Morning Report: Mortgage Credit Tightens

Vital Statistics:


Last Change
S&P futures 2876 43.1
Oil (WTI) 26.27 2.29
10 year government bond yield 0.69%
30 year fixed rate mortgage 3.36%


Stocks are up this morning on no real news. Bonds and MBS are up as well.


Initial Jobless Claims fell to 3.2 million, taking the COVID total of job losses to 33.4 million.


Challenger, Gray and Christmas reported 671,000 job cuts were announced last month.


Productivity fell 2.5% in the first quarter, which was better than the expectations of a 5.5% drop. While next quarter will be the big test, it certainly looks like businesses are figuring out a way to work around COVID restrictions.


I was listening to Fannie Mae’s Q1 conference call, and their baseline scenario for forbearance is 15%. Their baseline scenario is a second half recovery, with overall negative GDP growth for 2020 and massive growth in 2021.


Mortgage Credit Availability fell to a 6 year low in April according to the MBA. “The abrupt weakening of the economy and job market – and the uncertainty in the outlook – drove credit availability down in April for the second consecutive month,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The overall index fell to its lowest level since December 2014, and the sub-indexes pointed to tightened credit supply for all loan types. The decline was largely driven by lenders dropping many low credit score and high-LTV programs, as well as further reduction in jumbo and non-QM products.”

To be honest, I was expecting worse. Given the issues with forbearance and cash-outs, it probably will get worse.




Treasury is celebrating the sequel to Top Gun by reviving the 20 year bond, last seen when aviator glasses, leather jackets, and Val Kilmer having a career.



61 Responses

  1. The left is all up in arms about some video called Plandemic.

    Haven’t seen it, but all the “Stay At Home” virtue-signalling types are warning about it.


    • I am absolutely convinced this panic is driven by white suburban women. These are the same broads who fall victim to every nonsensical ratings sweep scary local news story about Tide Pod challenges or some freaky drug experimentation that teens are supposedly dying from. I don’t know how these women became afraid of their own shadow but fuck me they’re exhausting.


    • From Forbes:

      At least it is a non-partisan pile of misinformation as both conservative and liberal friends seem to be sharing it. According to the BBC, other conspiracy theories linked to religious groups, software moguls and immigration have been propagated by extreme political tribes. Honestly, I will leave it to folks like Beres and the numerous other outlets to debunk video. My goal is to explore why people are more enamored with conspiracy theories than science.

      I shared with y’all, I think, that the Wuhan lab director was sacked in early 2019 because of careless practices, which reportedly were addressed, but continued, anyway. That a careless lab worker brought the virus into the wet market is plausible, but because it is a natural occurring virus that was not manipulated the notion that it was intentionally released should be debunked as another conspiracy theory.

      We also now know that China must have underreported fatalities by at least a factor of five, judging by the lines of people in Wuhan who are outside the mortuaries to pick up urns with ashes in them. They also under-reported spread because it has leaked from Beijing MDs to US MDs who [went to med school together] that there are cases all over China, even into Harbin in Manchuria, which the PRC denies.


      • Does Llama antibody kill COVID-19?

        [Long from a scientific journal]


        • Mark:

          Does Llama antibody kill COVID-19?

          Just imagine the headlines and news stories that would result if Trump had posed that question.


      • I’ve gotten to arguments with people who are convinced–and there are a lot of them–that the Wuhan virus was engineered. I just don’t think it’s the case. Jonah Goldberg had a podcast with Matt Ridley, and when they discussed COVID Ridley proposed a theory which sounds right to me–that the virus actually spread from a lab with lower security standards, and was not engineered but from a sample–as one of the scientists there is known for covering a very wide geographical distance taking samples from horseshoe bats.

        This explanation makes a lot of sense to me. Makes much more sense than the theory being pushed by those sure it was engineered that there’s evidence that elements of HIV had been grafted on to a coronavirus to make COVID-19 and then it was accidentally or intentionally released.

        For many the conspiracy theory goes wide and far. China engineered the virus and released it intentionally, then spread it intentionally. The point was not to start a real pandemic but to financially cripple many of the world’s nations–especially those who owed China money and for whom default would mean giving up quite a lot of territory/authority/resources. BUT ALSO it was planned in order to accustom the general public to blind obedience and to limit their material resources and potentially break the food supply and . . .

        You are not going to do anything to convince people otherwise, however, by taking down every video that mentions Coronavirus on YouTube.


    • And it has been censored. I don’t think censoring stuff will have the effect the left hopes it will have regarding conspiracy theories.


      • It has the opposite effect. Stuff like that shows up and people share it. YouTube takes it down and then it shows up on BitChute or gets passed around on Reddit. Typically with the addendum that it must be credible, YouTube is trying to censor it.

