Morning Report: Initial Jobless Claims stuck at 800k

Posted on October 8, 2020 by Brent Nyitray

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

We will have a lot of Fed-speak today, mainly in the afteroon.

Initial Jobless Claims came in at 840,000 last week. It seems that we are stuck at a new level of around 800k a week.

This image has an empty alt attribute; its file name is initial-jobless-claims.jpg

The MBA’s Mortgage Credit Availability Index fell again last month to hit a 6 year low. The MBA believes it is probably due to a curtailment of ARM loans ahead of the transition from LIBOR to SOFR.

“Mortgage credit supply decreased in September to its lowest level since February 2014, driven in part by a 9.5 percent decline in the conforming loan segment,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “This reduction was the result of lenders discontinuing conforming adjustable-rate mortgage loan offerings in advance of the September 30, 2020, application deadline for GSE-eligible LIBOR-indexed ARM loans.

About a quarter of all borrowers in forbearance are still making their mortgage payments. Of the 3.4 million borrowers in forbearance, 840k are current on their mortgages. Given that servicers were required by the CARES Act to record mortgages in forbearance as current, many borrowers chose to enter forbearance as a precaution.

The Northeast and Mid-Atlantic states are most at risk to the economic effects of the pandemic, according to a study by ATTOM Data.

“The U.S. housing market continues to show remarkable resilience during a time of widespread economic trouble and high unemployment stemming from the virus pandemic. But amid continued price gains, pockets around the country face greater risk of a fall, especially in and around the Northeast,” said Todd Teta, chief product officer with ATTOM Data Solutions. “There is much uncertainty ahead, especially if another virus wave hits. We will continue to closely monitor home prices and sale patterns to see if, how and where the pandemic starts rattling local markets.”

As the economic woes drag on, a crisis in rental housing is building as tenants cannot pay their rent and small landlords who depend on that rent cannot make mortgage or property tax payments. Affordable housing advocates are urging more action from the government to do something. “The longer the federal government waits to act, the steeper the financial cliff that renters will be pushed off when the eviction moratorium expires this winter,” Yentel said. If the 800k weekly initial jobless claims is the new normal, we will have a crisis of epic proportions.

Filed under: Economy, Morning Report |

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83 Responses

  1. markinaustin, on October 8, 2020 at 10:11 am said:

    There is apparently a bipartisan taste for an airlines bail out.

    Get that done quickly and in a rational world stimulus could continue one step at a time. But just getting that agreed hole filled will be like pulling teeth, I would guess.

    Suppose there is no stimulus package before January. But further suppose there will be one in January, regardless of the election results. Would that be soon enough to reverse the damage in the rental market?

    I get the notion that the airline industry is a national security priority, btw. I think that is why there is bipartisan support for it.

    Liked by 1 person

    Reply
  2. lmsinca, on October 8, 2020 at 11:23 am said:

    I thought this was funny in response to the President’s tweets during the debate last night.

    “Your boy alienated women for 90 minutes and then a fly stuck to his head.

    Go to bed.”

    And Scott I do know what gaslightling means but not in the context you continually use it so I’m not interested in YOUR definition.

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  3. jnc4p, on October 8, 2020 at 11:39 am said:

    Because COVID-19 behaves differently if you are classified as an employee.

    https://www.salon.com/2020/10/07/saturday-night-live-found-a-covid-loophole-for-its-live-audience-by-paying-them-as-employees_partner/

    No one takes the regulations seriously any more.

    Liked by 1 person

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  4. jnc4p, on October 8, 2020 at 12:44 pm said:

    More BS under the guise of fighting COVID:

    “Before Reopening, California Counties Must Meet “Equity” Standard”

    https://www.cato.org/blog/reopening-california-counties-must-meet-equity-standard

    Liked by 1 person

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  5. jnc4p, on October 8, 2020 at 1:53 pm said:

    This strikes me as a good take:

    “Third, Joe Biden and Kamala Harris decided to run a professional campaign. Instead of trying to please those of us who consume large amounts of media, they have ruthlessly and effectively focused their campaign on the Exhausted Majority — people who are disgusted by and semidetached from politics in working-class homes in the Midwest, in retirement communities in Florida, in suburban cul-de-sacs everywhere.

