Morning Report: Retail Sales Rebound

Vital Statistics:

  Last Change
S&P futures 3489 11.6
Oil (WTI) 40.42 0.39
10 year government bond yield   0.74%
30 year fixed rate mortgage   2.91%

Stocks are higher this morning on positive economic news. Bonds and MBS are down.

Retail Sales increased 1.9% in September, which was well above what the Street was looking for. The control group, which strips out autos, gas and building products rose 1.5%.

Meanwhile, industrial production fell 0.6% last month and capacity utilization inched up to 71.5%. The numbers were below expectations, however July and August numbers were revised upward. We are still about 7% below pre-COVID numbers.

It is looking more and more like any sort of stimulus package isn’t going to happen before the election. The Republican Senate is going to put through a $500 billion package, which will go nowhere in the House because it is too small.

New home sales are outpacing housing starts, which is depressing inventory and increasing prices, according to the NAHB. Given the demand out there, housing and home construction should be a big driver of the economy for the next few years. Housing was the missing link in the post Great Recession recovery.

This image has an empty alt attribute; its file name is starts-versus-sales.jpg

About 8.5% of renters missed their September payment, according to the MBA. “Rent and mortgage payment collections improved over the summer as more people went back to work, but high unemployment continues to place hardships on millions of U.S. households,” said Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. “There is growing concern that absent a slowdown in the number of coronavirus cases and another round of much-needed federal aid, millions of renters in the coming months face the prospects of falling further behind. With the current eviction moratorium expiring in January, the situation could be even more challenging. Many renter households across the country could find themselves with no place to live and no means to repay missed payments.” Student loans are even worse; 40% of student loan borrowers did not make their payment.

56 Responses

  1. Question: Which is more believable, the idea that candidateTrump was colluding with Russia to fix the 2016 election, or the idea that VP Biden was using his position to enrich his son?

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    • Question: Which ones of Trump’s children or in-laws have the expertise or experience to serve in the White House?

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      • I’d assume none of them, though I’m not sure what credentials or professional experience actually creates positive outcomes. In many times, professional experience revolves around an ability to secure and retain a position and reproduce the appearance of frenetic work.

        I find the recent middle east east deals that have been brokered, and the Kosovo/Serbia normalization–extraordinarily positive outcomes (at least, they seem so–now). I’m not sure I’d think any of Trump’s choices, related or not, would have ultimately produced those sorts of outcomes. But there they are. Results speak louder than the appearance of expertise–or the length of a given resume.

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      • lms:

        Question: Which ones of Trump’s children or in-laws have the expertise or experience to serve in the White House?

        I am not that familiar with any of their experience, so I can’t really say, although I guess it would depend entirely on what exactly their role is. From what I understand, both Ivanka and Jared Kushner are “advisors to the president”, whatever that means, but I assume that they’d be advising the president even if they didn’t have the formal title of “advisor to the president”, so I’m not sure whether they are any good at it matters much in regards to the title. And according to a recent USA Today piece, neither of them accept pay for their roles, so if they aren’t any good, at least we aren’t paying them, and if they are any good, we’re getting a good deal. Although I suppose there probably some perks that go with being officially employed (even without pay) that they are getting that perhaps they wouldn’t be getting otherwise.

        In any event, if you are wondering whether I think Trump is above doing questionable things to help his family, the answer is definitely not. I raise the Biden corruption problem only to point out to those who have convinced themselves that presumed Trump corruption demands a vote for Biden that perhaps a Biden vote is not quite the anti-corruption stance that they think it is.

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      • At what level? At a senior level I would say none of them.

        But then I also thought Bobby Kennedy should not have been AG.

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    • The 2nd one is immediately more believable–because I suspect that sort of stuff is quasi-universal in politics. And could apply to any number of extremely wealth politicians and their offspring. Also requires far less Oceans 11 style espionage and secret meetings. While collusion broadly is certainly possible, the likelihood was low even if the “evidence” wasn’t so absurd (at least as generally presented in the press).

      Would it change my mind if I was a Biden voter? Nah. If I was on the fence between Biden and Trump (hard to imagine) it might sway me, or demotivate me. Which I guess is the goal with October-surprising it.

