM

    OSAKA, Japan — The Group of 20 summit in Japan was already expected to be high on intensity and drama.

    And that was before a cocaine bust and the approach of huge storm that was barreling toward the venue.

    Brazilian President Jair Bolsonaro promised an “immediate investigation and severe punishment for the person responsible” for attempting to bring nearly 40 kilograms of cocaine on one of his government’s planes headed to Osaka for the summit. There appears to be little precedent for such a drug bust on a government jet ahead of one of these summits.

    On Tuesday afternoon, Spanish police arrested a member of the Brazilian air force, who was on the advance team for Bolsonaro’s trip to Japan to attend the summit, during a refueling stop in the southern Spanish city of Seville. Spanish customs officials found 37 packets of cocaine, weighing 86 pounds”


  2. The feminists are coming after your grill.

    “The dubious masculinity of grilling

    Why “manning the grill” is one of our most stubborn gender stereotypes.
    By Rebecca Jennings
    Jun 28, 2019, 7:00am EDT ”


    • “But even with the knowledge that gender is fluid”
      oh lord.


      • “And according to the Hearth, Patio & Barbecue Association(!)”
        also, they were a client. with a woman heading up their GR shop. so there!


    • “A 2015 essay for Slate by Jacob Brogan functions almost as a mea culpa for his love of grilling. “I’m uncomfortable with the pleasure I take in something so conventionally masculine,” he writes, which is very funny whether he means it to be or not. “Looming over the coals, tongs in hand, I feel estranged from myself, recast in the role of suburban dad. At such moments, I get the sense that I’ve fallen into a societal trap, one that reaffirms gender roles I’ve spent years trying to undo. The whole business feels retrograde, a relic of some earlier, less inclusive era.”

      man card revoked, effective immediately. proceed directly to the kitchen and begin work on the salad


      • The reason why feminists will never win in the long run is that when men get sick of them, they can just go to the country bar for non-feminist women.


        • Or Thailand.

          Hell, Boystown in Nuevo Laredo would do it.


        • As a side note, Clayton Williams was a good ol boy governor of Texas that Ann Richards defeated. He did have a great line during the campaign however. For whatever reason Williams answered a reporter’s question about rape or something that he didn’t understand the motivation because it’s easier to go to Boystown in Laredo, like he did. Well, Richards just goes to town on this remark and drags Williams for it. When a reporter got a chance to ask Williams what he thought of Richards remarks, William said he wondered what she was so upset about since it was she who endorsed his check.


        • Claytie was never Gov – just the R nominee. I voted in the R primary for Tom Luce, but when Claytie beat him I voted D.

          I still think Luce would have been a great Gov. Claytie somehow beat Luce and Hance in that primary and it was one of those deals where Claytie should have just kept his mouth shut after that. He led Ann by maybe 20 points in early polling but just kept running his mouth.

          When GWB ran against Ann four years later he was a complete gentleman, which permitted him to build his campaign rather than tear it down.


        • Fourth wave feminism: “how come nobody wants to hang out with us?”


        • That was it, thank you! Claytie was fucking awesome and would have been a blast as a governor. Ann Richards was just a complete downer and absolutely no fun at all. She reminded you of your first wife, chronically bitchy and emasculating. There’s a reason she was a one termer.

          Liked by 1 person

        • Yep, that was one of his biggies.


      • That’s how the patriarch starts, grilling then beating your spouse then raping anything that moves then bestiality. When you’ve perfected that, then you can run for office and use the power of the State to suppress dumb bitches.


  3. Progressives come clean on why they really don’t like Biden – they are afraid that he actually can work with Republicans:

    “Progressives worry that Biden’s theory of change is real

    This all lacks the emotional punch of a school busing or Iraq War dispute.

    But it speaks to a very real concern progressives have with Joe Biden, which is that his talk of bipartisanship and getting things done isn’t just unrealistic — it’s actively pernicious.

    What if, in a desire to show he’s getting things done and healing the country post-Trump, Joe Biden agrees to advance a lot of bad bills? The same day as the debate, for example, a clutch of 17 moderate House Democrats sent a letter to bank regulators urging a laxer approach to derivatives regulation. And this kind of thing happens all the time, where some kind of corporate interest legislation manages to attract the support of a dozen or two House Democrats who have ties to the interest at stake.