    Kamala Harris’s debate performance was the perfect implementation of the strategy and the perfect illustration of why it is succeeding. A lot of the conversation about who “won” the debate misses the crucial question of who effectively implemented their campaign’s strategy. Harris did. The Republicans don’t have a strategy, so Mike Pence’s performance was beside the point.”

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    • markinaustin, on October 8, 2020 at 2:23 pm said:

      I do think that is D strategy, Joe, but it is simply picking low hanging fruit. The nation is not one whit more liberal today but it is obviously exhausted.

      Before JB was nominated he was beating DJT in the polls. That was when you were predicting a Warren candidacy, I think, but I called her MS. 39%, b/c the nation wanted out of Trumpland, not into Warren land or Bernieland. Only Ds who could make that case were going to survive, and then coalesce around the safe choice, whom I thought was going to be AK, and who I wanted to be Bullock. There was a time when I was frightened that EW and Bernie would join forces and turn out the left wing base, but there was fortunately not enough wind to fill those sails.

      Harris convinced JB she could play the part of normal, after having played so many different angles as a candidate, including the part of arch anti-Joe.

      She got to play normal last night. Not quite Oscar level stuff, but it was a “B” movie to begin with.

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    • Brent Nyitray, on October 8, 2020 at 4:26 pm said:

      The problem is Trump isn’t running against Biden, he is running against the unhinged left.

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      • jnc4p, on October 8, 2020 at 5:33 pm said:

        That only works if they are visible. The riots have mostly died down.

        Biden is running against Trump and winning. And Trump is playing right into it.

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        • Kevin S. Willis, on October 8, 2020 at 8:08 pm said:

          I still argue Trump has a good chance of winning–but so does Biden. I think it will probably be close, and messy, and the end of the day. But it might be a significant and obvious victory one way or the other, who knows. I’m not sure Biden is winning, but I’m also not sure we’ll know until the election.

          That being said, Trump always seems to be playing right into it. He makes more unforced errors than any politician at his level I think I’ve ever experienced.

          Like

      • Kevin S. Willis, on October 8, 2020 at 8:09 pm said:

        Which I’m all for. If Trump loses but so do lots of local leftists, and Republicans learn the right lessons from both his victory and his loss (doubtful) and if a Biden presidency ends with more conservative governors, state legislatures, mayors, and congresscritters . . . that would be a positive.

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  6. lmsinca, on October 8, 2020 at 2:16 pm said:

    Wow, this seems to be rather historic in my understanding. From the New England Journal of Medicine:

    Covid-19 has created a crisis throughout the world. This crisis has produced a test of leadership. With no good options to combat a novel pathogen, countries were forced to make hard choices about how to respond. Here in the United States, our leaders have failed that test. They have taken a crisis and turned it into a tragedy.

    Although we tend to focus on technology, most of the interventions that have large effects are not complicated. The United States instituted quarantine and isolation measures late and inconsistently, often without any effort to enforce them, after the disease had spread substantially in many communities. Our rules on social distancing have in many places been lackadaisical at best, with loosening of restrictions long before adequate disease control had been achieved. And in much of the country, people simply don’t wear masks, largely because our leaders have stated outright that masks are political tools rather than effective infection control measures. The government has appropriately invested heavily in vaccine development, but its rhetoric has politicized the development process and led to growing public distrust.

    The United States came into this crisis with enormous advantages. Along with tremendous manufacturing capacity, we have a biomedical research system that is the envy of the world. We have enormous expertise in public health, health policy, and basic biology and have consistently been able to turn that expertise into new therapies and preventive measures. And much of that national expertise resides in government institutions. Yet our leaders have largely chosen to ignore and even denigrate experts.

    https://www.nejm.org/doi/full/10.1056/NEJMe2029812?query=featured_home

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  7. jnc4p, on October 8, 2020 at 4:08 pm said:

    This is totally desperate and idiotic.

    “Health officials scrambling to produce Trump’s ‘last-minute’ drug cards by Election Day

    As officials debate how to get Trump’s name on the cards, health officials warn of a taxpayer-funded boondoggle to bolster president’s flagging poll numbers.