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  2. Thought this was interesting:

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  3. I thought this was interesting.

    https://reason.com/2020/10/16/two-important-new-books-on-knowledge-bias-and-paternalism/

    It interested me enough to go read the books.

    From HS I have been generally a proponent of what is called “libertarian paternalism” in this literature. I have seen and worked against over-regulation, where my clients were faced with conflicts of regulation or burdens a small business could not carry if it bid on a job against a big outfit. and that tended to reinforce my view that government could be more helpful and less intrusive just by spreading correct information or mandating disclosures. Even today, farmers will tell you that the info they can get from County Agents is a life saver, whether it is about the market, the imminence of disease, weather patterns in other competing areas, import-export issues, etc. I like safety notices on drugs. I like the concept of using a little seed money, to be over-matched by private investment, over massive fed programs. Much of libertarian paternalism is near the core of what I think of the role of limited domestic government.

    These books criticize the failings of too much libertarian paternalism, and I think I would like to read more.

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  4. I guess Twitter is now the authority on what constitutes the BEST science.

    https://thefederalist.com/2020/10/18/white-house-expert-scott-atlas-censored-by-twitter/

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    • Sure. Whatever. Ultimately, Twitter is a service–a product–they can do what they want (the same way LEGO can diss J.K. Rowling for saying that men are men and women are women–outrageous!). If folks don’t like (and they shouldn’t, IMO) then they can vote with their time.

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      • KW:

        If folks don’t like (and they shouldn’t, IMO) then they can vote with their time.

        I largely agree with you. Personally, I would much rather see Trump announce and lead a boycott of Twitter than to continue promoting its business with his incessant tweeting.

        My point was simply that, for people who fancy themselves as arranging their lives and priorities by “following the science”, they really should start questioning whether they have any real clue at all as to what the science actually says when there are large media organizations (social and otherwise) that are actively censoring and silencing science that those media have decided isn’t the BEST science.

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  5. Taibbi on the NY Post reporting and associated actions by Facebook & Twitter:

    https://taibbi.substack.com/p/facebook-and-twitters-intervention

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    • Free press should win out in the marketplace but it probably is winning out because different owners different slants.

      I think there is nothing to the Hunter Biden story because the intel agencies and the FBI have apparently been all over this. But YMMV. Free press.

      Liked by 1 person

      • There’s something, but probably mostly of the scandal rag variety. It’s relevance to Biden is probably not going to be significant to most voters. But it’s fodder for the political junkies!

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      • Mark:

        I think there is nothing to the Hunter Biden story because the intel agencies and the FBI have apparently been all over this.

        And after the Russian Collusion Hoax, who wouldn’t trust the intel agencies and FBI?

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        • I guess if you still believe the Russian hoax then…

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        • True enough. There is a certain consistency, I suppose.

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        • Not sure why you’re starting with the Russian Collusion Hoax. I expect many of us have read Legacy of Ashes and are familiar with Hoover’s reign over the FBI.

          Why would we ever have trusted those organizations? There is nothing in the history of the CIA or the FBI (I’m less sure about the NSA, but probably not) that suggests they aren’t large bureaucracies with their own agendas that lie to congress and the public, early and often. And have always been that, to greater or lesser degrees.

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        • Also, I think “Russian Collusion Hoax” is a misnomer. I think “Russian Collusion Delusion” or “Hysteria” is more likely. More reminiscent of the Red Scare than a concerted conspiracy where everybody involved knew it was false but were intentionally lying about it.

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        • KW:

          More reminiscent of the Red Scare than a concerted conspiracy where everybody involved knew it was false but were intentionally lying about it.

          I disagree. I think quite a large number of people within the powers that be spent a great deal of time lying about it after they knew it was false. Indeed, I think there are some people who never believed it was true, but lied about it anyway.

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        • I think many did (particularly in government, though even then I suspect it was influenced by a “well, he’s guilty of something, this will do” attitude). But in the general populace and the media? I think it was delusion. For those that were actively and intentionally lying, I think that was encouraged/exacerbated by the gullibility of the media and rank-and-file left-leaning partisans.

