Morning Report: Fannie Mae surges on reform optimism

Vital Statistics:

 

Last Change
S&P futures 2973.5 -5.25
Oil (WTI) 58.46 0.44
10 year government bond yield 1.64
30 year fixed rate mortgage 3.77%

 

Stocks are lower this morning on no real news. Bonds and MBS are flat.

 

Steve Mnuchin is scheduled to testify before the Senate Banking Committee this morning regarding housing reform and the role of Fannie and Freddie. Mark Calabria, who runs the FHFA and Ben Carson who runs HUD will also join him. Note that Fannie and Freddie surged 35% yesterday on a Compass Point piece that expressed optimism for a shareholder suit and Mnuchin said that they were closer to retaining their earnings. You might want to keep an eye on the screen this morning if you hold these stocks.

 

Fannie mae stock

 

Small Business Optimism fell in August as respondents tempered their optimism about the future. Much of this was due to the about-face at the Fed, and fears that they might know something everyone else does not. Despite the drop in expectations, the small business labor market improved, with firms hiring .19 workers on average, and many finding it difficult to hire qualified workers. Small business also increased capital spending, which indicates optimism about the future. So, despite the dip in optimism, firms are still spending like the expansion will continue. One other data point: credit availability remains a non-problem. Only 4% of small businesses reported that their borrowing needs were not met, which is more or less a historical record. So, don’t expect much additional juice from rate cuts, as there is already more than enough credit.

 

The Chinese government removed the foreign cap on investments, although this is largely a symbolic move, as the current limit presents no constraint. That said, it is hard to avoid the thought that the Chinese government is looking for some greater fools out there for their banking system to sell assets to. Despite the talk about the yuan becoming a reserve currency, the Chinese government probably won’t want to give up the amount of control required.

 

Delinquency rates continue to fall, according to CoreLogic. The 30 day delinquency rate fell 30 basis points to 4% in June. The foreclosure rate fell 10 bps to 0.4%. We did see an uptick in a few states that wasn’t natural disaster related: VT, NH, MN, and ND.

 

Corelogic delinquencies.

 

 

12 Responses

  1. This is hilarious:

    Liked by 1 person

    • That’s amazing. “Your union did a great job for you in getting you fired! Now we ask that the people that fired us give up and go out of business, because the entire point of the organizations existence was to employee our union members. Also, they shouldn’t use the contacts or social media accounts we used, because they were ours! Also, we’re clearly a bunch of naive mollycoddled ninnies who have no idea how the world works. Union strong!”

      The whole point of ThinkProgress was never to make money, they say. Then how was a union relevant or appropriate in that environment? Seems odd that they needed a union to negiotiate for higher wages or other benefits that also cost money, yet the point of ThinkProgress was never “to make money”. The implication is that ThinkProgress existed solely to support the union.

      Also all that stuff about their “editorially independent voice”. What relevance does that have to the firing, the union, or whatever rights that CAP or the union have? Is there something contractual that requires somebody to do something if they don’t meet ThinkProgressUnion’s definition of providing “and editorially independent voice”?

      There’s a reason Stalin called ’em useful idiots.

      But yes. That is super-hilarious.

      Like

  2. A pretty decent piece on Charles Koch:

    “Welcome to “Kochland”: We all live in the brothers’ libertarian utopia

    Reporter Christopher Leonard on his “secret history” of the Koch brothers’ empire, and the world they created

    Chauncey DeVega
    September 10, 2019 12:00PM (UTC)”

    https://www.salon.com/2019/09/10/welcome-to-kochland-we-all-live-in-the-brothers-libertarian-utopia/

    Like

    • We live in a libertarian utopia? News to me!

      Like

    • the Kochs have advanced a far-right libertarian agenda that views the social safety net as something to be destroyed and democracy as the enemy. In their view, every area of human life should be subjected to the destructive whims of predatory capitalism.

      ….not to put too fine of a point on it….

      Like

    • Weird that it doesn’t even touch on the Koch’s opposition to Trump. Yet gives them credit for the recent tax bill.

      ” Some of what Charles Koch fought for and won in term of tax cuts that benefited his businesses led directly to the massive budget deficit the federal government is now experiencing.

      Uh-huh. Government spending plays no role, naturally. Also, federal tax revenues were higher in 2015 that 2014, 2016 then 2015, 2017 than 2016 . . . up every year. I love how they say stuff like that but without explaining how that’s true when federal tax revenues have gone up ever year for ten straight years.

      This too is part of the right wing’s plan, where they create huge federal deficits to then justify cutting Social Security, Medicare and the entire social safety net.

      It’s the conspiracy that the Koch’s put together with the Bilderbergs and the Council of Foreign Affairs at the last Tri-Lateral Commission secret meeting at area 51. Because right-wingers want to cut the social safety net because they want people to suffer. Because evil.

      How is Charles Koch trying to use America’s schools, especially colleges and universities, to disseminate his ideology?

      That this is discussed without irony speaks the the bubble both interviewer and interviewee live in.

      The poo-poo the Koch’s interest in criminal justice reform as being PR. Why can’t they be serious about it?

      Their ideology does not allow for altruism.

      Really? I suppose if the only form of altruism you can accept is wealth redistribution by the government, maybe, but that’s just . . . I dunno, the article on the whole seems awfully shallow.

      I can’t tell you how many people have come up to me and said things such as, “The Koch brothers are bipartisan, right? They’re not really Republican. They’re kind of in the middle.” That belief is an outgrowth of how Charles and David Koch invested a few million dollars into this criminal justice reform element

      That they don’t mention the Koch brother’s opposition to Trump here seems like a glaring omission to me.

      On issues ranging from tax policy to the environment as well as labor and trade laws, the Kochs have advanced a far-right libertarian agenda that views the social safety net as something to be destroyed and democracy as the enemy. In their view, every area of human life should be subjected to the destructive whims of predatory capitalism.

      Ah, Salon. I can’t believe people think this is good writing.

      I mean, the Koch brothers are hugely influential. Definitely a topic worth tackling, just it might be nice if it were by more thoughtful people. Perhaps the book being discusses is more substantial.

      Like

  3. Crude oil down a buck on the John Bolton firing. Crazy

    Like

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