Vital Statistics:
Last | Change | |
S&P futures | 3221 | 8.6 |
Oil (WTI) | 41.33 | -0.12 |
10 year government bond yield | 0.58% | |
30 year fixed rate mortgage | 2.98% |
Stocks are flattish as we await the Fed’s decision at 2:00 pm this afternoon. Bonds and MBS are up.
Mortgage Applications fell 0.8% last week as purchases declined 2% and and refis fell 0.4%. “Mortgage rates remained near record lows for conventional loans last week, and refinances in the conventional sector continued to slightly increase. However, rates on FHA loans rose, leading to an almost 18 percent drop in FHA refinances,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Homebuyers stepped back slightly, and there was a larger drop in purchase application volume for FHA, VA, and USDA loans. This trend, along with the fact that average loan sizes are increasing, indicate that prospective first-time buyers are being impacted more by the rising economic stress caused by the resurgence in COVID-19 cases, as well as the uncertainty on how the next round of government support will take shape.”
Quicken is looking to raise $3.8 billion from its IPO. It intends to sell $150 million shares to the public at $20 to $22 per share. The new shares will trade under the symbol RKT. No formal date for the IPO has been announced yet.
Home prices rose 4.5% annually in May, according to the Case-Shiller Home Price Index. Price increases declined compared to April, however. I suspect that home prices appreciation will re-accelerate in June as lower rates and higher demand push prices back up. Given what companies like Redfin are reporting, bidding wars are now commonplace, and non-contingent offers (without financing or inspections) are winning the day.
HUD is tightening requirements for self-employed borrowers and the use of rental income to qualify, effective immediately.
Consumer confidence fell in July after a big surge in June. Reports of new COVID flare-ups in California, Texas and Florida dampened sentiment. Interesting factoid: despite the unemployment rate and jobless claims, the percentage that think jobs are “plentiful” is higher than those that think jobs are “hard to get.” Not what you would normally expect with double-digit unemployment.
The homeownership rate increased to 67.9% in the second quarter, according to Census. This is the highest percentage rate since 2007. The jump is dramatic and I guess represents the urban renters fleeing to the suburbs. I wonder if there were data issues though and it might be revised downward later.
Filed under: Economy, Morning Report |
Three Subjects
A. Congressional Translator, courtesy of Politico:
1) “WE’VE HAD A GOOD MEETING, we’re making progress, good discussions”: Man, we’re screwed. This means nothing is going on, and the meeting might as well have been canceled. This is filler — and the worst kind of filler at that. When you’re having a good meeting, you don’t need to say it. You just have it. And, more times than not, when you have a good meeting, you don’t leave until that good meeting comes up with something better than “we had a good meeting.”
2) METAPHORS GALORE: We — meaning the American people and their elected and unelected representatives in D.C. — have become way too reliant on stupid sports metaphors to illustrate progress or lack thereof. The 20-yard line, the 5-yard line — whatever. Imagined progress on a football field does not equate to real progress, and it’s a cheap way to try to say the process is moving. Thanks to the NYT’s EMILY COCHRANE, even MEADOWS is beginning to realize that it’s lame: “Somebody didn’t want football analogies, so I still think we’re doing the second inning,” he said walking out of the Capitol on Tuesday evening.
3) MCCONNELL-ESE: WHEN MCCONNELL SPEAKS, you must listen, because he doesn’t say a lot. When the Kentucky Republican suggested it is up to MEADOWS and MNUCHIN to negotiate with the Democrats, that’s MCCONNELL gently tapping the administration under a speeding fast bus. Sure, MCCONNELL is saying, you figure it out with PELOSI and SCHUMER, and let me know how it goes. This means he wants deniability and distance. And, by the way, when MCCONNELL said he was opposed to providing billions for a new FBI building in downtown Washington as part of this bill, he was ensuring the tire tracks stayed nice and bright on President DONALD TRUMP’S back.
— SOMEHOW, THE DEMOCRATS need our Google Translator too, because they were asking the Treasury to find out if MCCONNELL really needed a liability overhaul as part of this bill. That’s the only thing he’s ever said in this negotiation: that if there is no liability reform, there is no deal. If you listen closer, MCCONNELL isn’t ruling out a negotiated settlement.
4) UNDERSTANDING PELOSI AND SCHUMER. The speaker opened her evening media availability Tuesday night with this: “We’re going to be very brief because we have work to do.” And, in her dialect this meant, “God, the Republicans are so bad, and we have to at least try to make something of their mess.”