          There may have been a lot of intentional lying about stuff (Adam Schiff-style) but I would still think it’s the mass-hysteria response in the media and by ground-level partisans that gave it traction. And I suspect a lot of folks in government just believe the Steele Dossier was biblical truth. Of course, I’m not terribly confident in their cogitation skills or knowledge about how things work in the real world.

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        • KW:

          But in the general populace and the media?

          General populace, yes. But I wouldn’t give a blanket pass to the media. Plenty of people in the media are just as much Trump-hating liars as are partisan politicians.

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        • I still believe there are plenty of folks in the media who have the capacity to believe absurd and counterfactual things and then regurgitate them. I agree factual truth have very little value to them and so narrative shaping has replaced reportage, plain and simple. But in some ways I think assuming they have the ability to discern between fact and fiction with any reliability is giving them to much credit, regarding capacity. Although, yes, of course they lie. But I expect most of them believed and probably still believe there’s a tape somewhere of Trump paying prostitutes to pee on a bed because, sure, that makes sense, Orange Man Bad.

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        • There is no way they were just hysterical, they knew the whole time that it was bullshit.

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        • The media? Some of them, sure. All of them? I think that gives them too much credit for actual brain power. Capability to discern between fact and fiction is not a skill I assume most modern journalists have. Not that they don’t lie aplenty, but I think their ability to distinguish between truth and lies is extremely weak. I’m not sure it’s a capacity that has any importance or value to them, so I don’t–personally–believe it’s a skillset they spend any time in their lives actually developing.

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        • Yeah, Face Book won’t allow Monty Python jokes at the expense of Democrats, Twitter won’t allow links to Biden scandals written by the oldest newspaper in America, Google hides articles about abortion that it doesn’t like, Amazon won’t stream movies that don’t advance the right BLM narrative, but Trump is the real danger to American ideals, right?

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        • He’s Orange! Also, you know, he says mean stuff. He lied about how many people showed up for his inauguration. HE’S WORSE THAN HITLER!!!

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        • I forgot to also mention Merriam-Webster’s post hoc alteration of its definition of “sexual preference” in order to legitimize a Democrat’s moronic attack on ACB.

          But, again, Trump is the real problem, not the left’s capture of the culture.

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        • That was astounding to me. Not so much that they’d do it, but they’d be so obvious about it. It’s real Ministry of Truth–the idea being that everybody knows it was the other way just the other day, but everybody is supposed to be too terrified to say so.

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      • “I think there is nothing to the Hunter Biden story because the intel agencies and the FBI have apparently been all over this.”

        I think it’s all true, but mostly just reinforces what was already known about him from other sources.

        Unsurprisingly, I agree with Glenn Greenwald’s take:

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        • I think this was true of the Hillary and Podesta emails, too. They were also a great window in the mundanity of political corruption (which is universal, you’d probably see a lot of that on any politicos laptop from any side–not necessarily crack use and hookers, but defintely a lot of “I got this sweet deal and we’re kicking back 10% to dad” type of stuff).

          Human beings are going to human. I agree the scandal is the utter transparency of the bias and partisanship of pretty much the entirety of the mainstream media–and also the fact they no longer seem to understand that being so profoundly open about their disregard for the original definitions of journalism just serve to marginalize them even further.

          It gets to the point where you really can’t trust them about anything, and that begins to become obvious to even many casual consumers of mainstream news.

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  6. Scott

    My point was simply that, for people who fancy themselves as arranging their lives and priorities by “following the science”, they really should start questioning whether they have any real clue at all as to what the science actually says when there are large media organizations (social and otherwise) that are actively censoring and silencing science that those media have decided isn’t the BEST science.

    I get your point (I think) but I think after being here at ATiM off and on for the last few months (because it’s both an election year and a once in a hundred year health crisis), is there a reason to not respect the science from the public health experts?

    When a doctor advising the WH on corona virus response says “masks work? No” is there a reason that should be part of the discussion when most public health experts are begging for people to wear masks? I don’t necessarily approve of censorship but when it’s blatantly (IMO) a false statement, maybe we do need that kind of censorship.

    I don’t know really, I’m just asking. In some ways the more Trump and his “new expert” tout unpopular opinions and solutions to the virus I think it just hurts Trump so let him have at it.

