Morning Report: Global central bankers meet

Vital Statistics:


Last Change
S&P futures 3058 -7.25
Oil (WTI) 47.97 -1.79
10 year government bond yield 1.13%
30 year fixed rate mortgage 3.49%


Stocks are lower this morning after yesterday’s rally. Bonds and MBS are up.


The G7 Finance Ministers and central bankers are held a conference call this morning to discuss the recent moves in the markets. While it is a long shot, do not discount the possibility of a intra-meeting rate cut. You could see a coordinated rate cut come out of this, possibly this week. Low probability event, but it isn’t zero.


Yesterday’s market rally was probably due to last week’s “too far, too fast” reaction in the markets. The rally was primarily driven by an expectation that global central banks will lower rates in a coordinated effort to support the economy. That said, how much of an effect will interest rates have? If you are worried about going out and getting sick, i don’t see how 25 basis points on the Fed Funds rate is going to change your behavior. At the margin, it could help businesses which have stretched supply lines, I guess. But cutting interest rates by 100 basis points over the next year in reaction to 105 cases of a disease in the US seems to be going overboard. It would also leave them out of ammo the next time we get a recession.


The ISM Manufacturing Index showed manufacturing barely expanded in February. Coronavirus issues are causing supply chain problems and the 737 Max groundings were also cited.


Construction spending rose 1.8% MOM and 6.8% in January, according to the Census Bureau. Residential Construction spending rose 2.1% MOM and 9% YOY. Coronavirus issues probably won’t affect the housing market much – fixtures are probably the biggest possibility. Luxury properties on the West Coast will be vulnerable as well as many owners are Chinese.


For all the handwringing about home affordability, telecommuting is providing a solution. “The job market is very tight and employers want to hold on to people, so companies are much more willing now to allow workers to move,” said Redfin chief economist Daryl Fairweather. “Plus, technology has enabled employers to let staff work remotely in a cost-efficient and productive manner.”


I am currently at the Lender’s One conference, and have heard from many originators that getting and retaining talent is difficult in this market. Many are paying up, and quite a few are looking at older workers as a solution. If this is happening in other industries besides the mortgage industry, that vast reservoir of over-50 labor that got created in the aftermath of the Great Recession might come on line, which would be fantastic for the economy.


employment population ratio

31 Responses

  1. Interesting. Burr is the chairman of the Senate Intel committee. I guess that means he’s going to be confirmed.


  2. Saw on the PL comments that the last Democratic debate is scheduled for March 15th. I wonder if it will even matter at that point.

    If I was the DNC head and had control of the debate and primary schedule, I’d have moved the California primary to March 10th instead of Super Tuesday and scheduled the debate for the week in between the two.


  3. Pity that Giuliani isn’t this person any more. Trump could have put him in charge of the Corona virus response and guaranteed his reelection.


    • even if trump singlehandedly found the cure to coronavirus, the left was going to say he botched it.

      the left is all in on “this is trump’s katrina”


  4. Obviously, the results aren’t in yet but according to five thirty eight things are maybe shifting to Biden.

    That regional divide in who wins what states has been clear for a while, but to repeat, the real prize of Super Tuesday is pledged delegates to the Democratic National Convention. And our forecast now says that Biden (484) will get more delegates, on average, out of Super Tuesday than Sanders (463) will. That’s a big shift from as recently as Sunday, when we were forecasting Sanders to get an average of 540 delegates on Super Tuesday and Biden to get an average of 395.


    • Heh:

      “I am the only candidate who can unite the party to defeat Reagan,” he said to scattered applause. “When Super Thursday hits here in a few weeks, we can rally the 150 million Democrats here in the great country of Texas to vote for me so we can get Reagan and his crony Dick Cheney off the Iron Throne there in the Imperial Senate. Go Hoosiers!”


      • Yes, he’s been around forever and probably can’t beat Trump. As usual my hopes for a good Dem candidate are circling the drain again.


        • But with Warren virtually out and Bernie down the Ds are no longer in danger of losing everything. The next Trump Admin deserves a D Congress – both houses, if possible. Not by margins that assure multiple Impeachment trials, however!

          Joe, you have made the point that the BernieBros may largely pout and bitch and stay home. Or vote Trump, or “Green”. I think that is a real possibility. But to the extent they were the ‘ute vote and the Chicano vote those are the least likely people to be bothered to vote anyway, as Sanders is learning.

