Morning Report: December jobs come in hotter than expected

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Last Change
S&P futures 3239 3.25
Oil (WTI) 61.57 -1.04
10 year government bond yield 1.82%
30 year fixed rate mortgage 3.88%


Stocks are slightly higher this morning despite an Iranian rocket attack last night. Bonds traded as high as 1.7% overnight before falling back to more or less unchanged levels.


The ADP jobs report came in stronger than expected, at 202,000. November’s weak reading was also revised upward. Note nonfarm payrolls are expected to come in at 164,000 on Friday, so there may be some upside.


Mortgage applications were largely unchanged during the holiday period, with the composite index falling 1.5%. Refis fell by 8% while purchases increased by 5%. “Mortgage rates dropped last week, as investors sought safety in U.S. Treasury securities as a result of the events in the Middle East, with the 30-year fixed mortgage rate declining to its lowest level (3.91 percent) since early October,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Despite lower rates, refinance volume decreased these last two weeks, and we expect that it will slowly trail off in the first half of 2020 as long as mortgage rates remain in this same narrow range. Homeowners would need to see a sharp drop in rates to reinvigorate the refinance wave seen in 2019.”


While the ISM manufacturing index was weak in December, the non-manufacturing index definitely was not. One quote from a builder: “Weather and the holiday season have had an impact on residential new construction sales and production. While demand is outstripping supply in the housing market, business is down due to global trade insecurity causing affordability, labor and cost pressures.” (Construction). Given the weakness in lumber prices, I am not sure how trade is affecting construction. If anything, the issue is labor.


Speaking of homebuilding, Lennar reported 4th quarter earnings that surpassed analyst expectations. Rick Beckwitt, Chief Executive Officer of Lennar, said, “During the fourth quarter, the basic underlying housing market fundamentals of low unemployment, higher wages and low inventory levels remained favorable. Against this backdrop, our homebuilding gross margin in the fourth quarter was 21.5%, while our focus on making our homebuilding platform more efficient resulted in an SG&A percentage of 7.6%, an all-time, fourth quarter low. In addition, our financial services business performed extremely well with fourth quarter earnings of $81.2 million, an all-time, quarterly high.” Revenues increased 9% as deliveries rose 13% and average selling prices fell 3% (as Lennar focuses more on the entry-level market where the demand is strongest).

48 Responses

  1. Hot Take Flashback:

    Man, they must give those Nobel prizes to just about anybody.


  2. Please Trump run this video in a campaign ad:

    “Biden told Ritter that no matter how thorough the inspections, the only way to eliminate the threat was to remove Saddam Hussein. “The primary policy is to keep sanctions in place to deny Saddam the billions of dollars that would allow him to really crank up his program, which neither you nor I believe he’s ever going to abandon as long as he’s in place,” Biden said, characterizing former President Bill Clinton’s administration’s policy. “You and I believe, and many of us believe here, as long as Saddam is at the helm, there is no reasonable prospect you or any other inspector is ever going to be able to guarantee that we have rooted out, root and branch, the entirety of Saddam’s program relative to weapons of mass destruction. You and I both know, and all of us here really know, and it’s a thing we have to face, that the only way, the only way we’re going to get rid of Saddam Hussein is we’re going to end up having to start it alone — start it alone — and it’s going to require guys like you in uniform to be back on foot in the desert taking this son of a — taking Saddam down,” Biden said. “You know it and I know it.””

    Especially this part:

    “During questioning, Biden mocked Ritter as “ol’ Scotty boy” and suggested that his demands — that the international community compel Iraq to cooperate with inspectors — if met, would give Ritter the unilateral authority to start a war in Iraq. Biden argued that such decisions belonged to higher-level officials. “I respectfully suggest they have a responsibility slightly above your pay grade, to decide whether or not to take the nation to war,” Biden said. “That’s a real tough decision. That’s why they get paid the big bucks. That’s why they get the limos and you don’t. I mean this sincerely, I’m not trying to be flip.” “

    Trump can close with something like “I didn’t get into politics to get paid the big bucks or the limo. I already had that.”


    • Oddly specific thing for a hacker to do. Using his IP address.


    • and as I understand it someone compromised my IP address

      By which I assumes someone either spoofed his IP address (how that would work in this capacity I’m not sure, though they could probably get it if they managed to get an email from him) or compromised his work or home network. Home network is more likely–but that would involve war-driving to get access to his home WiFi network.

      More likely than a right wing conspiracy in that case would be a neighbor hacking into his wifi.

