Morning Report: Existing home sales jump

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Last Change
S&P futures 3377 -3.6
Oil (WTI) 41.94 -0.82
10 year government bond yield 0.64%
30 year fixed rate mortgage 2.89%


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


Exiting home sales increased 24.7% in July, according to NAR. “Homebuyers’ eagerness to secure housing has helped rejuvenate our nation’s economy despite incredibly difficult circumstances,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “Admittedly, we have a way to go toward full recovery, but I have faith in our communities, the real estate industry and in NAR’s 1.4 million members, and I know collectively we will continue to mount an impressive recovery.”  The annualized pace of sales puts it at 5.86 million units. The median home price increased 8% to $280k. First time homebuyers were up 35%.


The 50 basis point LLPA will wipe out millions in mortgage banking profit, according to an article in American Banker. “The way they did this is very, very damaging to banks and other mortgage bankers and brokers who have loans in the pipeline,” said Scott Buchta, head of fixed-income strategy at Brean Capital. “In the first month, the bulk of the fee will come out of the pockets of bankers and brokers that locked in a lot of loans.”


More than three dozen ex-Fed officials have signed a letter urging the Senate to reject Fed nominee Judy Shelton. Her crime is having the audacity to say something positive about the gold standard. Perhaps that is out of step with today’s army of progressive economists who are trying to fine-tune the economy by intervening directly in markets. If so, that is a good thing. The US Federal Reserve is thick in the biggest economic experiment the world has ever seen, and is highly susceptible to groupthink. The last think we need is a bunch Janet Yellens all saying the same thing.


The Fed has increased its balance sheet almost tenfold in the last twelve years. The US debt-to-GDP ratio (a measure of how leveraged the economy is) has increased from 67% to 107%. This should be massively stimulative to the US economy, yet the best we have been able to muster is “meh” for most of the past 10 years. Why is that? The velocity of money (basically how many times a dollar gets used) has fallen off a cliff. This has kept inflation in check, but the downside is that the US is slouching towards Japan, where disinflation (or outright deflation) has taken hold.


velocity of money



51 Responses

  1. Where do you stand on the Gold Standard? On any commodity standard? On a barter economy?

    Frankly, anything but a barter economy relies on a trusted fiat means of exchange. International criminals use diamonds. A great many folks are relying on a computer algorythm.

    What do you think?


    • The world’s currency markets have survived fine on floating rates for long enough that i see no reason to change what is working. If it ain’t broke and all…

      I am more interested in seeing whether crypto really takes off. Cause that could be a substitute for gold.


  2. Quote of the day:

    ““Don’t underestimate Joe’s ability to fuck things up.”

    That was, reportedly, Barack Obama’s assessment of his former vice president, the man he personally worked to make the Democratic candidate, and whom he, his wife, and his party have spent this week pitching as the only thing standing between Donald Trump and the end of US democracy.”

    And worth noting:

    “He’s [Biden] the first Democratic nominee since Walter Mondale in 1984 not to have an Ivy League degree.”

    The Politico piece is worth reading. This is a great observation about Biden:

    “Or, as one former Biden official put it: “I don’t think he really cares about what a 30-something Pod Save America host thinks about him, and that honestly might be why he’s the nominee.””

    Liked by 1 person

    • WSJ editorial noted that JB is so not an ideologue that he would work best from their view with a R Senate, because he would deal with them. And worst with a D Senate, because he would deal with them.


      • Mark:

        I doubt a president JB will be working much with any Senate. I suspect a president JB would be making way for president KH pretty early on in his presidency. The guy is sadly in a mental decline that is only going to accelerate.


        • I will not defend any of that and don’t even want to and for all I know you will prove correct. BDSW?

          This current President is a failure by reason of negligence, malpractice, wilfulness, icapacity, and inability to keep good advisors or listen to them. He ran all of the good ‘uns except perhaps Mnuchin off and he is a complete freaking disaster.

          He has set the bar so low that all of us here would look like geniuses in comparison. Biden looked like a genius in comparison. It just isn’t that hard.

          Liked by 1 person

        • What if I like the policies the Trump admin has pursued and implemented? I like judges, etc.? If that’s the case than my beef would theoretically be only over his style. Who gives a fuck about style? The American electorate really hasn’t considering all the lowlifes we’ve elected in the past.

          You’ll get your wish though, Biden in a landslide. Enjoy it.

          Liked by 1 person

        • Mark:

          This current President is a failure by reason of negligence, malpractice, wilfulness, icapacity, and inability to keep good advisors or listen to them.