    Today’s comments from Trump regarding Fauci were another example of just letting Trump dig his own grave………………

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    • You do remember that it was Fauci who originally said that masks don’t work, right? That’s the problem with following the so-called experts, was he lying then or lying now?

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      • I do remember that, but he’s also explained the evolving science on that. I think it’s much more helpful to trust the public health officials than a president running for re-election attempting to put the Corona Virus behind him when it’s getting worse.

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        • It’s not evolving science though, it’s evolving opinions (at best). Or more accurately referred to: guesswork. Or more charitably referred to: hypothesizing.

          Which is not to say anything Trump is saying is scientific, as it’s not. If anything, Trump just muddies the water further and makes people who really don’t like him entirely too credulous in regards to considering guesses and inaccurate or incomplete data as being somehow definitiviely “scientific”.

          Most of the presentation of “the science” in regards to COVID has been entirely too cagey about discussing how much we don’t know (we don’t want people to panic by admitting we know very little, and not nearly enough to be recommending these mitigation measures!) … I LOVE actual science. But part of science is being honest about what you don’t know, and being clear–super clear–when you start describing postivie tests as “cases” when before you describe definitively symptomatic people as “cases” and positive tests as “positive tests”.

          When discussing COVID-related deaths, being clear about secondary causes–Herman Cain had stage 4 cancer, so it’s unlikely COVID alone was the cause of his death. Repeat this 100k times.

          The best way to honestly assess the death toll is to determine how much the overall deathrate is up in 2020 over an average of 2017/2018/2019.

          At present, death tolls as presented are decidedly unscientific. Cases are not particularly scientific (false positives, false negatives, little distinction between symptomatic and asymptomatic, no discussions any more of hospitalizations, etc., etc.) so . . . IMO, not terribly scientific. Ergo, decisions based on these datasets–also not scientific, irrespective of the effectiveness of the strategies (and there are some real questions about the benefit to aggregate health outcomes of lockdowns, social distancing, discouraging hospital visits, social isolation of infected people, etc).

          While little Trump says is scientific or has any hard scientific foundation, that should be irrelevant to the decidedly unscientific “science” being provided to us by our public health experts, social media gurus, and the mainstream (or alternative) media.

          There is far more social engineering (entirely visible on the surface) to most of the public health expert communication, recommendations, and mandates than health science. In my opinion. Could be wrong. Just saying what it looks like to me!

          🙂

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        • KW:

          The best way to honestly assess the death toll is to determine how much the overall deathrate is up in 2020 over an average of 2017/2018/2019.

          Yes!!! Or better yet, look at the number of weekly/monthly deaths each week/month relative to “expected” deaths. The number of weekly/monthly deaths over time is remarkably consistent and predictable within a reasonable range, and so new, big causes of death are very obvious when they appear. Back in March and April, Covid was obviously causing a huge number of excess deaths, relative to historic averages. Since August we have been returning to the expected curve. In fact, below it for the lasts week recorded.

          https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

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        • I do the year average comparison because something like COVID may concentrate a lot of deaths that might have happened anyway by October in May and June–meaning that it was mainly fatal to those who would be dying in short order anyway. From an objectivist standpoint, it may have deprived a lot of people of several months of very low quality life far, far past their productive years. Which is bad but not as bad as killing off a bunch of otherwise healthy 30 year olds, which is basically how it has been portrayed in the media.

          But that’s just me. I’m not an expert in statistics or anything and have large gaps in knowledge (and that’s how we admit we don’t know something, Public Health Experts).

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        • Agreed.

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        • You agree that the changing guidance on masks was the result of evolving science, or that the Corona Virus is getting worse?

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      • According to Anthony Fauci, the nation’s leading infectious disease expert and a key member of the White House coronavirus task force, masks weren’t advised to the public from the start because of the anticipated PPE shortages.

        https://www.google.com/amp/s/thehill.com/changing-america/well-being/prevention-cures/502890-fauci-why-the-public-wasnt-told-to-wear-masks%3famp

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    • lms:

      …is there a reason to not respect the science from the public health experts?

