Vital Statistics:
Last | Change | |
S&P futures | 3372 | 23.6 |
Oil (WTI) | 42.83 | 0.52 |
10 year government bond yield | 0.63% | |
30 year fixed rate mortgage | 2.85% |
Stocks are higher this morning on no real news. Bonds and MBS are down.
Job openings increased to 5.9 million at the end of June according to the JOLTs jobs report. Hires fell to 6.7 million, but that was the second-highest reading for the series. The quits rate fell to 1.9%, which is to be expected during a recession.
Small Business optimism slipped in July, according to the NFIB. “This summer has been challenging for many small business owners who are working hard to keep their doors open and remain in business,” said NFIB’s Chief Economist Bill Dunkelberg. “Small business represents nearly half of the GDP and this month we saw a dip in optimism. There is still plenty of work to be done to get businesses back to pre-crisis numbers.”
The Intercontinental Exchange bought Ellie Mae from private equity firm Thoma Bravo for $11 billion last week. Note Thoma Bravo paid $3.7 billion for Ellie Mae just a year before. The Intercontinental Exchange is best known for owning the New York Stock Exchange, but it has been building a mortgage business. ICE owns MERS and Simplifile, and believes the acquisition of Ellie Mae gives it access to the entire mortgage value chain, from origination to post-closing. Analysts did raise their eyebrows on the announcement conference call regarding the price, but it does make strategic sense for ICE to do the acquisition. That said, Ellie Mae is expected to do about $470 million in EBITDA this year, and 23x EBITDA is not cheap.
Black Knight is buying Optimal Blue as well. On the earnings conference call, Black Knight explained some of the reasoning behind the acquisition:
Sure. Good morning Tien-Tsin. Thank you. Yeah, we’re obviously very excited with Optimal Blue. We think that there are a lot of opportunities there. In addition to the reasons that we’re excited to acquire them, they’ve got a really sticky network effect in their marketplace where they bring mortgage originators and investors together. And we see a lot of cross-sell opportunity in terms of us selling some of our capabilities into their client base and for them to sell some of those capabilities to our client base. So as we look at it, from that perspective, we think there are, as you can imagine with any acquisition, you always find the obvious. And then there’s always hidden gems, we always look for, and we see some of those as well, such as, the trading platform that they have. We’ve been talking about that for a while, adding our loans — seasoned loans on top of that, as well as all of our data and our analytics that have tremendous insight into those loans and facilitating trading. So we see a lot of areas of revenue synergy from that perspective.
Meanwhile, CoreLogic continues to be pursued by Cannae (which sold Optimal Blue to Black Knight). Cannae is offering $65 in cash for Corelogic, and hopes to call a special meeting of stockholders to replace half of CoreLogic’s Board.
30 day delinquencies increased in May to 7.3% of all mortgages, according to CoreLogic. Frank Martell, CEO of CoreLogic had this to say:
“Government and industry relief programs have helped to cushion the initial financial blow of the pandemic for millions of U.S. homeowners. COVID-19 and the resulting pressures continue to influence the economic activity of many households. Barring additional intervention from the Federal and State governments, we are likely to see meaningful spikes in delinquencies over the short to medium term.”
Meanwhile, the number of mortgages in forbearance fell for the 8th straight week, according to the MBA. Forbearances fell by 23 basis points to 7.44% of homes with a mortgage. Many borrowers who were making payments while in forbearance decided to exit their plans.
Filed under: Economy, Morning Report |
Good read:
“The Grifters, Chapter 2 – N95 Masks
August 11, 2020 | Ben Hunt”
https://www.epsilontheory.com/the-grifters-chapter-2-n95-masks/
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Worse than I thought and in-freaking-credible. Thanks for the link, Joe.
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While I like the overall take of the piece, I do think that Trump was justified in going after 3M after they cleared the construction N95 masks for medical use and discovered that in the meantime 3M had exported the 35 million.
Assuming the piece is accurate, if I was Trump I’d have asked Mark Cuban to take charge of the issue.
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Trump hates and is afraid of Mark Cuban, AFAIK.
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Figures.
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“Biden won’t rule out naming donors as envoys, despite corruption concerns
“It’s totally un-American to have people slave away for years to gain the skills to do this, and others just write a check and show up,” one former diplomat said.