    The Obama White House mostly — though not universally — pushed back against this stuff. But if they’d decided not to, they would have “gotten more done.” There would have been less fighting and more dealmaking in Washington. And they probably could have even gotten a progressive priority or two through in the mix.

    The Obama administration could, in short, have seen the fiscal cliff deal as a model rather than as a weird one-off. And that’s potentially how Biden sees it and how he plans to govern — a much more important point of contrast with his more progressive rivals than speculating about the differences in hypothetical health care plans.”



    worth a read. basically the arugment i’ve been making at the PL .. what is the limiting principle on immigration.


  5. Classic New York Times. It uses data showing the Democrats moving drastically to the left to label the Republicans “far right”.


    • Not even that.

      To calculate these scores, we used a statistical technique called correspondence analysis, analyzing how frequently the party platforms mention each topic coded by the Manifesto Project. Each mention of a particular category pushes the party’s score to the left or the right.

      In statistics and modeling of highly subjective things, this tends to mean: we massaged the numbers until we got the result we wanted (i.e., the result that intuitively made sense to us).

      This sort of thing is largely meaningless because they are using entirely arbitrary things to make their determination, and they themselves are biased in terms of what constitutes “far right” and “far left”.


    • The scoring has a built in bias against everything on the right, especially free enterprise, patriotism, and morality. So, like I said . . . it’s just smoke-and-mirrors-and-bs-statistics to reach the conclusion they already wanted to reach.


      • Kev – SF banned facial recognition software so street cameras cannot be used for positive ID, and some other liberal left bastions are following. My guess is that any problem facial recognition software has in terms of accuracy can be fixed by the programmers. Of course, maybe the bank robber lobby is behind this and only using inaccuracy as a scare tactic to get what they want. License plate recognition is probably next.

        Fighting for privacy is tilting at windmills.


        • Face recognition can be fixed. It’s already extremely robust. The problem is how it can be used to track people in high-cam areas. Thus violating privacy. Not sure how that will shakeout—I can’t imagine a great argument for refusing to use facial recognition to track down a serial murderer on the loose. But using it to track jaywalkers and average citizens would not likely go over well.

          Similar questions can be raised about Ring doorbells getting networked and used to catch crooks. There’s going to be legislation about how doorbell footage can be used before too long.


      • KW:

        The scoring has a built in bias against everything on the right…

        That’s definitely true, but regardless of whether the left/right characterization of the metrics is accurate, what they show is that Republicans have remained relatively consistent while Democrats have moved radically over the last 20 years. That seems to substantiate exactly what I have been arguing right here for several years…the seeming polarization of American politics has resulted not from R’s moving drastically to the right, but rather from the D’s moving drastically to the left.


        • I do not disagree. But the supposed metrics drive me nuts. They are basically cherry picking “platforms” to make that assertion, and even if they were objectively ranking platform planks, which doesn’t reflect the moderation (or liberalization) of numerous GOP politicians, or reflect how uninterested National GOP politicians are in homosexual marriage or abortion when it comes to crafting legislation, or how many in the GOP apparently find themselves to the left of Trump on issues like immigration and diplomacy and nationalism.

          So even if the rankings weren’t biased, ignoring everything about the parties except platform language is next to worthless in terms of making an actual assessment of extremism.

          That being said, I felt the Democrats ride a roller coaster. Wilson was a super-totalitarian progressive who thought nothing of the country’s founding. Well to the left of Truman for sure. Then we get tax-cutting anti-communist JFK followed by Great Society LBJ. Then we get Carter, then Clinton, then Obama. Which doesn’t exclude the insane lurch to the left the Dems took with McGovern and are poised to take again this cycle.

          … I think it may be less how far to the left Dems have slipped than it is that it doesn’t matter how far to the left the Dems lurch, the intelligentsia will labor to craft a narrative that paints their extremism as moderate, their quasi-communism as the political center. Because that is a self-evident truth, to them.


  6. Wait, I thought Trump already cancelled all future elections?


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