Morning Report: Housing starts disappoint again

Vital Statistics:

 

Last Change
S&P futures 3009 0.35
Oil (WTI) 59.54 -0.07
10 year government bond yield 2.09%
30 year fixed rate mortgage 4.12%

 

Stocks are flat as bank earnings continue to come in. Bonds and MBS are up.

 

Another month, another disappointing housing starts number. Starts fell from an annualized pace of 1.3 million to 1.22 million in June, according to Census. Building permits were a mixed bag, falling to 1.25 million, however May’s numbers were revised upwards. Both starts and permits were below street expectations.

 

Despite the disappointing housing starts number, builder confidence rose one point to 65 in July. Demand remains strong, however labor shortages, few buildable lots and rising construction costs are making it difficult to build at the lower price points, where the demand is particularly acute.

 

Mortgage applications fell 1.1% last week as purchases fell by 3.8% and refis rose 1.5%. Rates increased, with the 30 year fixed rate mortgage rising by 8 basis points to 4.12%.  “Mortgage rates increased across the board, with the 30-year fixed rate mortgage rising to its highest level in a month to 4.12 percent, which is still below this year’s average of 4.45 percent,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Coming out of the July 4 holiday, applications were lower overall, with purchase activity slipping almost 4 percent. Refinance applications increased, with activity reaching its highest level in a month, driven mainly by FHA refinance applications. Historically, government refinance activity lags slightly in response to rate changes.”

 

Bank of America reported strong earnings this morning. Mortgage origination volume was up 56% YOY to $18.2 billion.  Separately, Quicken announced they originated $32 billion in the second quarter.

 

Second quarter growth in China fell to 6.2%, the lowest level in 27 years. The implications for this will revolve primarily around inflation and Fed policy. The Chinese economy has a real estate bubble of epic proportions, and once that bursts it will have ramifications in the urban high-end market, but it will also be felt in lower inflation numbers. China will probably try and export its way out of the slowdown, although tariffs will make it difficult. That said, a slowdown in emerging Asia and Europe will usher in even lower interest rates.

 

 

38 Responses

  1. The argument that Trump knows exactly what he’s doing:

    “Trump vs. “the Squad”

    Trump reunited the Democrats to further his narrative.
    By Ezra Klein
    Jul 16, 2019, 9:30am EDT”

    https://www.vox.com/policy-and-politics/2019/7/16/20695031/trump-ocasio-cortez-omar-pressley-tlaib-pelosi-squad

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    • From Klein:

      There’s a reason conservative media focuses relentlessly on Ocasio-Cortez, and to a lesser but still disproportionate extent, Tlaib and Omar. Vilifying nonwhite, female members of Congress…

      Two of the three, AOC and Tlaib, are in fact white.

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      • They wouldn’t consider themselves white and I’d suspect a majority would agree with that.

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        • so much for privilege

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        • jnc:

          They wouldn’t consider themselves white…

          I wonder how they fill out the census.

          The U.S. Census Bureau must adhere to the 1997 Office of Management and Budget (OMB) standards on race and ethnicity which guide the Census Bureau in classifying written responses to the race question:

          White – A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.

          Black or African American – A person having origins in any of the Black racial groups of Africa.

          American Indian or Alaska Native – A person having origins in any of the original peoples of North and South America (including Central America) and who maintains tribal affiliation or community attachment.

          Asian – A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.

          Native Hawaiian or Other Pacific Islander – A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.

          https://www.census.gov/topics/population/race/about.html

          …and I’d suspect a majority would agree with that.

          What race(s) do you think they are? If Ezra doesn’t think they are white, what race does he think they are?

          If race is important as they and Ezra think it is, it is pretty crucial that we get this correct, don’t you think?

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        • Hispanic in AOC’s case and Arabic in Tlaib’s.

          I suspect they will write in other in the census.

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        • jnc:

          Hispanic in AOC’s case and Arabic in Tlaib’s.

          Those aren’t races.

          I suspect they will write in other in the census.

          Perhaps. Do I get to be a “person of color” if I pretend that I am “other” too?

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        • Ask Rachel Dolezal.

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        • I think her mistake was to be too specific. She claimed to be black. Had she just claimed to be the utterly meaningless “woman of color”, she just might have been ok.

          If people of Spanish heritage get to be “non-white persons of color”, can people of Italian origin do the same? If not, why not? Shouldn’t the Italian Nancy Pelosi get to be a “non-white person of color”?

          If people of Palestinian origin get to be non-white “persons of color”, can’t people of Jewish origin do the same? Ben Shapiro…person of color! Are Iraqis non-white “persons of color”? How about people from Turkey? Greece? Bulgaria? Where exactly is the border between the white race and “non-white persons of color”?

          This is so confusing, trying to figure out what exactly qualifies one as a “non-white person of color”!

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        • What about Iranians, the original Aryans?

          I smell trouble.

          By the way, I just heard Spinal Tap’s Big Bottoms on Sirius XM’s Ozzy’s Boneyard!

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        • “Those aren’t races.”

          Only if you consider the OMB to be the authoritative source here.