      An Internet Protocol (IP) number is a virtual address connected to any given computer hardware that assists with connecting said devices to a broader network like the internet; it also allows devices to be addressed to a specific location of the user.

      Fake news. While IP addresses are virtual in a sense, they can be dynamic or static. While only the MAC address is really fixed in hardware (not 100% true but true enough for most scenarios), the IP address is assigned either dynamically or statically, and can be changed. It’s hard to have the same IP address as another device, period, because you can’t have two networks on the Internet that would allow the same IP address, and if you’re on a subnetwork where you could actually assign the same IP address to two devices, you’ll start getting errors and one of the devices will get knocked off the network.

      While it allows devices to be addressed to a specific-ish location (though this may not necessarily be the IP address, but the network the IP address is on, and might be determined by log analysis to where data sent to a given IP address was happening on real world routers and cell towers, for example) there is not necessarily any specific association of an IP with a given user. One of the many problems I had with the reporting on the Russian hacking of the election, where lots of things that are either as common as water (portscans) being reported as “Russian hacking” and the idea they could definitely say, basically because of IP addresses, that all sorts of stuff was definitely coming from the Russian government. This, however, was an assumption and did not constitute something they could positively know.

      And often the actual events they referred to were ones where the connections were not actually coming from Russia. But I digress.

      Krugman has now deleted his original tweet and said he may have been temporarily fooled by a common Internet scam.

      OMG. That sounds like he was suckered into the equivalent of those alert boxes that pop up on certain websites saying “your computer is infected with a thousand viruses, download this software and install and give us all your credit card information to fix NOW or all your data will be deleted!”

      Nobel. Prize. Winning.

      Also “temporarily fooled”. Talk about not taking ownership of your own gullibility.


      • He did. He fell for a phishing scam where someone called, told him his “IP had been compromised” (as apparently many other people pointed out: not really a thing) and that someone was downloading child pornography using his IP.

        Perhaps he was specifically targeted by someone who could successfully pose as his Internet provider (caller ID?) but that sounds really weird. Sounds kind of like he may have gotten a random call by some random scammer and bought it hook, line and sinker.


    • He was just looking for some Keynsian Stimulation

      Liked by 1 person

  3. This:

    “I suspect that the U.S. will get some improved deterrence from killing Suleimani — precisely because it went against the rules of the game as it had been played between the U.S. and Iran all these years: Don’t target each other’s leaders. The Iranian leadership now has to assume that Trump may be crazy and could react even more harshly and unpredictably in response to any further Iranian retaliation or escalation.

    This is surely disorienting for Iran’s clerics. Iran and Suleimani always assumed that they could out-crazy everybody else through proxies and cutouts. They or their proxy Hezbollah could brazenly blow up the former prime minister of Lebanon, Rafik Hariri, or blow up a key Saudi Arabian oil pumping facility, and then turn around and say to the world: “Gosh, who did that? What a tragedy.”

    Trump is the first U.S. president whom the Iranians worry they may not be able to out-crazy. Suleimani’s successors now know they will have to operate with much greater discretion and security concerns than did Suleimani, who thought he was attack-proof.”

    Liked by 1 person

  4. Alcoholics Anonymous is, apparently, a tool of and for the patriarchy.

    [AA] grew out of a fundamentalist Christian organization, the Oxford Group, and as a result, it is undergirded by the same belief system that asserts Eve grew from Adam’s rib.

    The values baked into its founding continue to shape the way the organization works, and it still has too many echoes for my liking of the ways women are expected to blame themselves, follow instructions and fall into line in a patriarchal society.

    Apparently taking control of your life as a strong feminist means blaming society for your alcoholism.

    I drank to feel a sense of wholeness that had been conditioned out of me by society, to combat a powerlessness that was my birthright as a woman.



    • I think the left’s explanation for everything is a bivariate equation with patriarchy and racism as the only explanatory variables.

      Liked by 1 person

      • True enough. But they are using those things as a way to not just explain objectively bad things (say, 9/11) but why you can’t get healthy, why you must be miserable, why you should and must stay addicted to alcohol or drugs, why you can’t get a job, why you aren’t responsible for any of your choices …

        It’s not just what they are using to explain everything, but that they are using those things as an excuse to abandon all the progress made by Western society.

        Right now, many on the left mocks anti-vaxxers (some don’t, because of big pharma or veganism or something). But it won’t be long before we find out that vaccinations are just another tool of the patriarchy. Then we can finally get all the polio and small pox patriarchal men have been trying to “protect us” from.


