Morning Report: The economy added jobs in January

Vital Statistics:


  Last Change
S&P futures 3885 20.3
Oil (WTI) 57.23 1.04
10 year government bond yield   1.15%
30 year fixed rate mortgage   2.84%

Stocks are higher this morning on no real news. Bonds and MBS are down.


The January jobs report showed that the economy added 49,000 jobs. The unemployment rate came in at 6.3%, while average hourly earnings increased 5.4% YOY. The increase in wages is certainly good news, however there still might be COVID noise in those numbers. The labor force participation rate slipped 0.1% to 61.4%.


Corelogic agreed to a buyout deal after a long sales process. The company is being bough by Stone Point Capital. Stone Point also owns Home Point.


United Wholesale reported origination of $54.7 billion in the fourth quarter, which was an increase of 71% compared to the fourth quarter of 2019. Gain on sale margin increased to 305 basis points.



57 Responses

    • That is one depressing article.


      • I am genuinely curious what about it you found depressing.


        • Ds being pulled over a legislative cliff.

          And when I hear that Schumer is backing shotgun $50K forgiveness of student loans I see real evidence of it. Biden has opposed that but “his” party may well be running away.

          And yes, I always feared the left wing but I saw evidence in the 2018 elections that it had lost purchase.

          I am now prepared to be very critical of the Ds, especially in Congress, as they are in power. I think I saw one hopeful sign – despite the BR passing on a 51-50 vote it got cut down because the leadership allowed for the amendment process to flow, in a way Reed and McConnell did not.

          NoVa, am I reading that correctly?

          For me, the best hope is for the new centrist working groups of Rs and Ds to gradually gain more influence. Time will tell.

          The Ds will need someone analogous to Sasse to call out cults of personality on the left. That notion that these fledgling Congresswomen with no legislative accomplishments are playing to the audience for personal notoriety is a grim reminder of what we have just been through on the right.

          And there was more. For example, lame excuses for violence are being winked at by some in the mainstream left as well as some in the mainstream right. I have seen stuff like this before in my lifetime but it is just as frightening to law abiding normal people whenever and wherever it occurs.


        • Mark:

          Ds being pulled over a legislative cliff.

          Pulled by what? The forces you presumably object to are the D party.

          And yes, I always feared the left wing but I saw evidence in the 2018 elections that it had lost purchase.

          What evidence was that?

          I am now prepared to be very critical of the Ds, especially in Congress, as they are in power.

          I think it is a better idea to criticize bad ideas before those who forward them have the power to implement them. Better to keep people with bad policy ideas out of office than to vote them in and then criticize them. BTW, it is the D in the White House that has the real power, in this era of rule by executive order and administrative bureaucracy.

          For me, the best hope is for the new centrist working groups of Rs and Ds to gradually gain more influence.

          Who are these “centrist” D’s? Is Biden one?

          The Ds will need someone analogous to Sasse to call out cults of personality on the left.

          The problem with the left is its policies and ideas, not the personalities that espouse them. For example, it isn’t a cult of personality that is the problem with Biden’s re-interpretation of Title IX. It is the re-interpretation itself.


        • The cult of personality is interesting. Not sure that’s the problem on the left or the right—it’s just a shibboleth. Trump’s problems were either his politics or his approach or his breaking of norms or whatever—not that a cult of personality developed around him.

          Similarly, while cults of personality develop around AOC or Omar or Bill Clinton, that’s not the problem—it’s just the source of or a part of those people’s popular appeal.

          The problem is policies (if one disagrees with them) norm-breaking, double-dealing and tribalism.

          If a cult is a problem it’s the cult of the tribe. And that doesn’t get called out much by your own side—and when it does it means the tribes are fracturing. Especially with weak parties and the parties are weak, for good or for ill.

          There are a handful of centrist Ds. They are in swing districts typically and are in the position of having to say they fight the good fight against both sides. They don’t get feted by the media like John McCain and won’t, but they exist.

          I don’t think they have power among the Democrats.

          I don’t feel the Republicans have many centrists at all—-just straddlers. I have a hard time seeing the NeverTrumpers as acting in good faith. Centrists amongst the Democrats don’t define themselves as being against AOC or Biden. They can just compromise on some votes.


        • There’s a good chance that Scott may end up being right on the relative risks of electing Trump vs Biden, especially since the Democrats ended up with control of the House & Senate too.

          I had hoped that Republicans would have kept one branch and it would have been a replay of Obama’s second term, but everyone seems radicalized now.


        • Trump wins and we have the inverse problem. A media 100% in on how the election was stolen from Biden and riots everywhere, not just the Capitol, where the Democrats and the NeverTrumpers and the media are all supporting the rioters … I don’t see and outcome of the 2020 election that could be positive. Even if you had a house-divided scenario too much other shit would still be catching on fire.


      • Disregarding the NYT slant about everything being the Republicans fault, you’ll probably find this more depressing.

