Morning Report: Homebuyer demand surges

Vital Statistics:


Last Change
S&P futures 2964 -64.1
Oil (WTI) 34.64 -1.39
10 year government bond yield 0.67%
30 year fixed rate mortgage 3.19%


Stocks are lower this morning as investors fret about a second wave of COVID-19 cases. Bonds and MBS are flat.


We don’t have a ton of economic data this week, but Jerome Powell will be speaking on Tuesday and Wednesday.


Homebuying demand is even stronger than a year ago, according to Redfin. Supply is still restricted, with many opportunistic sellers pulling their homes off the market because of health concerns. “It’s just bananas, with so few listings and so many buyers,” said Ms. Shakur, the Redfin agent in Maryland. “Having lived through the 2008 bubble, I just want to be cautious. Maybe it’s nowhere near the same size as it was in ’08, and maybe it’ll turn out not to have been a bubble at all. But buyers are desperate. If a property is in a desirable neighborhood, buyers will overpay. Bidding wars, escalations, no inspections, agreement to pay over appraised value, all of that’s becoming the norm.” Adds Mr. Palmer, the Redfin agent in Seattle. “Anything I’m pricing correctly right now is flying off the shelf.”


homebuyer demand


The COVID-19 crisis, along with civil unrest, and the ability to work from home will cause a flight to the suburbs, similar to what we saw in the 1970s and 1980s.


Building permit growth is robust as builders recognize the opportunity in front of them. The South is seeing double-digit growth in permits, while the West is up about 6%. Surprisingly, multi-family is much weaker, but the multi-family series tends to have a lot of month-to-month volatility for some reason.


What would Quicken’s valuation be in an IPO? Some are suggesting tens of billions of dollars. The big question: would it be valued like a fintech company, or a plain old mortgage bank?


Consumer confidence is coming back. “The turnaround is largely due to renewed gains in employment, with more consumers expecting declines in the jobless rate than at any other time in the long history of the Michigan surveys,” Richard Curtain, Chief Economist said.

33 Responses

    • Wilful blindness in the face of disease and death.


    • Speaks to the power of the SJW movement that they get to overrule the medical establishment


      • I don’t think the medical establishment tried very hard.

        Glenn Greenwald has been tweeting and writing recently about what a complete abdication it was for all of those immunologist to sign a letter stating that in their medical judgement, protests weren’t risky.


        • because if you take them on, your career is over. zero upside for anyone to stick their neck out.

          It speaks to power they have.


        • The only people who can speak up have to literally be those ready to retire and done with their career, and not care about their legacy overmuch. At least not their legacy in the field.


        • jnc:

          I don’t think the medical establishment tried very hard

          I think it just shows that the medical establishment, like so much else, has been infiltrated and taken over by the ideological left. And honestly, who can be really surprised? As soon as “the science” became a – or worse, the – talking point on the left, you could bet the house on the fact that the left had coopted “the science”.

          I don’t remember who said it, but whoever did was right…any organization that is not explicitly right-wing sooner or later becomes left-wing.


        • One of those open letters included people with the titles of “Medical Student”, “Activist”, and “African American”–while asserting they were people involved in the medical field. Which may not be technically untrue, but the impression given was that a bunch of doctors and nurses and high-level medical professionals signed on to it when it was some–but the numbers were heavily padded.


    • The ideological commitment overruling the actual science in a case of life and death reminds me of the aging commissar in the first episode of Chernobyl on HBO who sealed off the city rather than evacuate.


      • The Soviet system of propaganda and censorship existed not so much for the purpose of spreading a particular message as for the purpose of making learning impossible, replacing facts with mush, and handing the faceless state a monopoly on defining an ever-shifting reality.

        Little did I suspect in the 80s that you didn’t need a government to do that. A free press will do it ALL BY THEMSELVES!