        Every effort to control what people see is going to backfire. The people who won’t believe it still aren’t going to believe it, and the people who will believe it are just going to feel more validated. It’s them saying: “there’s no conspiracy” while doing all the things that make it look like there’s definitely a conspiracy.


    • I don’t go in for the conspiracy theories (yet), but I agree with Bill Maher and Fareed Zakaria that there’s a cognitive bias to view new threats as more substantial than old threats, even if that’s not factually accurate.

      I see this as very similar to the overreaction after 9/11, including the amount of security theater that was introduced when 99% of the problem was solved by putting locks on the cockpit doors in airplanes.

      If the amount of fatalities caused by car crashes was somehow perceived as a new thing, there would be a mass movement to ban cars. Ditto swimming pools and everything else. Another close parallel is the excessive amount of media coverage devoted to mass shootings relative to the actual risk posed by dying in one in the United States vs other causes.

      One thing I do understand better now is how the Salem witch burning occurred. It’s the exact same people who are “quarantine shaming” other people on social media, with 400 years difference. Ditto “The Scarlet Letter”. Progressives would love to be able to have that level of public shaming at their disposal today.


      • jnc:

        Hear, hear!


      • One thing I do understand better now is how the Salem witch burning occurred. It’s the exact same people who are “quarantine shaming” other people on social media, with 400 years difference. Ditto the “Scarlett A”. Progressives would love to be able to have that level of public shaming at their disposal today.

        They are constantly working at it. It’s over half their posts on Twitter. Cancel culture has a large public shaming element. You get it when folks credulously comment that there are people flying Nazi flags at “end the lockdown rally” because they are, you know, Nazis–and not accusing the local government of Nazi tactics.

        I think the novelty of coronavirus combined with the right (sometimes ephemeral) combination of things to set off public hysteria has gotten us into this situation. Various political and media actors have tried for the same reaction with H1N1, SARS, and Zika–this time it really took.

        As I’ve argued always–conspiracies aren’t necessary. There are like-minded folks in media and politics and the public policy think tank space that always want the latest “pandemic” to be transformative–and always predict millions of deaths with a tremendous need for draconian response from the government. As far as it being done this way specifically to get rid of Trump: again, there are any number of like-minded people who will use any plausible situation to further that goal. No coordination required.

        Human beings are capable of being hysterical and capable of being sheep. Always have been. And local and state governments always have a share of wannabe dictators who will jump at any chance to rule with an iron fist . . . until the next election.

        The folks in charge of YouTube have wanted both the capacity (harder) and the social permission to censor any ideas they disagree with or consider dangerous forever. This is just an opportunity to help make that happen.

        And people have never been great about putting things in context, and when they don’t know much about something (and most of the general public doesn’t know much about viruses or pandemics) then there brains will naturally latch on to information that seems to have a plausible shape and decide they know the score, and the consider themselves to have much deeper knowledge and a much better grasp of the situation than they do (a phenomenon that his been demonstrated numerous times with a variety of subjects).

        But with the except of China trying to suppress any and all information regarding the origin and spread of Coronavirus, I don’t see much conspiracy here. Just people doing what they do.


        • “I think the novelty of coronavirus combined with the right (sometimes ephemeral) combination of things to set off public hysteria has gotten us into this situation. Various political and media actors have tried for the same reaction with H1N1, SARS, and Zika–this time it really took. ”

          For progressives, it’s this combined with TDS. They have been believing that Trump was going to literally destroy the world since he was elected and now they feel vindicated. And if they aren’t going to be vindicated based on the natural course of events, then they can influence them to generate the same results. Originally it was nuclear war, but a pandemic will do in a pinch.

          PL has lost whatever residual entertainment value it had for me. They are truly in the midst of group hysteria/psychosis there. One of the regulars posted yesterday that COVID-19 was an extinction level event to the general agreement of everyone else there.


        • Hanging out places like PL give you a distorted view of the world. There’s a large chunk of the population that feels this is bad, but maybe we’re overreacting, but maybe still it’s better to play it safe. Then there’s folks who think it’s all an overreaction. Then there’s folks who think it’s a false flag operation. Others who think it’s an accidentally or intentionally released bioweapon–but the fraction of the total population who believes it is an extinction level event has to be relatively small.

          PL is just not representative of the population at large or, IMO, most Democrats. Because it’s one thing to think Trump is an awful president and that his speeches are rambling and incoherent and he doesn’t inspire confidence and he flip-flops and all of that. Then another to think he told people to inject lysol and drink bleach. And still another to think he is intentionally trying to kill Americans because he’s psychotic. And then to just start making stuff up–which is frequently the case. Some comments are just ludicrous fantasies of a mustache-twirling villain.