    By DAN DIAMOND
    10/08/2020 12:04 PM EDT

    Caught by surprise by President Donald Trump’s promise to deliver drug-discount cards to seniors, health officials are scrambling to get the nearly $8 billion plan done by Election Day, according to five officials and draft documents obtained by POLITICO.”

    https://www.politico.com/news/2020/10/08/seema-verma-mark-meadows-drug-card-plan-427950

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    • Kevin S. Willis, on October 8, 2020 at 8:11 pm said:

      Yeah. Although it’s not novel or unique to Trump. This sort of shit happens in government bureaucracies all the time. Lots of initiatives are desperate and idiotic, although rarely national news.

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  8. lmsinca, on October 8, 2020 at 7:26 pm said:

    Well I assume I’m part of the deranged left at this point. We have a president who is devolving into a parody of good governance. He’s his own worst enemy and unfortuantely for him, and the Republican Party, they’ve swallowed his own version of the “Cool Aid” (is that gaslighting too) and I think they’ll pay a price.

    As an actual Indepedent, I would prefer a two party system (three would be even better) that works with the people of America and finds common ground for compromise. Our country is so much worse off than 4 years ago that it’s nearly unconscionable, and for anyone here to doubt the seriousness of the situation with COVID and ignore the BEST science makes me a bit sad about the state of affairs here at MFP.

    JNC, as a senior, I am not expecting anything from the president. I don’t want his help in an election year to try to buy my vote for $200. Seniors are leaving the party in droves since we’ve become the “EXPENDABLES”

    I would prefer a clear and concise definition from the Republicans about how they’re actually going to both protect the health care many Americans already have and how they plan to feed those who have been decimated by their lack of leadership on the virus.

    I worked at a local food bank yesterday and to be honest it was heart breaking. So yeah I’m deranged, angry, disgusted and disappointed in my so-called friends here who are not speaking out against the worst president in my life and probably yours too.

    Of course, I’m unhinged, and I’m a much more fortunate person than many of the people I interact with.

    True story here: My scientist daughter called me in mid-March and said “Mom, we’re not going to be able to see each other for a long time and you and dad need to stay home, we’re all going to get it”. We followed her advice and even though I haven’t seen my grandchildren or children in almost a year, we’re still alive. That seems to be important to them.

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    • Let the mutherfuker burn!, on October 8, 2020 at 7:43 pm said:

      Our country is so much worse off than 4 years ago that it’s nearly unconscionable, and for anyone here to doubt the seriousness of the situation with COVID and ignore the BEST science makes me a bit sad about the state of affairs here at MFP.

      This was me in 2012. It passes, the irreparable damage was done and the country fundamentally changed for the worse. Yet I persisted, as will you.

      Your wish will be granted soon.

      Like

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    • Kevin S. Willis, on October 8, 2020 at 8:04 pm said:

      Well I assume I’m part of the deranged left at this point.

      Assuming you haven’t gone down to burn affordable housing in minority neighborhoods in the name of justice, or tossed molotov cocktails at police cars, I’m going to say no.

      Ultimately it’s always bewildering to us why people can’t see what we see, and we feel somewhere between 90% and 110% certain that we are rock solid right and so people who don’t see it our way just HAVE to be crazy. But they aren’t, they are just operating from a different knowledge and experience base.

      Ultimately there is some sort of objective reality, but humans are terrible judges of our own ignorance, most of the time. So often we feel we have a balanced understanding of situations, politics, etc., when our views are in fact extremely distorted. Which is not to say your view is or my view is, but the fact is we don’t know–and thinking you are right and being right feels EXACTLY the same as being wrong and feeling you’re right, generally or granularly on specific issue.

      Also, some people find things very easy to ignore. A president may be the worst ever on a particular policy of group of policies, but if you don’t care about THOSE policies but care about policies others don’t care about, you can look at that person and reach entirely different opinions and have an entirely different sense of how good or awful that particular politician is.

      So I wouldn’t say you’re part of the deranged left, but perhaps we both wonder: how can we be looking at the same set of facts? And reach such disparate conclusions? I think it’s all bias, assumptions, a priori knowledge, context, and priorities. And the pull to tribalism. We identify with a group, ideological or political, and that identification becomes very important to us and distorts our perceptions (or certainly can) and is VERY difficult to have any awareness of.