          I’ve been pleasantly surprised at how unobjectionable most of his policy initiatives/implementations have actually been. He deserves credit on his judicial appointments, perhaps the single most important thing a Republican president should be judged on, and my biggest concern coming into his presidency. He’s been good on taxes (the elimination of the state tax deductions was fantastic and should have been done by R’s ages ago). Prior to the covid lockdown he was great for the economy. He’s made some inroads in reducing the scope of the unconstitutional regulatory bureaucracy. He certainly hasn’t been the authoritarian fascist of the left’s/Never-Trumper’s fever dreams, nor the Russian agent that all the believers in the Russian Collusion hoax have been hoping for. And unlike almost any R in my living memory, he is very good at ignoring and dismissing the tedious and disingenuous accusations of the left (racist! bigot!) which much of the rest of the R party seems to cower in front of. He fights back, which I have come to appreciate.

          The biggest problem with him from what I can see is presentation, which I admit is pretty atrocious. He is often his own worst enemy in terms of rhetoric, although I have to admit to getting occasionally secret enjoyment out of his trolling of the left. Both McCain and Romney had far more attractive styles than Trump, but neither of them could get it done. If either of them had been able to capture the so-called moderate vote, the nation would most assuredly have been spared the horror of a Trump presidency.

          In any event, I definitely get why someone might be repulsed by Trump the person. I am. But for anyone focused on policy, it’s hard for me to see why he would be deemed to have been so over-the-top objectionable.


        • Mark, I grant you that the disastrous economic shutdown was a terminal failure for Trump, But what other policies has the administration failed at?


        • Good. Portland is a racist shithole that makes Selma, circa 1959 look like Jesse Jackson’s Rainbow Coalition.

          If I was wrong they wouldn’t need to do this, correct?


        • Dems that spent over $5 million in Kansas’s Senate DOP primary, call your office.


        • Well, Portland has racists—only it’s the NuRacists that are doing the rioting. With, much like the Jim Crow era, the hagiographic complicity of the mainstream media and powerful politicians.

          They’ve just nuanced the old racism and brought in a number of ostensibly minority leftists to endorse their brand of “hard work is a white concept” racism rebranded as “anti-racism” and are getting off on being overtly racist while claiming their own guilt and inferiority for thinking that hard work and linear time were good things, when—like rule-of-law and math and literacy, they are white constructs of no real value compared to the authenticity of minorities—who in the White Fragility worldview conform to all the racist stereotypes of minorities bigots have ever uttered, the only difference being that white people were wrong for saying irresponsibility, criminal behavior, laziness, etc., were *bad* things—and for some reason in the NuRacist worldview that’s anti-racist to say.

          Portland’s apparently full of that.


        • The pandemic. Utter failure.


        • We agree, the shutdown was horrifically bad. No way an HRC would have killed the economy.


        • We probably agree. For me it has been more than the shutdown. Leaving the pandemic response in the hands of governors and claiming he had no responsibility and ignoring the facts when he could have followed the German model was bad at first and got worse the longer it went on.

          And I also agree with this:


        • Agreed, listening to Fauci and Brix was absolutely disastrous. How many Americans have died and will continue to die as various forms of quarantine go on?

          At least we can agree on the really horrific judgement on Fauci and Brix. See, common ground!


        • Wall still ain’t built in any meaningful way. Bolton era foreign policy wasn’t great. Unknown how North Korea policy will turn out. I think he’s right on China (even the tariffs, frankly) but that’s a project that would extend past even the maximum 8 years he could hope to implement them. But if he can change awareness in the public enough … that’s a start.

          I don’t think he was the best guy for the COVID-panic-demic. But would Biden be better? Any Democrat or most Republicans? Hard for me to visualize.


        • I’ve actually been pleasantly surprised by Mnuchin. He’s been a pretty decent Treasury Secretary. Reminds me of Rubin.

          Liked by 1 person

        • And Barr and Pompeo. I’d toss in the SCOTUS appointments as well as the appellates.

          As Senator Jackson said, a billion here a billion there pretty soon your talking about real money.

          Liked by 1 person

        • McWing:

          And Barr and Pompeo.

          I have been impressed by Barr more than anyone.

          Liked by 1 person

        • Biden may win but it’s not going to be a landslide.


        • Eh, I’d pick Trump over Biden. And Tulsi Gabbard over either. But you get what you get.


        • I suspect a president JB would be making way for president KH pretty early on in his presidency.

