Morning Report: Construction hiring surges

Vital Statistics:


Last Change
S&P futures 3140 3.1
Oil (WTI) 40.54 -0.21
10 year government bond yield 0.66%
30 year fixed rate mortgage 3.12%


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


The “reopening trade” which lifted shares of banks, airlines, and leisure / hospitality companies has faltered a little on fears of a COVID resurgence. This has been pushing bond yields lower. The bank sector continues to struggle.


The MBA reported that the number of loans in forbearance decreased by 8 basis points to 8.39% as of June 28. “We learned last week that the job market improved more than expected in June,” said MBA Chief Economist Mike Fratantoni. “With that as background, it is not surprising that the forbearance numbers continue to improve as more people go back to their jobs. The improvement in the forbearance data was broad-based, with declines for both GSE and Ginnie Mae loans. The decrease in new forbearance requests indicates that further declines are likely in the weeks ahead.”


Mortgage applications increased 2.2% last week as purchases increased 5% and refis rose 0.4%. Note the week had an adjustment for the July 4 holiday. “Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Borrowers acted in response to these lower rates, after accounting for the July 4th holiday. Purchase applications continued their recovery, increasing 5 percent to the highest level in almost a month and 33 percent from a year ago. The average purchase loan size increased to $365,700 – also another high – as borrowers contend with limited supply and higher home prices.”


Job openings increased to 5.4 million in May, according to the JOLTS job report. Hires rose to 6.5 million, a series high. Construction hiring saw a huge jump with 673k new hires, although leisure and hospitality was the biggest jump with over a 1.3 million.


Quicken filed its IPO paperwork under the name Rocket Companies. The company originated $51.7 billion in loans in the first quarter of 2020. As you would expect, there are 4 classes of stock, and Dan Gilbert will hold the ones with 10 votes per share (the other class has 1 vote per share). For all intents and purposes, the new shareholders will have zero say in how the company is run. One number jumped out at me: Rocket is valuing its servicing at 2.2x, which is a pretty conservative number.



27 Responses

  1. Two consolations from Trump’s election loss coming up will be the end to the 24/7 panicking over Covid and a reduction in left wing rioting.and violence. Might even spare more Republican politicians from being shot.


    • McWing:

      …and a reduction in left wing rioting.and violence.

      I’m skeptical. I think the effort to destroy American culture/society will continue no matter who wins, and might actually be even worse if the Dems take over. After all, most of the violence we have seen so far has taken place in Dem controlled cities. These people hate Dems almost as much as they hate Republicans. The Dems are just useful idiots to them.


      • No, once it makes Democrats look bad then the DNC establishment will work to marginalize the protesters.

        Unlike the Democrats, the Republicans won’t encourage it at that point, but will rather back a crack down.

        Trump also triggers these people in a way that Biden won’t. He’s the unifying force for the far left and the DNC. You won’t have the entire MSM pushing the line that Biden is actively trying to establish a government based on white supremacy.


        • I agree but I’m still confused as to why Biden seems to still be trying to shore up the progressive base.


        • You think he is? I think he’s triangulating, Clinton style, between it and Trump.

          This is a perfect example:


        • He said today that he wants to transform this country. He’s also refused to nuance his fracking bans on day one nor has he repudiated free health care for illegals. I’ve yet to see any moderation in his previously stated positions.


        • jnc:

          I think that MSM coverage is largely driven by a desire to tell an anti-Trump narrative, and so I agree that much of the MSM would do a complete about face and attempt to change the narrative if Biden gets in the White House. And the DNC may well work to marginalize the protestors/rioters/looters/cultural revolutionaries in its midst. But I am not sure either will be that successful in doing so. Once you let the loons run loose, it isn’t so easy to take back control.

          I think you may also underestimate the degree to which the postmodernist ideology in which this current cultural revolution is grounded has infected the mainstream left and, as a consequence, wider society. The 1619 project derived not from hatred for Trump, but rather hatred for American society/culture. The revolt that took place in the NYT newsroom and which resulted in the ousting of a senior editor wasn’t the result of an anti-Trumpism that will go away when Trump does. Nor is the censorship and cancellation culture that has taken hold of all the major social media outlets. The forces that are causing major corporations to bend the knee to BLM and regurgitate its mantras are not going to dissolve simply because Biden is in the White House and the Dems control Congress. I fear that a Trump defeat is only going to embolden these forces even more out of a sense that they are winning. And they are.

          It may be true that old-school Dems and media elites are cynically using these forces to advance their own narrow political agenda, which does largely revolve around simple Trump-hatred. But the fact that they are using these forces doesn’t mean they can control them. The forces have been unleashed, and I suspect it is going to continue to get bad for everyone, including those that unleashed them. I hope I am wrong.


        • But I am not sure either will be that successful in doing so. Once you let the loons run loose, it isn’t so easy to take back control.

          While the events themselves were before my birth, I keep thinking Biden is in a perfect position to be an LBJ. What will likely happen is that some percentage of the activist will be glad to change tactics now that they perceive they have power, and will work through the political process to attempt to pack government agencies with lefties, pack the judiciary, write new highly progressive laws, limit free speech legally, etc. But a non-trivial contingent whose used to the constant moving of goalposts will not be satisfied with any of it . . . and so continue their assault, potentially turning more actively on the media as well as they soften their coverage for Biden.