      • Don’t forget the Ruskies, they’re often at the bottom of everything.

        Liked by 1 person

      • Brent:

        I think the left’s explanation for everything is a bivariate equation with patriarchy and racism as the only explanatory variables.

        And, as if to prove the point, we have….The Whiteness of Toy Story 4:

        Particularly hilarious are the complaints about the introduction of yet another too-Caucasian main character, ” a very white fork”, and “the near-absence of people of color” in a story in which virtually none of the characters are, in fact, people at all. Progressives are seriously beyond parody at this point.


        • All the complaining and kvetching. Go create your own diverse, woke movies and books and TV shows and fix it. If YOU have a problem with it then YOU should take matters in your own hands and fix it. Make your own Pixar, make your own movies–make it happen.

          When all you do is bitch then you just aren’t serious. You’re just virtue signaling.

          Because in many ways TS4’s worldview seems like an Eisenhower-era fantasy, a vision of America that might have come from the most die-hard reactionary

          It’s not a textbook or a historical document. It is an entertainment reflecting the interests and creative passions of those creating it (and maybe some marketing research). Also there is nothing at all in that movie that screams “die-hard reactionary”. Most of the action takes place around an amusement park and an antique store.

          lovely if you’re wealthy and white

          These folks need psychological counseling. It’s a story–as are, frankly, all the Toy Story movies–that any human being with a soul can enjoy.

          They do discriminate, I suppose, against the soulless.

          When you don’t see yourself represented and you don’t see people with your same type of hair seen as the hero and seen as loving and desired, it really does a number on your self-confidence.

          The locus of that particular emotional problem is then on the viewer rather than the creator, IMO.

          Create product that represents you. Promote that product. Make it happen. You folks aren’t passive sponges. You can create product. The Hollywood machine didn’t come from nowhere. People made it. Directors and actors and producers aren’t assigned those roles by the government–they make it happen. Make it happen!

          Problems of prejudice, money and unemployment never seem to cross anyone’s mind.

          Yes. Because it’s Toy Story. It’s a form of mental illness to believe that every story and entertainment product should reflect your personal mental preoccupations and biases. It’s a belief that every other human being should be on the same page as you, about everything. Which is a form of pathological narcissism.

          The entertainment press continues to make itself irrelevant. And the more woke entertainment completely tank at the box office, the less the studios are going to want to follow their advice.


        • Take 2006’s Cars: its humor was based on all sorts of foreign stereotypes, inadvertently encouraging the anti-immigrant prejudice that’s now running rampant through the country.

          Do they not have editors at the Hollywood reporter? That’s a crazily sophomoric assertion.


    • This strain of modern progressive-fascism is an absolute cancer on humanity. In an almost literal sense.

      “and it still has too many echoes for my liking of the ways women are expected to blame themselves”

      Christ almighty. What kind of frackin’ progress do you expect any individual to make if they don’t take responsibility and ownership for the things they are responsible for? The number of alcoholics who get and stay off the bottle due to their philosophy and blaming and everything on everybody else and claiming 100% victimhood: 0.

      I drank to feel a sense of wholeness that had been conditioned out of me by society, to combat a powerlessness that was my birthright as a woman.

      Addicts–and this has been known forever–will say literally anything to excuse, justify, rationalize, and probably continue their destructive addictive behaviors. That’s the whole point of AA and most other addiction programs: stop making excuses. Stop justifying. Stop rationalizing. And own up to your own behavior, your own choices, and the consequences to you and those around you of what you’ve been doing.

      They are literally making an argument for more women to become and stay alcoholics. WTF.

      And why is it empowering to say to women they aren’t responsible for their choices or the consequences of their actions?

      These people are a cancer.



        stop making me drink

        Liked by 1 person

        • “stop making me drink”

          Magically. Not using any of the patriarchal oppressive methods that are the only known ways sobriety has ever been accomplished. Use empowered woman magic. But you use it. Not me. Because I’m empowered.


        • I literally cannot imagine any approach more enabling to an addict than saying: “You can’t ever possibly beat your addiction unless the entire world changes and conforms to all your expectations.”


    • I for one say Thanks Bill W.!


  5. Good Read:


  6. Worth noting:

    “‘High confidence’ that Ukraine plane hit by Iranian air-defense missile, U.S. official says
    Ukrainian plane crash kills 176 people in Iran
    A Ukrainian passenger jet carrying 176 people on board crashed shortly after takeoff in Tehran, according to officials.