          Not necessarily. Typically, they’d want to prop him up as much as they could. So the cabinet or a Small Council will be executing the actual agenda (and setting it) and Joe will show up for signing ceremonies. Most interactions with the public will be via press secretary.

          I suspect that’s the route they will ultimately take. Look for a disgruntled Kamala Harris later on in the administration who was anticipating the scenario you describe.


        • KW:

          Yeah, it’ll be interesting to see which route they go. Although let’s hope we don’t have to find out.


  3. One of the good things about social media is being able to occasionally fact check the media.

    There was another protest incident in my area where the media reports portrayed the police as arresting people unprovoked, in part based on the Twitter feed of one of the protesters.

    I happened to stumble across a Facebook video from a resident of the area showing that the actual reason that the police were arresting the person in question was that they were smashing car windows with a hammer and spray painting BLM on the side of the car. The person then tried to hide in a crowd of protesters, the police charged and extracted them and when the person’s backpack was searched, the hammer and cans of spray paint were discovered.

    All of which was left out of the actual news reports which were limited to “Police Arrest Two at Protest”.

    Liked by 1 person

    • He won’t get as good a press as Hillary did fighting the election results?

      It won’t be close, relax. Joe in a walk.


      • I’m not sure about that McWing, but I hope you’re right.

        I get all the “so-called” economic policy everyone here loves, too bad it’s not really working during a pandemic. But honestly, the guy is seriously deficit in humanity and decency. That’s important to me, and I think it might be important to others as well. We’ll see though, you never know with the electoral college how it will shake out!


        • lms:

          you never know with the electoral college how it will shake out!

          Yeah, that electoral college is always a crapshoot!


      • I think it will probably be close. There has to be more and better to the alternative. Otherwise Trump voters disillusioned with Trump just won’t show up.


    • For their to be anything approaching their war games the election will have to be very close. Otherwise Trump with concede and depart the Whitehouse (the idea he wouldn’t is, IMO, pure fan-fiction for hard partisans the like their villains twirling their mustachios) and then Trump will embark on a narrative that says the election was stolen from him to keep himself in the public eye and undermine the legitimacy of the Biden presidency with a segment of the electorate, like the Russian collusion narrative but in the obverse.

      The “war gaming” is just LARPing by people who get to play around—typically while compensated in some way—and pretend their doing something serious.


  4. This QAnon crap is particularly embarrassing for Republicans and Trump.


    • lms:

      This QAnon crap is particularly embarrassing for Republicans and Trump.

      lol….way more embarrassing than the D’s embrace of BLM!

      Liked by 1 person

      • The question in both cases is who is it embarrassing *to*? How seriously do independent voters take q-anon conspiracy nonsense compared to active rioting, looting, and calls to defund the police and “oppress the oppressor” as a way to establish a new woke caste system in America by visiting a the sins of the grandfathers upon the grandchildren?

        I think q-anon conspiracy stuff is silly with rare real world consequences, and nothing that could lead to a long term tyranny of any kind, where as the BLM/antifa Nexus seem to be hoping for a people’s revolution ala Mao.


      • Way more.


        • I’m guessing you probably don’t see anything at all embarrassing in the Dem’s embrace of BLM.


        • Or the the obviously fake Russia Collusion conspiracy theory.


        • I do see a huge disconnect when local Ds fail to react to actual rioting with public safety measures. If that is understood as locals not wanting to piss off BLM then they should be embarrassed. BLM as an idea doesn’t bother me at all. Peaceful protests are fine with me. Violence and looting? Bullshit.

          Liked by 1 person

        • Mark:

          I do see a huge disconnect when local Ds fail to react to actual rioting with public safety measures. If that is understood as locals not wanting to piss off BLM then they should be embarrassed.

          I understand that failure not as not wanting to piss off BLM, but rather as “negligence, malpractice, wilfulness, incapacity, and inability” to do the job they were elected to do.

          BLM as an idea doesn’t bother me at all.

          I suppose, then, that all Q-Anon has to do is to change its name to some anodyne slogan like “Love not Hate” and it would become less a reason for embarrassment to Texas Republicans?

          The fact of the matter is that BLM is an organization, not an “idea”. But as an organization it does espouse a lot of ideas. For example, it promotes the idea that there exists “rampant and deliberate violence inflicted on [black people] by the state.”

          It promotes the idea that Michael Brown and now George Floyd were victims of this “state-sanctioned violence and anti-black racism”.

          It promotes the idea that “cisgender privilege” is a real thing that both exists and needs to be “dismantled”.