      I think there is reason not to accept every utterance from media-favored public health experts as being “the” science. Especially when we know there are concerted efforts being made to prevent other public health experts from putting forward contrary scientific views. Silencing contrary views is not how science is done, nor does it advance scientific understanding.

      When a doctor advising the WH on corona virus response says “masks work? No” is there a reason that should be part of the discussion when most public health experts are begging for people to wear masks?

      When Copernicus put forward the heliocentric model of the solar system, was there a reason that should have been a part of the discussion when most astronomers were insisting that the solar system was geocentric?

      I don’t necessarily approve of censorship but when it’s blatantly (IMO) a false statement, maybe we do need that kind of censorship.

      If two scientists make contrary or differing scientific claims, how do you determine for yourself which one is “blatantly false”, and which one is not? Especially if the places you look at to inform yourself are actively censoring attempts to substantiate one of those claims?

      BTW…I think lots of people, including high profile politicians, routinely make what are “blatantly (IMO) false statements” about all kinds of things. Should they be censored as well?

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      • BTW…I think lots of people, including high profile politicians, routinely make what are “blatantly (IMO) false statements” about all kinds of things. Should they be censored as well?

        I don’t (obviously) but let’s say they should. Blatantly false statements should be censored. Great.

        So who decides? Who filters all our information for us? What if a bad actor or many bad actors end up with that responsibility? What if at the end of it, it’s Donald Trump, Jr. making the censorship decisions? Amy Coney Barrett? How would one feel about the decision making regarding censorship then?

        These are human beings, not AI. Why should I trust these folks with their biases (and inability to tell the difference between expertise and arrogance) to censor data for me? What have any of our currently self-appointed censors done to earn my trust? To earn any of our trust? All such censorships does is reduce to informational value of the information they provide down to zero.

        All you do with censorship is fertilize conspiracy theories and alternative media. You give power to talk radio and Alex Jones and so on and so forth. You create Birthers and Truthers and worse.

        It’s a VERY bad idea. IMO. Both generally but also specifically for the people practicing the censorship, in regards to their intentions. Unintended consequences and all that.

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        • KW:

          All such censorships does is reduce to informational value of the information they provide down to zero.

          Exactly.

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  7. I was not expecting this. I really wasn’t going to watch the debate Thursday. I’ve already voted and my absentee ballot has been accepted so no real reason to see another spectacle. Until now….Lol. I’ll have to watch just for the comedic value now!

    President Donald Trump and Joe Biden will have their microphones cut off during Thursday’s final presidential debate while their opponent delivers initial two-minute answers to each debate topic, the Commission on Presidential Debates announced Monday.

    Both microphones will be on during open-discussion segments of the debate.

    https://www.nbcnews.com/politics/politics-news/trump-biden-will-have-mics-cut-during-opponent-s-answers-n1243954

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    • I don’t think this is a bad idea, myself. As long as equitably applied, I think it should always be like this.

      Folks on Trump team should be jumping up and down. There were plenty of times during the first debate where Biden was mangling his answer and Trump stepped in and saved him, because he couldn’t stand not being the center of attention for even a moment.

      I’m guessing the Biden team are not as happy about that. In the first debate, it was almost like Trump was actively trying to lose it. This is most likely, IMO, to save Trump from himself.

      He may still find a way to shoot himself in the foot. He really should just get out of the way and let Biden be his own worst advertisement for himself.

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      • KW:

        I don’t think this is a bad idea, myself.

        As long as the mic of the moderator/panelists is also cut off. They shouldn’t be allowed to speak outside of posing the question. Once that is done, their job is to shut up. If one of the debaters says something that should be challenged, then it is up to the other debater to do so.

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        • As long as the mic of the moderator/panelists is also cut off. They shouldn’t be allowed to speak outside of posing the question. Once that is done, their job is to shut up.

          This is an excellent point. For *this* set of debates, it probably doesn’t hurt Trump if the moderator interrupts -him- and debates him while smiling and nodding while Biden responds (or, better yet, actively helps him). But as a general principal, obviously the moderator should be required to let the candidates complete their responses–especially given how prone contemporary moderators are to debate the Republican and help the Democrat. For reasons.

          Like

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