By NAHAL TOOSI
08/11/2020 12:46 PM EDT”
https://www.politico.com/news/2020/08/11/biden-donors-envoys-393594
That’s completely wrong. There’s nothing more American than that.
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Worth checking out. It’s on Netflix:
“‘Mr. Jones’ and the deadly consequences of shoddy journalism
Opinion by
Sonny Bunch
July 31, 2020 at 7:00 a.m. EDT”
https://www.washingtonpost.com/opinions/2020/07/31/mr-jones-deadly-consequences-shoddy-journalism/
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this one hits home and is on my list to watch.
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Thought of you when I read the write up.
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Some of the replies . . . it’s like, there’s no reason to talk to people about things. They’ve just got a voicebox that you pull the string and they say “orange man bad” or whatever rightw-wing boogieman of the day is.
Duranty could be a star on Fox News.
Seriously, what?
sounds like a Republican congressperson’s dream for America
Again, I think not.
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its Kamala
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Guess she doesn’t think he’s a racist anymore. Wonder what actions he’s taken since March to show that he went from Klansman to White Nighter?
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he’s old and she figures she might get the top slot without having to win it on her own.
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Hey it’s just politics. They are both pros and know it’s not personal, it’s just fodder for the base and the press.
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very true.
i didn’t think it would be her because of the policy/da problem. but i’m not sure there’s a really good alternative.
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I think Biden may be savvier than I usually give him credit for and is ahead of the curve for once by predicting a backlash to ongoing the BLM riots.
She’s the perfect person to counter the rioters/protesters/progressive base while he remains above the fray. It’s real hard to make the racism charge stick against her. Or to put it another way, it’s another example of Biden’s Clinton like triangulation which he’s been doing the entire campaign.
That’s the one thing that Trump can really leverage to boost himself, turning the election into a referendum on the riots.
If Trump was smart he would run a series of campaign ads centered around the theme of what the media isn’t telling you and just use footage from Portland, Seattle, and now Chicago.
Because the media is just as much his opponent in the 2020 election as the Democrats are.
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I actually think this would be a bigger problem than the racist charge:
“Harris: ‘I believe’ Biden accusers
By Michael Burke – 04/03/19 09:20 AM EDT ”
https://thehill.com/homenews/campaign/437107-harris-i-believe-biden-accusers
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Fascinating phrasing.
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Hilarious!
https://www.breitbart.com/national-security/2020/08/13/chinese-state-media-applauds-kamala-harris-she-punished-criminals-ruthlessly/
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Bitch is wack!
https://www.redstate.com/bonchie/2020/08/13/watch-politician-goes-full-fascist-with-crazed-rant-on-masks-and-social-distancing/
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Same.
https://www.stripes.com/news/taliban-unlikely-to-support-keeping-us-counterterrorism-in-afghanistan-analysts-say-1.641025
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Yeah whitey, get the fuck out!
https://hotair.com/archives/john-s-2/2020/08/13/seattle-gentrification-protesters-give-house-give-black-people-back-homes/
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This is awesome leadership.
https://reason.com/2020/08/13/minneapolis-tells-residents-with-riot-wrecked-buildings-they-cant-clean-up-until-theyve-paid-their-2020-property-taxes-in-full/
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“If an when” . . . apparently CNN can’t wait for president Harris to assume her regency!
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Worth noting:
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Of Ark Restaurants’ five Manhattan restaurants, only two have reopened, while its properties in Florida — where the virus is far worse —
This doesn’t feel accurate.
Deaths by state has New York as 169 for every 100,000 people and Florida as 41 per ever 100,000 people. And Florida recently got caught out for reportng 100% positive on COVID testing, which kind of throws those numbers into question.
But ultimately, that’s the downside of being both a state and a city where it’s hugely expensive to do business in: big changes turn barely affordable into unaffordable, where as places with lower costs of living and a lighter touch on taxes make it easier to survive a downturn.
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If it is worth doing, it is worth overdoing
https://www.kansascity.com/news/nation-world/national/article244861827.html?fbclid=IwAR0n0QiWVHVxVE8FPLgmi8-tJK-2NYFkeOf1WPZkknuUnOBC9YI05qaYWN0
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Just straight up virtue signalling…they aren’t even trying to hide the fact.
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And don’t understand or care that these sorts of easily mocked gestures actually undermine the pubic acceptance of it.
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That’s just stupid.
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