      He’s his own worst enemy and unfortuantely for him

      See? There is so much we can agree on. I personally don’t feel there is any disputing this.

      they’ve swallowed his own version of the “Cool Aid”

      Kool Aid–a reference of being so brainwashed by a cult you’ll actually drink poison because the leader tells you to–is a metaphor for the broad leverage (and willingness to be flexible) ALL people have with their political or ideological or cultural identity group. We all do it to some extent. We’ve get people passes when they know the handshakes. There’s a reason all sorts of people in the press and the left generally are giving rioters, looters, and even murderers passes they they would NEVER in a million years give right wing folks doing the same sort of thing.

      At the same time, there’s a reason a light of Republicans and conservatives give Trump a pass for behavior they would never tolerate–and would mock ceaseless–if it came from a Democrat. Group identity is powerful and important.

      As an actual Indepedent, I would prefer a two party system (three would be even better) that works with the people of America and finds common ground for compromise.

      Me too! At the same time, in the name of that noble cause, few people on either side want their party and representatives to allow one side to exploit tricks or use compromise as a tactic to get whatever they want. And a lot of people on both sides see a 50/50 compromise as being 90/10 against them–and sometimes it is, and sometimes it just looks like that. But it makes compromise difficult, especially when voters on both sides punish politicians for compromise.

      And that doesn’t get into politicians compromising with the voters–which would be nice if they would do, but most politicians are too distant from the general public to have any sense of what the consequences of their policies are in the real world.

      Our country is so much worse off than 4 years ago that it’s nearly unconscionable

      From my perspective, we are specifically worse off than we were 1 year ago. That’s because of COVID, and a lot of it was the response, most of which has a strong local component, and even the federal component has a lot of institutional bureaucracy that really isn’t on Trump. But it ain’t great, no.

      Before then the economy was performing at levels it hadn’t since the dot.com boom. That ain’t nothing, even if most of that cannot be credited to one guy in an oval-shaped office.

      and ignore the BEST science

      In my opinion, this becomes very subjective and arguable. Certainly, the recommendations and the forecasts were not only not the best science but were falsely presented as being as being the product of knowledge we didn’t have. Even now, we get numbers that are given without context or any sense of their reliability, which is definitely something under 100% reliable. 90% reliable? 50% reliable? I think a lot of what we think we knew early on is wrong, and I think a lot of what we know right now is wrong. Science is not a magic oracle that gives us all the facts immediately, it’s a messy process that often starts on mistaken premises and takes years and even decades of testing and auditing to come up with genuine knowledge–i.e., the best science. The public communication from all parties, from Trump to the CDC to the media–oh, the media–has been abysmal, IMO.

      But it’s not the first time opinions and speculation have been treated and touted as science, and it won’t be the last. There is still actual science going on, it’s just not what gets broadly shared with the general public (and recent efforts to silence dissent on certain official takes on COVID are the exact opposite of science–not the BEST science, not even the WORST science, but actively unscientific.

      Seniors are leaving the party in droves since we’ve become the “EXPENDABLES”

      I’ve been watching the polling guy (I think McWing provided the link) and I don’t think “leaving in droves” is factually established. His shows are 90 minutes and there are a lot of them, but he really takes most popular polling out to the woodshed in one way or another in every episode, and does granular analysis of the data. I like that guy. A lot. Thanks, McWing!

      I would prefer a clear and concise definition from the Republicans about how they’re actually going to both protect the health care many Americans already have and how they plan to feed those who have been decimated by their lack of leadership on the virus.

      Have you read the Democrats Orange Man Bad Platform for the Democratic party? I haven’t actually gone through the Republicans yet (one awful piece of political posturing posing as “serious thought” per day) but might read it next week. But I don’t view the Democrats as the template for concise definitions or actual thoughtful policy, at least if their platform is anything to go by.

      in my so-called friends here who are not speaking out against the worst president in my life and probably yours too

      I was alive when Nixon was president, and I’ll easily select Nixon as worse than Trump. I’ll also say Dubya was worse than Trump. Clinton and Obama were worse than Trump in many policy ways, IMO, but better in terms of other things. I’d say Carter, as an outsider, was actually close to Trump in a lot of ways, just more from the left and far more civil in tone. But he also was not well received by the Washington establishment . . . In many ways, his first year in office was a mirror to Trump’s. But I digress.