  1. I think it is too early for unbridled optimism. As for the stock market itself, I have read that gambling money has actually moved from casinos where sports and thus sports betting is nil into the markets. This is plausible, whether or not it is true. Inquiring minds want to know. But it might explain the huge volume of day trading in bankrupt Hertz, where eventually stockholders will be cut adrift.

    Also, this morning’s 6-3 opinion from the Supremes. I have not yet read the dissents but Gorsuch’s opinion is straightforward, with a warning against judicial activism at the end.

    Click to access 17-1618_hfci.pdf


    • Mark:

      …with a warning against judicial activism at the end.

      That’s a bit like Derek Chauvin issuing a warning against police brutality on his way back to the precinct after the George Floyd incident.

      According to Gorsuch’s logic, if I fire an employee for walking around the office with his penis hanging out, I have violated Title VII.


      • if I fire an employee for walking around the office with his penis hanging out, I have violated Title VII.

        Speaking as a guy, it’s about fucking time this is constitutionally protected.

        Free The Penis!

        Liked by 1 person

      • only if you would not fire a woman for walking around with her penis out.

        which is probably about right for 2020.

        Liked by 1 person

      • Textualism over originalism. Plain and simple.


        • Mark:

          Textualism over originalism. Plain and simple.

          Did you read the dissent?

          I don’t think it really is that plain and simple. I realize that these terms for different methods of interpretation are somewhat fluid and can get convoluted, but from what I have seen textualism and originalism are often used interchangeably to refer to the same, not competing, methods of interpretation (although I do know that it may not be quite right to conflate the two). Certainly Scalia has long been considered a textualist, and considered himself one, and he almost certainly would have sided with the dissent, as did Thomas, another textualist.

          Scalia’s textualism held that a statute should be applied by understanding the words of the text to have the same, plain meaning that those words had to the people who wrote them. This is contrasted (in one respect) with applying the the statute as if the words in it have a more contemporary meaning. I actually think that both the opinion of the court and the dissent, at least on the face of it, are ostensibly doing the former, not the latter. The key word in this respect is “sex”, and neither side is arguing that “sex” means something other than what it was understood to mean to people in 1964. So the difference between them is, again at least on the face of it, not a matter of textualist interpretation vs some other form of interpretation.

          The difference seems to be that the majority is claiming that, by outlawing discrimination on the basis of sex, even as sex was understood by people in 1964, the statute necessarily implicates any characteristic to which sex may be relevant. So, since a person’s sex is relevant to their sexual orientation, necessarily then to discriminate on the basis of sexual orientation is to discriminate on the basis of sex. This is essentially their argument, and it is why I said what I said earlier…that by this logic, to fire a person for walking around the office with his penis hanging out is, by Gorsuch’s logic, discrimination on the basis of sex.

          The dissent argues that the word sex, sexual orientation, and gender identity all refer to distinct concepts, and the people in 1964 understood these words (or at least those in the first two, as the third had not even been invented yet) to refer to distinct and separate things. Therefore, to outlaw discrimination on the basis of sex meant something entirely different than to outlaw discrimination on the basis of sexual orientation, and this is how the law must be understood and applied.

          Basically the dissent is arguing (convincingy to me) that majority has crafted an ostensibly textualist argument in order to derive an indisputably non-textualist result. The majority is arguing essentially that discrimination on the basis of sexual orientation has always been outlawed by Title VII, but people in 1964 – and by implication subsequent generations that have tried and failed to explicitly add sexual discrimination and so-called gender identity into the law – were simply too stupid or careless to understand the implications of the words they used to write the law. The dissent rejects this notion, and is saying that the pretense of the majority to textualism is just that…a pretense. I agree with them.


        • As for the substance of the majority’s decision, it strikes me as obviously absurd on its face, even if entirely predictable given modern jurisrpudence.

          I would ask this: If a legislator wanted to craft a law that prevented discrimination against men as men or women as women – ie on the basis of sex – but which did not prevent discrimination on the basis of sexual orientation, what words could that legislator have used in 1964 that would have precluded Gorsuch et al from reaching yesterday’s conclusion?