— PELOSI then said: “We are going to meet again tomorrow. But part of what we are doing now is really airing our differences. There is discovery in understanding where there might be opportunity or not.” Read that as: “Man, we hope there’s an agreement, but getting there will be trying to do backflips on dental floss.”
5) TRUMP’S SILENCE: untranslatable. It’s like Shalom in Hebrew: It can mean hi, goodbye or peace.
6) “WE’RE NOW GOING TO SEE THE PRESIDENT TO UPDATE HIM … TALKS ARE JUST BEGINNING”: MNUCHIN said this Tuesday evening as he left the Capitol. This means talks are nowhere, and the administration is beginning to get frustrated.
OK, NOW, HOW TO KNOW WE’RE CLOSE: A deal will come together at some point — we think! — and here’s what it will look like. Progress will be rolling along, and details will leak out signaling momentum. Members will then freak out, and we’ll hear that the language doesn’t match the intent of the negotiators. Everyone will yell and get back in their corners. Some drastic action will shake everything loose — a late-night phone call, a meeting with the president or some sort of wild meeting.
THEN, INVARIABLY, we will have the RAND PAUL/TED CRUZ holdup. Will they slow the inevitable down, or will they fold for some token amendment vote? We’ll then have to wait for TRUMP’S tweet, which will be promised, but will somehow come hours later than expected.
THIS WILL ALL END at some ungodly hour, with MCCONNELL shuffling paper on the floor, announcing the deal, SCHUMER taking a lap alongside him and everyone leaving Washington behind for what’s left of the August recess.
B. Incubus and Succubus
https://tinyurl.com/IncubusAndSuccubus
C. My take on the Barr hearing: Way too many Congresspersons want to hear themselves speak. The few good interrogations were lost in the muddle of self aggrandizement by Ds and fawning hero worship by the Rs.
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Mark:
The few good interrogations….
Can you advise on which ones these were? Virtually every video I have seen so far was just over-the-top congressional theater. I am genuinely interested if any Rep asked substantive questions and allowed him to give substantive answers.
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I heard two good questions, and from the same guy. They were along the lines of “Do you think it is appropriate for a nominee to accept foreign electoral help?” Answer: “That depends on what is meant.” “Do you think it is appropriate for a nominee to seek foreign electoral help?” Answer: “No.” There may have been one other useful exchange. As I said, it was buried in what you have aptly described as theater. My guess is they must get more work done in closed sessions. Right? Ya think?
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Interesting write up on the hearings:
https://www.theatlantic.com/politics/archive/2020/07/bill-barr-testimony-house-democrats/614689/
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That guy seems to have watched the same hearing I did.
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When Representative Hakeem Jeffries of New York asked the attorney general what he’d do if Trump lost the election in November but refused to leave office in January, Barr replied: “If the results are clear, I would leave office.” It was a vague and evasive answer, but there was little follow-up.
What is vague and evasive about that?
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I’m fascinated that Democrats think the Federal government will follow Trump orders after Biden’s sworn in. It’s boob bait for the rubes, right?
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That’s all?
https://americanmilitarynews.com/2020/07/11900-us-troops-leaving-germany-6400-returning-home/
WTF Trump?
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I guess. But that they believe that it’s a serious risk suggests something about their mental capacity. But they thought the same thing about Bush in 2004. But they are also folks who see anything not going their way as somehow immoral or unjust or criminal.
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It seems pretty concrete. If there’s one state in play that would flip it and it looks like it was full of fraud, Barr is saying he’d stick around to sort shit out. However, if he loses decisively enough (the likely outcome) then he’d leave–but of course, Trump will, too. So it’s fan-fiction from unserious people, not a serious question.
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I am not sure what the democrats hoped to accomplish with the “i reclaim my time” schtick
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It was hilarious and now is accepted practice. I suspect Biden (or whomever ends up controlling him) will not allow any administrative officials to appear before the House if it’s controlled by the Republicans.
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Interesting read. I always like seeing West do interviews. He usually refuses to take the obvious bait like the interviewer attempts here:
https://www.vox.com/future-perfect/2020/7/29/21340730/cornel-west-coronavirus-racism-way-through-podcast
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Interesting read:
“Why we need a little skepticism, and more evidence, on Russian bounties
By David B. Rivkin Jr. and George S. Beebe,
07/05/20 05:00 PM EDT”
https://thehill.com/opinion/national-security/505804-why-we-need-a-little-skepticism-and-more-evidence-on-russian
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