    By Isabelle Khurshudyan, Missy Ryan and Paul Sonne
    Jan. 9, 2020 at 12:33 p.m. EST”



    Progressives in all forms of media are idiots. This is about how the fans–that is, the customers who they want to sell things to–are the problem.

    There is a strong undercurrent of racism and sexism at the heart of these attacks. For some, the original Star Wars movies were about mostly white men doing amazing things. To have women or a black man in lead roles challenges their notions of what Star Wars is.

    Since 1977, Star Wars has delighted and inspired countless millions. The saga of that magical galaxy far, far away has touched the hearts of viewers from all walks of life. For a long time, women and people of color didn’t get to see themselves as part of that world. Now, they can sit in a theater, look up at the screen and see people like them being heroes and saving the universe from the kind of single-minded oppressors who may have tried to keep them down in their own lives. If that kind of representation — or inability to accept story choices that weren’t yours — prevents you from enjoying the movie, Star Wars isn’t the problem.

    You find these same people attacking The Joker–made for $55 million, or about 1/8th (or less) of Rise of Skywalker‘s budget–for lack of wokeness, and attacking the fans of that movie for deciding to spend their money on it using the same rationale–that angry white men went to see the Joker because racism. Which is the ongoing effort to redefine insufficient woke virtual signaling as being racist and sexist.

    Rise of Skywalker isn’t underperforming The Force Awakens by over a billion dollars because of all those racists and sexists out there.

    The Joker didn’t do so well because it was racist, or because it glorified “incel violence”. Fans liked the movie, and the people making the movie didn’t scold and lecture the fans and then order them to go see the movie to prove their virtue.

    Also, on The Joker, it’s worth noting that while some woke critics criticized it for glorifying “white nationlism” or “incel culture” others specifically criticized it for not being about these things, apparently wanting the film to have been an indictment of white Nationlists, the so-called incels, and Trump voters, and explore how everyone they disagree with is a white nationalist and domestic terrorist. Or something.

    … also, again, the “fans are the problem” theme was trotted out for The Last Jedi as well.

    It goes with the Tran legend about her being chased off social media by toxic racist fans–although there isn’t actually evidence of that, and even Tran said she left because it was a little “all too much” Tries to tie in “gamergate” where one side is praised and empathized with for their victimhood, but in reality nobody comes out that well. Also brings in Ghostbuster 2016 as being a victim of toxic nerd culture and racism and sexism, as opposed to being clearly an awful idea. And they talk about the “racist backlash” to John Boyega being cast as a storm trooper, which as far as I can determine was never a real thing. Also a woman becoming Thor–a run which has been criticized for being awfully written and something that has ended up losing the comic half its already not huge readership–as being sexist.

    The thing is, almost all this fan sexism and racism either doesn’t exist or is a small amount of trolls (who may or may not be, but probably aren’t, actually fans, geeks, or nerds)–and there always will be–that nobody would be aware of except for folks in the entertainment press who are excited by the prospect of generating controversy (and clicks) and so insanely over-amplify their relevance and influence.



    • look, if culture wants to proselytize me for 2 hours, they can pay me instead of the other way around.

      Liked by 1 person

    • There’s an unremarked condescension towards women and minorities here as well in that in all of these cases it’s about taking roles that became popular with one set of actors (usually white and male) and just changing the gender and ethnicity and somehow thinking that’s a great act of artistic expression.

      I.e. we need a black James Bond or a woman James Bond. Because we can’t write an original story that’s on par with that iconic character that is set from the start with a black man or a woman as the main character.

      If they had any self awareness, they’d realize that this was the “cultural appropriation” that they are always whining about.

      And no, this wasn’t the appeal of the original movies:

      “For some, the original Star Wars movies were about mostly white men doing amazing things.”

      With regards to Tran, I have no idea if she would have been good or not in a Star Wars role because the writing and directing for the role that she was cast in was so bad that that it’s impossible to tell.

      Liked by 1 person

      • and just changing the gender and ethnicity and somehow thinking that’s a great act of artistic expression.

        Exactly. And this a common complaint amongst the fans of genre products: that gender and race flipping roles doesn’t do anything. Use some of the existing strong female characters or strong non-white characters and their backstory, or create new ones, or something.

        With regards to Tran, I have no idea if she would have been good or not in a Star Wars role because the writing and directing for the role that she was cast in was so bad that that it’s impossible to tell.

        True enough. The main thing is–and a common point amongst the fans–is that there is zero evidence she was hounded off social media by misogynists. There aren’t any real quotes or screen captures or record of that–there’s just the repeated assertion. Promoted by people from the production team and/or studio, which is a strategy that has been done a couple of times.