        I don’t think the overall premise is wrong though. Politics is becoming more about who rules instead of policy debates.

        The amusing thing is progressives being shocked at that, especially in an age of identity politics.


        • every time the left wins an election, there becomes a bull market in pieces about why Republicans will never wield power again.


        • I think this must be the most bullish market ever. Other than some Whitehouse press corps folks asking actual questions, the media is as overtly a Democratic mouthpiece as it has ever been. More so.


  1. That jobs report is awful.

    Rosanne and I had our first Moderna shots during the week.

    Real recovery depends on ramping up the vaccinations. And then on SBA type lending to get small service and hospitality businesses up and running again. In fact, that could lead to a boomlet. Pent up demand creates the situation where supply side macroeconomics works best.

    The worldwide shortage of microchips might be a target for governmental supply side policy as well. Might get worse if China and Taiwan have open hostilities. Nation may need to “onshore” FABs. Samsung wants to expand it Austin FAB because it is unsure of its Taiwan pipeline.


    • Mark:

      Real recovery depends on ramping up the vaccinations.

      I think it depends on ending lockdowns.


      • This is hilarious for it’s earnestness.

        You’d be forgiven for thinking it’s from the Babylon Bee.


        • Hate addiction is a real thing.


        • No going back from the authors “other using” of Trump voters. There is no good ending other than some sort of separation. Best case scenario would be an extreme federalist system as was pre civil war. May happen when multiple states attempt nullification of some
          federal statutes or regulations. Worst case scenario is IndoPak partition.


        • Glad I scrolled down before I posted this same story.

          She’s making the case why disagreeing with her about politics is the only thing that matters and being kind in good and other areas in fact is just like terrorists. Because they’ve lost the fucking thread.


        • This could have been written by a Christian woman about the nice gay man who runs the health food store in 1985. Just substitute “Trump Voter” with “homosexual”


      • Which we may or may not do with universal vaccination. There’s clearly a split now amongst the establishment—-some want to say you have to mask up and be locked down no matter how many vaccines are distributed. Others want to assert that Trump leaving office cured COVID.

        That being said, lockdowns were always an awful non-solution in my opinion. Whatever it takes to put an end to them, I’m all for.


        • KW:

          That being said, lockdowns were always an awful non-solution in my opinion.

          I agree. That is why I always object to the implication that the pandemic has had such a disastrous economic toll. It wasn’t the pandemic, but rather the political reaction to the pandemic, that has had such a horrible economic impact.

          Undoubtedly fear of the disease would have had some negative impact on the economy, but not nearly to the extent that government imposed lockdowns did. Indeed, the very assumption behind imposing mandated lockdowns was that, without being forced to by government, most people would not lockdown and would instead carry on with their normal economic activity. I have a friend who runs a real estate investment company, and one of their funds is invested heavily in pubs in the UK. He was telling me that, in July-Oct, when the UK was partially opened up, his pubs were running at roughly 95% of normal seasonal revenue. Of course since November when lockdowns resumed, they are running at 0% of normal seasonal revenue. So 5% of his decline might be blamed on Covid. The other 95% is due entirely to government policy.

          I think people, and especially politicians, who favoured lockdowns tend to blame economic decline on the pandemic in order to avoid being accountable for their own policy choices. If they truly believe that shutting down the economy was necessary in order to avoid a more calamitous result in some other respect, then they should embrace the “credit” for having traded the economy for those other values, not portray the economic effects as some unfortunate but natural effect of Covid.


        • “I agree. That is why I always object to the implication that the pandemic has had such a disastrous economic toll. It wasn’t the pandemic, but rather the political reaction to the pandemic, that has had such a horrible economic impact.”

          Scott, you may find the interview of the Reddit people involved in Gamestop interesting:

          “I remember last March, just as the pandemic was taking hold, I was watching CNBC, and Bill Ackman, the big hedge fund guy, basically saying it’s the end of the American economy. He’s saying, “Shutdown is inevitable,” and calling for everything to be closed except essential services:

          At the time, I was wrapped up in the doom, on the side of, “I don’t think we’re prepared for what’s coming.” Because I was watching the videos coming out of China and thinking, “There are people just passing out. That’s not normal. I think that’s bad.” I saw a video of somebody being welded into his apartment, and I again, I thought, that seems bad. Seeing Ackman on TV, I was like, “I think he’s right.”

          As time went on, though, that moment bothered me. I thought, “That fuck, he’s causing the panic.”

          I guarantee a lot of people were like, “Bill Ackman’s a smart dude. He’s a lot more successful investor than I am, and he says shit’s about to hit the fan. I better start buying some protection. I don’t know, short really volatile, high flying stocks, and maybe buy a lot of put spreads.” But then we all know what happened after that.”

          I personally think a two week full lock down that was announced ahead of time nation wide and really was a full stay at home enforced one would have been preferable to the half-assed rolling restrictions we’ve seen.