          I think those groups lead to a very distorted view of the population at large–for us if we linger too long, but especially for them.

          If Trump wins in November–and the power of incumbency and the relative weakness of Joe Biden says there’s a good chance he does–they will all think the election was literally stolen and that the machine were hacked. Because they cannot see a world in which that outcome is possible. It would be like Han Solo and Luke Skywalker and Prince Leia getting together to vote for Palpatine as supreme chancellor.


        • Originally it was nuclear war, but a pandemic will do in a pinch.

          Or global warming. They always have something to get freaked out about.


        • “If Trump wins in November”

          If he does, I think it will be because of what Bill Maher noted about the media and Panic Porn vs Trump getting to be the optimist:

          PL noted it yesterday and was dismissive of course, but reading between the lines and you can see the worry that Trump could pull it off.


      • You could also cite the McMartin preschool hysteria.


    • I’m always of the opinion that the left and right are more similar on tactics than they are different, especially over time, and much of the disagreements come down to the narcissism of small differences.

      And would argue that neither side would like to see any crisis go to waste. I think the difference here–and it seems consistent–is that it’s the left that always sees any new situation as an opportunity to fundamentally transform America. I hear the right say: “Let’s make America great again!” or “Let’s make Made in America mean something again!” or that kind of thing.

      But I don’t ever see: “America must be completely transformed!” That seems to be entirely the purview of the left. And it’s always “we” as in “us, the politicians and thought leaders” who will be executing the transformation. It’s never about anything organic from the general population or the culture–it’s always something “transformative” that’s going to be imposed by the elites.

      Just an observation.


      • If you believe that the country was founded on racism (see 1619 Project) and is still defined by it, then it makes perfect sense that it needs to be fundamentally transformed.

        Latest example of the argument that all disparate outcomes are based on racism:

        “The near-certainty of a black depression

        Recessions are always racist. This one could be catastrophic.

        By Aaron Ross Coleman
        May 6, 2020, 10:45am EDT”


      • I agree that remaking America is not a conservative principle but I think it is a libertarian one and I think it is a goal of ALL lobbyists.

        I think the remaking of America was a radical goal until recently but it has spread among liberals, who were previously interested in reforms that would leave America quite close to the way it is, but perhaps “cleaner” or “with more equal opportunity.” The PL crowd disdains equal opportunity as a mere shadow of what it wants – forced equal outcomes.
        The PL crowd cast me as the right wing lawyer from Texas a long time ago and I never went back, with two exceptions that I recall. I am the third most “liberal” person at this site if Lulu and ‘Goose are here but I am less than a klik to the left of Joe and Kev. My sympathies are with small biz because that was who I repped for years and who are still my friends, and who my wife still represents.

        I think PL is what we described on our ATiM site: a cesspool of hate. Perhaps we were half kidding. But I think it is not a window into the American likely Democratic voter’s soul, either.

        Liked by 1 person

  2. The Justice Department drops the Flynn case.

    So much for that one.

    Liked by 1 person

  3. This is who we need to deal with COVID-19:

    40th Anniversary restored 4K edition coming out in August.

    Liked by 1 person

    • Friend of mind recently did a little mini-documentary on Flash Gordon:


      • I thought I learned all I needed to about Flash Gordon from Ted! Thanks!


        • Most welcome. I had a separately sold .mp3 DVD commentary from Melody Anderson and Sam Jones–it was great. But I lost it and the people I got it from apparently no longer have copies of it either. And so it apparently exists nowhere.

          Separately sold because the folks making the DVDs would never pay any of the cast or people who worked on the movie to do the commentary or appear in any special features.


        • I just checked and the 4k will have audio commentary from Mike Hodges and BRIAN BLESSED!!

          I’d love the Melody Anderson/Sam Jones commentary but that’s at least a commentary track.

          2 Disc includes Melody Anderson in some capacity (Melody’s Musings). Don’t know what that’s about by I’m interested.

          5 Disc version will include LIFE AFTER FLASH documentary, and then the soundtrack, but with 5 discs I hope it includes something else.


      • Hah! I worked for the original Flash Gordon, Buster Crabbe, as a counselor and coach in his summer camp in upstate NY near the CDN border summer of 1964. It was between college and LS for me. Buster had done a year of LS at USC before Flash Gordon took his full time attention. He told me that unfortunately he left LS before learning the meaning of “residuals”.

        The best part of the 1984 campy revival was how similar it was to the 1939 version in so many ways. SO BAD IT WAS GOOD.


        • Hence cult classic.

          And why am I not surprised that you have a personal connection to Flash Gordon.

          Mark knows everyone.


  4. An interesting account of the reporting of the Tara Reade story at Vox.


    • “My story never changed. I just didn’t come forward with all the details. It’s really simple,” she said to me. “I held back this story because I was afraid of a powerful man.”