          Not a single D who won a previously R seat in 2018 was supported by Sanders. The element that he and AOC and that group represent is geographically and demographically limited.

          My next door neighbor, the retired IBM engineer, also voted Bloomberg [electrical engineers sticking together]. His 30 something younger daughter is a sous chef somewhere, who makes enough to support herself, but not her brain damaged boyfriend, who seems to be her reclamation project. So my neighbor lets them both live with him. They are BernieBros who believe there is a huge wellspring of support for freestuff for them. My neighbor gets professionally good dinners out of the deal, and his house cleaned occasionally, but doesn’t otherwise interact with them. He told them early on to keep their politics to themselves. They have complied with his requests for fear of being locked out.

          I am willing to bet the two tenants don’t vote in the GE. So what?


        • Mark:

          The next Trump Admin deserves a D Congress…

          The only people who deserve a D congress are those who vote for one. Everyone else is what is more commonly known as “victims”.


        • The only people who deserve a D congress are those who vote for one. Everyone else is what is more commonly known as “victims”.


          Liked by 1 person

        • I expect there are exceptions. I know it wasn’t always true! But in the case of folks like Maxine Waters and AOC, I think that’s unquestionable accurate.


        • But with Warren virtually out and Bernie down the Ds are no longer in danger of losing everything. The next Trump Admin deserves a D Congress – both houses, if possible. Not by margins that assure multiple Impeachment trials, however!

          I expect Trump will have coattails in the general. So if he wins, I’m expecting a slim Republican majority in the house as well. Then in two years the Democrats take it back, so he better make it a productive 2 years.

          Then the Dems will get their chance in the Whitehouse for another 8 years, and we will see how that goes!


        • I expect Trump will have coattails in the general.

          Possibly not, judging from the 2018 swap of moderate Ds for moderate Rs in HoR. No libdems won against Rs, but moderate Ds took a couple of dozen suburban seats entirely, it appears, on Trump fatigue. These same districts rejected Sanders and came out strong. In tone, Sanders is the left analogy for Trump, pugnacious, always right, always winding everyone else up with stuff that sounds to many of us like WTF?


  5. I’m still not a fan of the new Star Wars movies, but this is a cool story:

    “Ben Affleck says Adam Driver ‘made me a hero to my kid’ after sweet birthday surprise

    Sara M Moniuszko

    Liked by 1 person

  6. Good piece:


  7. Policy analysts at the Centers for Disease Control and Prevention in Atlanta were told of the list of forbidden words at a meeting Thursday with senior CDC officials who oversee the budget, according to an analyst who took part in the 90-minute briefing. The forbidden words are “vulnerable,” “entitlement,” “diversity,” “transgender,” “fetus,” “evidence-based” and “science-based.”

    Reminds me of the George Carlin 7 dirty words bit. You just can’t make this shit up.


    • why would CDC try to shoehorn in those words to begin with?


      • I think “vulnerable” and “evidence based” are the only two that CDC would use. I suspect the rest were irrelevant but of interest to the Admin, in an “Oh, BTW, while you are not saying old people are vulnerable, don’t say these words either.”


        • I suspect the obama admin wanted to use these terms as shout-outs to various groups that constitute the democrat base. no reason why trump has to play along


      • Brent:

        why would CDC try to shoehorn in those words to begin with?

        I doubt it is true anyway. It is one of those too-good-check type stories.


    • Mark:

      You just can’t make this shit up.

      Want to bet that it has been made up?


    • Apparently the story was from 2017, and even CNN debunked it (emphasis added):

      But the document obtained by CNN, along with interviews with two officials from the Department of Health and Human Services, paints a different picture.

      They describe not a ban or prohibition on words but rather suggestions on how to improve the chances of getting funding.
      “Words to avoid: vulnerable, diversity, entitlement,” states the HHS document, “Instructions for Preparing the FY 2019 Congressional Justifications.”

      …The officials asked that their names not be used because they don’t have permission to speak with the media. They were not present at the meeting but said they had been briefed by someone who was there.

      Much of the outrage — the references to George Orwell’s “1984,” the photos with the taped mouths — seemed to assume that CDC officials were not allowed to use these words at any time, such as on the CDC’s website.

      But the HHS officials who spoke with CNN pointed out that this obviously isn’t true, since the seven words are used countless times throughout the CDC’s website: there are pages with “diversity,” “transgender,” and “vulnerable” right in the titles.


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