          The 1619 project derived not from hatred for Trump, but rather hatred for American society/culture.

          I think it’s probably both. There are indicators, if I recall, that the 1619 project was promoted–if not actually conceived–as the next focus of the NYT once the Russian collusion narrative collapsed. Although I don’t doubt the sincerity of those promulgating it in regards to their hatred of America/the west/anyone with a divergent opinion of any kind.

          And while there is certainly a poster-modernist ideology at play, I’d argue there’s also an explosion of pathological narcissism (diagnosable) that has happened as millennial and older-gen-Z came of age during the explosion of social media. As so much of what’s going on is barely recognizable as a coherent political ideology or philosophy, other than being somewhere on the spectrum of far-left to lunatic-left to so-far-left-it’s-almost-radical-right . . . but this is not the disciplined subversion of 1950/60s/70s communists. There’s certainly a lot of the 1960s counter-culture in them . . . but they turn so quickly on themselves, they believe they are doing something profoundly imported by dancing in the middle of a blocked off interstate in the middle of the night for no particular reason, that burning down poor neighborhoods is a political statement of some kind . . .

          I just think a lot of it is an expression of individual and collective pathological narcissism (like, clinically) with a thin veneer of pseudo-intellectual political gobbledy-gook pasted on to it.


        • I think the left wing violence will be suppressed as Democratic Governor’s no longer have an incentive (some weird belief that the violence in their states hurts Trump’s re-elections) to not crack heads. It will make Chicago ’68 look like a mild game of tag.

          It will be fun to watch on youtube as the MSM won’t broadcast it.


        • Still don’t understand why he’s shoring up the base?

          Who else are they going to vote for? It’s in the bag for Biden.


        • To the last, I grapple with thee; From Hell’s heart, I stab at thee; For hate’s sake, I spit my last breath at thee.


        • McWing:

          To the last, I grapple with thee;

          It’s so ironic that a judicial power that is supposed to protect a defendant from malicious harassment by a prosecutor is now being used by the judge himself to maliciously harass the defendant.

          If he loses the en banc review, will he take it to SCOTUS? Probably.


        • I expect that’s mostly coming from staff and others, and it’s not about shoring up the base, it’s about advancing the agenda for most of those folks, who are chomping at the bit to take the reigns of power and implement their first 5 year plan.


      • Agreed. I think the press will change their coverage of both the Biden administration (praise will be effusive) and of COVID (Biden is very fortunate that the COVID numbers are vanishingly small right now) and so on. But the rioters, protestors, BLM and Antifa and the rest? They’ve had a taste of their 60’s revolutionary moment and they won’t surrender that just because of an election. Other factors will have to be involved.


    • I’m not convinced. I think a Biden presidency will be a kind of LBJ II: advancing of super-progressive policies, the base unimpressed and continuing to riot. Might even get worse. I agree the media will let up on the COVID panic. But the activist? Nah, I don’t think they will be much mollified.


  2. The quiet part said out loud:

    “Auditors call Facebook’s decision to prioritize free speech above other values a ‘tremendous setback’”

    NY Times is similarly appalled:

    “In a 100-page prepublication report, which was obtained by The New York Times, the social network was repeatedly faulted for not having the infrastructure for handling civil rights and for prioritizing free expression on its platform over nondiscrimination. In some decisions, Facebook did not seek civil rights expertise, the auditors said, potentially setting a “terrible” precedent that could affect the November general election and other speech issues.”


    • Facebook is in a no-win situation here. If they cave to the left, people will get pissed off and leave.


      • People are going to get pissed off and leave no matter what. There’s gonna have to be a law about these major social media sites censorship, as much as I dislike that idea, access is clearly unequal and the Communications Decency Act needs to be reformed to take away liability protections to platforms that take down anything that is not provably illegal.


    • The civil rights framing is interesting… I guess the left is jamming on the Overton Window a little bit in order to make space for a claim that you have a right to not hear anything that you disagree with, or a joke that is made at the expense of your ideology.


      • It’s all part of the “speech is violence” argument.


      • But it falls apart because only certain classes of people (the boundaries of which frequently shift) have the right not to hear anything they disagree with. If you disagree with what is Right and True in the new religion, well you have no rights or protections against THAT. Same thing with jokes or trash talking or outright hostility–only some classes are protected. Which is unsustainable, I suspect. At least not without the application of force.


    • The report criticized Facebook’s choice to leave several posts by President Trump untouched, including three in May that the auditors said “clearly violated” the company’s policies prohibiting voter suppression, hate speech and incitement of violence. The report also found that Facebook provides a forum for white supremacy and white nationalism.

      Jesus Christ.

      I think I could rewrite it, ala the Crucible:

      “The report criticized Pilgrimbook’s choice to leave several billets posted by Pastor Trump untouched, including three in May that the examiners said “clearly violated” the colony’s policies prohibiting blasphemy, spell casting and consorting with demons. The report also found that Pilgrimbook provides a forum for witch covens and Worshippers of Satan. The level of spectral evidence admitted was overwhelming, said the examiners.”


  3. Worth noting:

    “Top general has doubts Russian bounty program killed US troops in Afghanistan
    The top U.S. general in the Middle East said more information was needed.

    By Luis Martinez
    July 7, 2020”


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