        It’s like: hey, let’s get some sympathy ticket purchases. There is something about it that strikes me as deeply cynical. As well as ineffective, if increasing box office by trying to blame fans for things they aren’t doing is their market strategy.

        Something similar was said about Daisy Ridley dropping off social media and she has flat out said it was because it was getting creepy that random strangers were seeing people she knew or where she was or had been or was going and was using that information to celebrity stalk her–which is bad, but is different from dedicated Star Wars fans harassing her with sexist invective.

        And no, this wasn’t the appeal of the original movies

        And the presence of women and minorities is not the problem with the current movies. It’s the writing, direction, plot, and what has to be an intentional effort to alienate the fans.

        It boggles my mind that Disney spent $4 billion dollars for the IP–wanting the money from movies and merchandising etc, the vast majority of which is driven by fandom–and then said: “We want this series to be very girls and maybe gay people and maybe minorities, don’t really care, just so long as all the people who made with property actually worth $4 billion dollars frack off and don’t taint us with their dirty money.”

        And when I say Disney, I mean Kathleen Kennedy and her hand-picked Lucasfilm story group.

        Bob Iger is only to blame for (a) letting KK have so much autonomy at the outset and (b) getting involved so heavily in Rise of Skywalker that a movie that could have been maybe, at least, no worse that Force Awakens and might have actually done something interesting for the fans was turned into a mess that tried to satisfy everybody and thus satisfied nobody. They would have done better sticking to Rian Johnson’s subversion model than what they actually did.


  8. Media Bullshit the umpteenth:

    Trump apparently is now responsible for the Iranians shooting down the Ukrainian airliner.

    Liked by 1 person

    • Breaking: Everything bad that happens after the last thing Trump did is solely because Trump did that thing. Later, a panel discusses why all bad things that happen are because of Trump.


    • Frum:

      The victims of the crash of Ukraine International Airlines Flight 752 were not U.S. citizens, and certainly not residents of any state that Trump might win in 2020, so who cares, really? The loss of life had “nothing to do with us.” It was a “mistake on the other side.” The gun just went off; let’s not ask too many questions about who put the bullets in the chamber.

      A pretty reasonable case can be made that Obama is the answer to that question, what with his ransom payments and crate-loads of cash. But don’t expect Frum to admit that.


      • “let’s not ask too many questions about who put the bullets in the chamber.”

        That would be the Russians I would presume, as they sold the missiles to Iran. Although technically the Iranians still would be the ones who loaded it.

        And pulled the trigger. It didn’t just go off.

        What Trump is really trying to do here by being circumspect is not unnecessarily provoke the Iranians on something that US intelligence genuinely believes was an accident.

        But Frum of course can’t admit that.


  9. Good read:

    As an aside it’s worth comparing the current title of the piece to what was apparently the original one:

    “When did it become acceptable to kill a top leader of a country we aren’t even at war with?”


    “The Iran Crisis Isn’t a Failure of the Executive Branch Alone”


  10. Interesting…the fight over the non-delegation principle:

    It’s one of the most exciting possibilities in constitutional law right now: Many conservatives are clamoring to revive the long-dormant “nondelegation” doctrine, which liberal Supreme Court justice Elena Kagan has warned could invalidate “most of [the federal] Government.”

    In essence, the doctrine holds that since the Constitution vests “all legislative Powers” in Congress, it is unconstitutional for Congress to turn those powers over to the executive branch. Congress may not, in other words, simply direct federal agencies to make major policy decisions themselves, the way it does now for a host of economic and environmental regulations. The courts must step in, police the separation of powers, and stop such abuses.

    One of the most exciting possibilities? Hell, it’s better than viagra!


    • It will be interesting to see how the politics of this gets scrambled due to Trump being involved.

      In theory, this should reduce his ability to do things by Executive Order.


      • i always thought it was ironic that the party that calls itself “democratic” accomplishes much of its dirty work via the courts and the regulatory agencies.


      • jnc:

        It will be interesting to see how the politics of this gets scrambled due to Trump being involved.

        In theory, this should reduce his ability to do things by Executive Order.

        Indeed. I alluded to such a possibility way back when Trump got elected. I was talking about congress, but the left should in theory welcome a court decision that reins in Trump.

        The one big advantage that I see to a Trump presidency is that it might actually produce a Congress that is united against the abuses of the executive that we have become used to seeing go unchallenged.


    • i’ll be in my bunk


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