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        • jnc:

          Only if you consider the OMB to be the authoritative source here.

          Is there an authoritative source that defines Hispanic and Arabic as races?

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      • They aren’t generally considered white in the mainstream, but they should be. Or Irish and a Italian should be separate races. Hispanic was classified as a race for State and federal reporting back in the 90s and earlier when school districts were required to report race. Then Hispanic became “ethnicity” and became a yes/no column. Then race (following the OMB).

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        • KW:

          They aren’t generally considered white in the mainstream…

          Perhaps, but I would wager that, if AOC committed a crime, and police asked witnesses to the crime to describe the perpetrator, 95% of them would categorize her as white. Quite literally the only characteristic she possesses that makes her a “non-white person of color” is her name. If her appearance and biological make-up was completely unchanged, but her name was Alexandria DeNiro instead of Alexandria Occasio-Cortez, she’d be white.

          This “person of color” business is meaningless nonsense.

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        • I don’t disagree. But the OMB classifications are nonsense anyway. They lump every Asian into one race (which the various Asian races themselves certainly don’t), amongst many other very arbitrary definitions of race.

          In the current era race is mostly a classification used to call other people racist. That is the point of race in the present. Ironically, it’s used the same as it ever was—to assign one group inferiority and another superiority, just the reasoning has changed. Rather than racial genetics and secondary race characteristics defining the inferiority, it’s the much more amorphous and ephemeral idea of superior group having the proper moral and intellectual position on “race”, while the inferior group does not.

          Also similar to the older eras of scientific and Eugenic racism is that the rationale for their bigotry is still entirely fictional. Only instead of being dependent on things they didn’t know about brains and genetics, it’s based on things they cannot know about what people think and believe.

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        • A huge chunk of Hispanics consider themselves white as do a big number of Arabs.

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        • ” describe the perpetrator, 95% of them would categorize her as white.”

          No, they’d say she was Hispanic or Latino.

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        • jnc:

          No, they’d say she was Hispanic or Latino.

          Maybe, but I doubt it. Perhaps my powers of observation are not what they could be, but I don’t think that there is anything about AOC’s appearance that makes her obviously Hispanic. It is equally plausible to me that she could be Italian, Greek, Iranian, Palestinian, or any number of other things. (Swedish wouldn’t be my first guess, I will grant you that.)

          I’m not sure if the distinction on why he did it matters.

          I am. I think words become offensive precisely and only because of how are they intended.

          Same as Alec Baldwin calling someone a fag because he’s pissed at them for taking his parking space. Doesn’t change the nature of the slur itself.

          Trump didn’t use any racial language, much less a slur. He basically said that they aren’t real Americans. That may be offensively tribal, but it isn’t racist.

          In this case, it’s close enough for me to count it as a racist line (or if you want to be generous, “racially charged”) especially since three of the four were born in the US…

          So if Trump had stipulated that he was only talking about Omar, that might change your view a little? I’m skeptical.

          …so it only makes sense in the context of saying that doesn’t matter, they are still disqualified from being Americans.

          That is exactly correct. And why exactly is he suggesting they are disqualified from being Americans? Because of their race? No, not at all. Because of their offensive political views. Telling people they are not real Americans because of their political views may be obnoxious and offensive, but it isn’t “racist”.

          I don’t feel a need to somehow prove that Trump is a full on classic racist to condemn him.

          I don’t either. But nor do I feel justified in condemning Trump as a racist just because he’s obnoxious. If I am going to condemn someone (including Trump) for being racist, I do feel a need to demonstrate that what I am condemning him for was actually racist, not just obnoxious and offensive. I guess I am strange that way.

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        • Which is an ethnic, not a racial category, which means they’d define her as white.

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        • “Trump didn’t use any racial language, much less a slur. He basically said that they aren’t real Americans. That may be offensively tribal, but it isn’t racist.”

          I don’t buy this. There’s a reason he used this line of attack against these four and not HRC.

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        • jnc:

          There’s a reason he used this line of attack against these four and not HRC.

          Sure, but the possible reasons aren’t limited to just racist sentiments, and not being a mind reader I can’t pick with any certainty.

          As an aside, and only because it seems to be another unquestioned assumption that virtually everyone is making, I’m not even sure he was referring to all 4 of them.

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    • Naturally, Klein simply assumes that AOC et al’s unpopularity among the non-left is driven by race, and that this, therefore, was the focus of Trump’s tweet. He can’t let himself consider the possibility that it might actually be a function of their hardcore socialism and anti-Americanism, and that that was driving Trump’s tweet.

      He talks about, but never quite fully answers the natural question of why even Nancy Pelosi doesn’t want them to be the face of the Dem party. Does he really think Pelosi is trying to prevent non-white (sic) women from being the face of the party, or is she actually afraid of the effect of “unapologetic liberals” – or what the average person knows as outrageously radical leftists – becoming the face of the party?

      Liked by 1 person

      • Vilifying nonwhite, female members of Congress electrifies their audience is a way that vilifying, say, Rep. Richard Neal, the powerful but bland chair of the House Ways and Means Committee, does not.