      We followed her advice and even though I haven’t seem my grandchildren or children in almost a year, we’re still alive.

      This is true, and this is good. Although the numbers say if you have seen them multiple times you’d still be alive. Especially if you took basic and minimal precautions. I would still argue that complete lockdown and never seeing loved ones was not the only possible response to COVID, and not necessarily even the one with the best health outcomes.

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    • ScottC, on October 9, 2020 at 1:52 am said:

      lms:

      (is that gaslighting too)

      Not as I understand the term, but you apparently use it differently. What do you mean when you use the term?

      and ignore the BEST science

      How do you personally determine which science is the BEST?

      So yeah I’m deranged, angry, disgusted and disappointed in my so-called friends here who are not speaking out against the worst president in my life and probably yours too.

      Being a conservative/libertarian in an increasingly progressive culture, if I got angry and disgusted with every friend who disagreed with me politically or voted differently than I did, I’d have even fewer friends than I already have. Not being a progressive has also gotten me used to being disappointed in others.

      My scientist daughter called me in mid-March and said “Mom, we’re not going to be able to see each other for a long time and you and dad need to stay home, we’re all going to get it”.

      If your daughter was telling you this in mid-March, at the very beginning of the outbreak, perhaps blaming Trump for it doesn’t make a lot of sense. Perhaps you should consider the possibility that bad things can happen regardless of who the president is.

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    • markinaustin, on October 9, 2020 at 9:06 am said:

      Not deranged left, just older and much more wary of the disease, in my case, than all these young ‘uns here.

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      • ScottC, on October 9, 2020 at 11:26 am said:

        Mark:

        just older and much more wary of the disease, in my case, than all these young ‘uns here.

        Being wary is wise, but so is keeping the actual risks in perspective. Humans are notoriously bad at rationally assessing risk.

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  9. ScottC, on October 9, 2020 at 5:26 am said:

    I have been searching around for Covid Case and Infection Fatality Rates (CFR/IFR) and they are surprisingly difficult to find. But I did finally come across this Reason article that has some updated numbers.

    https://reason.com/2020/09/29/the-latest-cdc-estimates-of-covid-19s-infection-fatality-rate-vary-dramatically-with-age/

    I think it is worthwhile keeping these numbers in mind, to keep things in perspective, when doing a personal risk/reward assessment regarding one’s own activity and social interactions.

    The CFR for people between 65 and 74 is 8%, so 92% of those in that age range who test positive still survive. CFR, of course, is an overestimate of the actual fatality rate, as it does not include those who are infected but never get tested, who by definition survive the disease. The best estimate of the IFR for people in their 70s is 5.4%, which suggests the true survival rate is closer to 95%. In any event, it seems clear that, even for people in their 70s, death as a result of covid is pretty rare occurrence.

    The other thing I would want to know is how likely is it that any random person I come into contact with is infected, and thus puts me in danger of contracting it. I have not been able to find any stats on that, but according to Reason, the CDC’s numbers imply that roughly 10% of the US population has been infected so far. They don’t give an estimate of how many people are currently infected at any one time, but since the 10% number is a cumulative total since Feb/March, the number of currently infected must be significantly lower, lowering the chances that any random person you run into has it even further. And if the person is not a random person, but is someone you actually know whose own habits and interactions you can assess and trust, and who you know to have no symptoms, the chances that the person currently has Covid and can pass it on to you shrink even further.

    Obviously people must and should make their own judgments about the degree of risk they are willing to take for themselves. Personally, for me, the rewards of being able to spend time with my family and friends far outweighs what looks like the risks involved in doing so.

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  10. markinaustin, on October 9, 2020 at 10:21 am said:

    Meanwhile, back in the Middle East:
    https://theconversation.com/nagorno-karabakh-why-iran-is-trying-to-remain-neutral-over-the-conflict-on-its-doorstep-147402

    Also –
    @George – our ambassador to AFG denied any validity to DJT’s tweet that troops would all be home for Xmas. Go figure. Apparently our deal with AFG and Taliban requires us to stay until Taliban “proves” it has renounced Al Qaeda. Tweet was for electoral consumption only, supposedly.

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  11. jnc4p, on October 9, 2020 at 12:24 pm said:

    This will turn out well:

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