          It seeks to “disrupt the Western-prescribed nuclear family structure requirement”.

          It desires to “defund the police”.

          The founders of BLM describe themselves (in a section of its website labelled “Herstory”…get it?) as “radical black organizers” of an “ideological and political intervention”. They have elsewhere described themselves as “trained Marxists”.

          The fact of the matter is that the worldview of BLM is informed by the philosophy of intersectionality (the website is infused with intersectional language), which itself is grounded in marxist ideology, and it masks this worldview behind the unobjectionable slogan “black lives matter” precisely in order to 1) dupe inattentive people into showing support for things that do not in fact garner a lot of support and 2) to engage in the typical semantic bait and switch that is the hallmark of leftist political movements by labeling controversial and contentious ideas with words that are more widely understood to represent unobjectionable and appealing ideas.

          It seems to be working.


        • The way you have described the “movement” as opposed to the slogan I agree that Ds should be quick to distinguish and distance from the movement, even if they agree with the harmless slogan. I also agree that in particular the Mayor of Portland is incompetent and an utter failure. Not as familiar with the others…I have a cousin in Portland.

          None of which excuses embracing Q-anon, but I don’t think Rs generally embrace it and hope that continues to be the case, despite the recent flowering of a half dozen or so candidates who do. And despite DJT.


        • Mark:

          The way you have described the “movement” as opposed to the slogan I agree that Ds should be quick to distinguish and distance from the movement…

          What does the fact that they haven’t been tell you?


        • This seems to me a really good question. I think it probably has something to do with the bubble they inhabit, where there are more people (in their personal sphere) who would be offended by that than almost anything else. Many donors would probably object to it strenuously–saying that nothing can be allowed to cast any pall or question over the Moral Urgency and Importance of BLM.

          I think it’s all about how it would play within the Blue checkmark Twitter/MSM bubble. And the number of stealth antifa/NuMarxists in power in the party itself.

          Ultimately, given that Biden doesn’t come off as any less racist than Trump by any metric I can think of, it seems pretty clear that ideology is the driving factor, so BLMs primary purpose as a anti-capitalist/marxist/revolutionary movement is actually the important factor. Cloaking it in race issues for a large segment is just about making it palatable for the normies.


  5. Mark, I just read this That’s a long list of conservatives in powerful positions saying the things you and I have said or thought, and some I didn’t think of. I appreciated the link.


    • The same people who were all in on the Iraq invasion and are fighting tooth and nail the Afghanistan withdrawal are endorsing Biden. So, the permanent war people want Biden to win.

      What does that say?


    • That list of horribles is pretty ironic. To me, anyone who professes concern over the undermining of confidence in our elections, the preaching of a “dark and pessimistic view of America”, and the incitement of “political, racial, and ethnic divisions”, but then goes on to endorse the Democratic nominee has pretty much instantly destroyed their credibility. It’s been the Democrats who have not only been undermining confidence in the 2016 election since the day after it happened with the Russia Collusion hoax, but have continued to lay the groundwork for a similar effort should Trump manage to win in 2020. It’s been the Democrats who have been pushing the “dark and pessimistic” notion that the nation is and always has been a fundamentally racist society since its inception, and continues to be defined by the existence of “systemic racism”. It’s been the Democrats that have both embraced and relentlessly promoted the identity politics of intersectionality which not only foment but indeed depend upon political, racial and ethic divisions.

      If these are the grounds on which they rest their support for their opposition to Trump and support for the Democratic nominee, to me these people have simply established themselves as either fools or charlatans.


      • To me, anyone who professes concern over the undermining of confidence in our elections

        Pretending that concern over universal mail-in voting is crazy is either woefully ignorant or intentionally deceptive. It will be much more prone to fraudulent or at least questionable attempts at vote-harvesting than absentee ballots. It’s not the same thing as absentee ballots (although they often say it is, which is just a lie). Anyone who has experienced a large project involving the general public with no time to test or establish enforceably protocols should know that, first time out, it’s going to be chaos.

        I think the “rigging” may actually be SPECIFICALLY to undermine public confidence in the election result–thus what starts out as Trump trying to steal the election by preventing universal mail-in voting will become, like magic, Trump and Russian having stolen the election by leveraging universal mail-in voting to steal the election. And the outcome, should Trump win, will be that there will be lots of problem ballots and there will be plenty to point to to question the legitimacy of a Trump victory.

        Of course, should Biden win in something less than a landslide (and a Biden landslide is highly unlikely, IMO) then Trump will do the same thing.


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