        I feel like Klein is too smart and has spent too much time in the media to believe this explanation in his heart of hearts, and if they can read minds then I can too.

        This is a purposeful bit of misinterpretation in order to push a preferred narrative. He has to know that what these people say and advocate for (and the drama they are creating for Democrats) is far more interesting than their color or apparent or claimed ethnicity.

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        • Seriously. What was the last anti-Jewish or America-hating thing Richard Neal tweeter? I mean, Occam’s razor, Ezra. Occam’s razor.

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        • Y’all have spent a lot of energy defining racism, which is certainly worth defining. But as someone who was told to go back to where you came from who is married to a woman who was told to go back where she came from I can testify I would have felt no less insulted and demeaned by the remarks because they were not based on the color of my skin. For a POTUS to pull this divisive schoolyard taunt to suggest he is more “American” then other specific American citizens is despicable. Or do you think this is truly outstanding? Let’s get real.

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        • Mark:

          But as someone who was told to go back to where you came from who is married to a woman who was told to go back where she came from I can testify I would have felt no less insulted and demeaned by the remarks because they were not based on the color of my skin.

          I don’t doubt that at all. I just think that accusations of racism, being pretty much the most egregious non-criminal offense that one can be accused of in the US, ought to be reserved for actual instances of racism, and not diminished by turning it into an all-purpose shield for “persons of color” against every manner of offense or criticism.

          Call Trump’s tweets schoolyard bullying…fine. Call them buffoonishly ignorant….fine. Call them offensive…fine. (Although do I care much about Trump hurting the fragile feelings of Ilhan Omar or AOC? Probably no more than you care about the fragile feelings of Trump with regard to the routine accusations of him being a racist/white supremacist.) But don’t call them racist, because they aren’t. Whatever you may think about questioning the American-ness of other Americans, he did it not because of their race, but because of their politics.

          For a POTUS to pull this divisive schoolyard taunt to suggest he is more “American” then other specific American citizens is despicable.

          Perhaps, but might it be a little less so if those other specific Americans are in fact hostile to America, American society, and American culture, and want to turn them into something entirely different? I think that it is possible that “other specific Americans” are themselves pretty despicable, and through their words and actions have forfeited the assumptions of goodwill that otherwise I would expect should govern interaction with them. In other words, there can be (and are) enemies of Trump who are just as beneath contempt as they (and NeverTrumpers more generally) think Trump is.

          Or do you think this is truly outstanding?

          No, I don’t think it is truly outstanding. But nor do I care at all if Omar or AOC find themselves offended by someone questioning their American bona fides.

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        • “But don’t call them racist, because they aren’t. Whatever you may think about questioning the American-ness of other Americans, he did it not because of their race, but because of their politics.”

          I’m not sure if the distinction on why he did it matters. He can use a racist attack for non-racist reasons. Same as Alec Baldwin calling someone a fag because he’s pissed at them for taking his parking space. Doesn’t change the nature of the slur itself.

          In this case, it’s close enough for me to count it as a racist line (or if you want to be generous, “racially charged”) especially since three of the four were born in the US so it only makes sense in the context of saying that doesn’t matter, they are still disqualified from being Americans. I don’t feel a need to somehow prove that Trump is a full on classic racist to condemn him.

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        • But as someone who was told to go back to where you came from who is married to a woman who was told to go back where she came from I can testify I would have felt no less insulted and demeaned by the remarks because they were not based on the color of my skin.

          Which is perfectly reasonable. There are any number of perfectly reasonable and understandable objections to what Trump said, is saying, and will say. But reflexively shouting “racism” to criticisms of other things makes no sense. Xenophobia would have been a reasonable objection, other criticisms about him trying to avoid their criticisms or being unable to intellectually defend his positions and thus immediately moving to bullying tactics–that’s a reasonable criticism. The more honest take that he said that because he thinks everybody who doesn’t support him should go back “where they came from” would be legitimate.

          It’s the intellectual form of emojis and abbreviations replacing real words and concepts so there is just an immediate response. Trump says something and they emoji up “racist!”. It’s just a big frowny face. They can do better! 😉

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        • I don’t feel a need to somehow prove that Trump is a full on classic racist to condemn him.

          Nor should you. And he may be. But what he said isn’t definitionally racist–xenophobic, maybe. Nationalist. Narcissistic. A form of deflection. A bullying tactic. But unless race has expanded to cover every person who Trump attacks . . . the easy repetition of the tweets as racist seems linguistically lazy to me. Might as well call them sexist, as everyone he was attacking (it would seem) are women. But racism is still the more negative term, so racism it was!

          While they are all arguably non-white (in our modern definition, anyway, where you can’t just be prejudiced against someone based on national origin anymore; it has to involve the melanin content of their skin for some reason) they are also definitely women. And unless we agree that his focus was more on their first-or-second generation immigrant–or more on the countries they venerate versus their antipathy to the US–then sexist seems just a good a descriptor of the tweets. While nationalist or xenophobic are both much better descriptors by any objective parsing of the words.

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  2. Pretty sure this did not go the way Fauxahontas wanted.

    Like

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