      May be true but I don’t find that a credible explanation for the changing stories. That’s insufficient. It sounds to me the best case (for her truthfulness) is that she was tailoring her story in both cases to get the most play. He might have done more, as she now says, and she decided to redact that–and have her friends not say more when corroborating–because she wanted a story she thought would get play without creating an assault allegation and having that whole conversation.

      It’s possible it happened, definitely, and I 100% believe her early complaints of inappropriate touching and asking her to dress like a cocktail waitress for an event. There’s nothin to be dubious about there, and that’s been her story for awhile.

      The new accusation may be true, but I think it’s just a lot harder to be sure of that.


      • KW:

        The new accusation may be true, but I think it’s just a lot harder to be sure of that.

        Why should it matter? We don’t need certainty. We don’t even need likelihood. Biden and the left established their standard with Kavanaugh. Justice requires that he/they be held to that standard themselves. Anything less is a gross miscarriage of justice.

        And to be clear, I’m not talking about justice for Reade. I am talking about justice for Biden and the Dems.


        • Well, Kavanaugh got advice, consent, and confirmation, right?


        • Mark:

          Well, Kavanaugh got advice, consent, and confirmation, right?

          Not from any of the Dems. They did not consent and they did not confirm. They just didn’t have enough votes to prevent it from happening.

          But I don’t really understand the point of your question. I am not talking about justice from a constitutional process point of view. I am talking about justice from a public/political point of view. The fact that the D’s attempts, and Biden’s participation in those attempts, to destroy Kavanaugh failed does not mean that Biden should not be treated by the same standard he was and they were promoting in that failed attempt.


        • You can’t unilaterally disarm, it’s suicide.


  5. And I thought I couldn’t be surprised.


  6. Now we know why all these lefty broads have come out saying they don’t care if Fingers Biden did rape the chick, we’re gonna vote for him. They saw this coming.

    Liked by 1 person

    • From the SLO news article you linked:

      Dronen at the time was contesting a restraining order Reade filed against him days after he filed for divorce

      It appears to me that estranged hubbie made the allegation during a divorce in order to UNDERMINE her cred for obtaining a TRO against him.

      I wonder more about her now than I did when I thought she was probably telling a basically true story, which was until five minutes ago.


      • That’s weird. To me, the fact that it was done by the husband contesting the restraining order gives it more credibility. In your case, why less?

        Liked by 1 person

        • She was restraining him and he was fighting the order. So it would be to his advantage to say she was a nut who once told him she was harassed in the Senate office [and maybe complained about other random acts of “men bad”] in order to show that she was just freaking out and could not be believed when she alleged in her TRO affidavit that she had a reasonable fear for her safety from him, which she had to allege to get a TRO.


        • I read it in somewhat of the same vein but more that he’s saying she’s hypersensitive because of past abuse.


        • That’s possible. Wish they had printed the whole declaration.


        • It’s very similar to the Christine Ford therapist corroboration where the notes were introduced showing that her husband had her go to therapy where it was disclosed that the reason she wanted to have two front doors was the alleged assault by Kavanaugh in high school.

          Sure it’s reasonably contemporaneous, but still just based on what the original accuser told other people, not any other witness.


        • I’m curious…does the underlying truth of Reade’s allegations actually matter to anyone here? Will it alter your consideration of Biden as a candidate one way or the other?


        • Nope.


        • I’m curious…does the underlying truth of Reade’s allegations actually matter to anyone here? Will it alter your consideration of Biden as a candidate one way or the other?

          Not really. In part because of the length of time that has passed. In part because even if you could establish the underlying truth it’s hard to know the full context and it seems unlikely by itself to have a direct bearing on his ability to be president.

          Honestly, I find his constant touchiness way creepier.

          What would reflect poorly on him is if it appears he called out a hit squad and was trying to crush her like a bug. Not really necessary with a compliant media but something politicians have been known to do.

          Also if a dozen women came out with this exact same story that indicated he’d been doing it again and again for the past fifty decades, then that also would change the equation.


      • Does more to corroborate her earlier accusations than her later accusations, which still remain only verbally corroborated by her immediate friends, I think.


  7. Good take on Flynn from Taibbi:

    Liked by 1 person

  8. Ugh, he never stops with this stuff:

    “We Need National Service. Now.

    The formative moment for a new generation.

    By David Brooks
    May 7, 2020, 6:42 p.m. ET”

    Liked by 1 person

  9. Looks like de Blasio is a racist, judging by disparate impact.

    Liked by 1 person

  10. Not the Onion:


  11. Check out the big brain on McWing!

    I have a feeling the Flynn plea will be withdrawn and he’ll be exonerated. – Feb 17, 2018


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