        • None. I think it’s transparently legislating from the bench, and not sure how it could be legally interpreted otherwise. Very much discovery new laws in the emanations and penumbras.

          I don’t actually object to the protections the SCOTUS is imagining for folks–it’s just they aren’t in the language of the law. Ergo, why there needs to be a specific acts to protect sexual preference and gender identity . . . and, IMO, ideology. Because I’d love to see the battle the ensues regarding a law that protects citizens from discriminatory hiring/firing practices based on ideology.


        • Then the text lacks inadequate specificity to avoid ambiguity and potential misinterpretation. Better to pass an act specifically protecting those things or amend the Civil Rights Act in some form in congress, rather than again allowing SCOTUS to insert new laws.

          And again I have no real objection to the outcome–no doubt it can and will be abused, as certain agitators will sue companies because they believe they didn’t get the corner office because they are transexual or something, but anything contains that potential for abuse.

          I just object to deciding to broaden interpretation to cover aspects that were clearly not part of the law at the time–as that does seem to be a slippery slope. Depending on future litigation and wise justices to restrain.


  2. Like

  3. Good read:

    “Jon Stewart Is Back to Weigh In

    By David Marchese”


    • He’s a smart guy but I just don’t think is ultimately correct–or even pointed in the right direction:

      Segregation is legally over, but it never ended. The police are, in some respects, a border patrol, and they patrol the border between the two Americas. We have that so that the rest of us don’t have to deal with it. Then that situation erupts, and we express our shock and indignation. But if we don’t address the anguish of a people, the pain of being a people who built this country through forced labor — people say, ‘‘I’m tired of everything being about race.”

      I feel this is not provable or falsifiable and thus the exact opposite of a beneficial starting point.

      Then, when that’s over, a defensiveness from the group that had been doing the oppressing. There’s always this begrudging sense that black people are being granted something, when it’s white people’s lack of being able to live up to the defining words of the birth of the country that is the problem. There’s a lack of recognition of the difference in our system. Chris Rock used to do a great bit: ‘‘No white person wants to change places with a black person. They don’t even want to exchange places with me, and I’m rich.’’

      I’m pretty sure the world is full of poor white people who’d love to trade places with Chris Rock. I’d do it, sure.

      There’s not a white person out there who would want to be treated like even a successful black person in this country.

      I–what? This really doesn’t make much sense.

      It’s a long interview. He’s a smart guy. But his best years were on the daily show. Now he says “he’s taking action” on issues that matter to him, but I’m not sure what that means. But good for him.


    • But my question stands from earlier: knowing the stock will tank, are the day traders just a bunch of sports betters with nothing else to do?


      • could be… but these sorts of folks are just part and parcel of bull markets…

        Still, if the SEC’s job is not to prevent bankrupt companies from selling stock, then what is its purpose?


        • The only possible job Elizabeth Warren might do well – SEC?


        • Not confident in that but you never do know. I really thought Obama was going to govern far to the left of how he actually governed (I imagined it, apparently, based on his previous positions in statements about positive rights, though). So maybe she’d play it straight.


        • I’d much rather have Sheila Blair.


        • Bair? No doubt.

          I was just trying to think of SOMETHING EW could do that was not fraught with peril on the assumption she will want or get appointed to something if JB is elected.


        • I doubt she’ll resign the Senate seat she currently holds as long as the replacement would be chosen by a Republican governor.

          Of course, Massachusetts dealt with that once before by changing the succession law and then changing it back when Ted Kennedy died.


        • Still, if the SEC’s job is not to prevent bankrupt companies from selling stock, then what is its purpose?

          So Trump wants to move the current SEC chair, a corporate lawyer who has never seen the inside of a courtroom, into the role of USDA for the SDNY. This all fits, I guess.


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