          The current version is the worst of both worlds – killing the economy and failing to control the virus spread. Are you back in the UK? Is it worse there & in Europe?


        • jnc:

          Are you back in the UK? Is it worse there & in Europe?

          I am in the UK. I haven’t been in the US since Thanksgiving, but if you are referring to lockdowns, I think it is definitely worse here than the US, or at least where I was in the US (North Carolina). With the exception of a two week period in early December, we have been in full lockdown since the beginning of November. I go to my office almost every day, but I am only one of a few, and apart from that, we have been essentially housebound for over two months now. And given the lack of daylight hours at this time of year, and the horrible weather, it is getting very, very depressing.

          The atmosphere is pretty dire.


        • Bitch can’t admit the truth…

          Men make better women.


        • I think we were always going to fail the control the virus spread. The only difference we could hope to make is the one we started with—slow the spread to prevent overwhelming hospital, which for 99% of hospitals we apparently did (the reportage of overflowing ICUs not withstanding).

          But most of the approach was taken on presumption rather than any kind of science and often modern concepts of equity substituting for logic. Why are we going to lock down everybody rather start with those most at risk?

          There’s no evidence we can control a contagion with flu-like spread by locking down. Obviously at some level you could but then you have to question the costs versus the benefits.

          And now the whole move to stay masked and social distanced indefinitely, even after everybody is vaccinated. I don’t see how you enforce that in a remotely functional society.

          Also the whole changing the definitions of things and then the media going “changing definitions of critical terms is totally normal during a pandemic as is super-transparent so it’s okay”.


        • KW:

          There’s no evidence we can control a contagion with flu-like spread by locking down.

          Well, I think that you can obviously prevent spread by prohibiting personal interactions, which is what lockdowns are meant to do. I think the real problem is that lockdowns can’t accomplish the complete elimination of the virus. So inevitably what happens is that as soon as you ease the prohibitions, the spread begins again. Lockdowns ultimately only provide temporary relief, and as such are not a viable long term strategy. And, of course, as you mention, there are other costs to weigh even as a short term strategy.

          But perhaps worst of all is the propaganda that is inevitably used to promote and enforce the lockdowns (along with other policies like masks). The relentless push to present these policies as being all about protecting other people, and pushing the notion that it is your moral responsibility to act to reduce the risk to everyone and anyone else, makes it increasingly likely that they will be with us literally forever. This virus is not going away, and so even if the vaccine proves to be effective, some people are always going to be at risk. Therefore you will always have an obligation to behave in ways to reduce the risk to those other people.

          And of course there is no reason to think that this new moral framework will or should be limited to just the risks of Covid. If I have a moral responsibility to reduce all possible (however remote) butterfly effects of my behavior with regard to Covid, why not also with regard to anything and everything else? Anyone who thinks that the authoritarian forces within government and the culture aren’t going to use this new moral framework in order to expand their ability to control people’s behavior outside of the context of covid are, I think, being very naive.


        • To my point:

          Vaccination drives hold out the promise of curbing Covid-19, but governments and businesses are increasingly accepting what epidemiologists have long warned: The pathogen will circulate for years, or even decades, leaving society to coexist with Covid-19 much as it does with other endemic diseases like flu, measles, and HIV.


        • Agree. And my point about lockdowns not having data to support them remains: it is not “following the science” no matter how much sense something makes intuitively.

          And no matter what sense it makes intuitively, it stops even making intuitive sense when you have carveouts for big box stores and grocery stores and essential workers. Especially when you start out having no idea about spread and asymptomatic transmission and so forth. Studies have indicated that planes and restaurants and schools are all very tiny vectors for transmission and likely didn’t need to be closed at all. More people have contracted it in their own houses—probably from someone who got it being an essential worker or from going to a big box store.

          Cuomo celebrating New York’s victory over COVID while being the worst state in the country for COVID suggests how performative its all Ben and what it was about—-not results but performative lockdown theater. And centralized government control. The Florida model was clearly superior.

          It always should have been guidance and telling individuals what we know and allowing them to make their own safety decisions and respecting those.


        • KW:

          You are preaching to the choir, man. Happily we aren’t in California and you can still do that!


        • I know. but I talk about this stuff with my mom (did just recently) and it makes no difference. She was an ecclesiastical trust of Fauci and Democratic politicians and CNN and the big three news networks. She did allow that Newsome and Cuomo did a poor job in handling COVID, however.

          That being said: “you can still do that” is true in a lot of states. But the emphasis on removing responsibility from the individual and instead giving it to the government I expect still has a real if not-measurable impact in terms of preventing people from taking responsibility in a way that leads to highly superior outcomes. When you remove agency or seem to, at the state or federal level, you’ll get people feeling less responsible and thus less likely to take reasoned and rational actions based on a sense of individual responsibility for outcomes. Not universally, certainly, and it’s much worse to actually take responsibility away (like the state requiring nursing homes to receive infected patients, despite the nursing homes objecting to this approach). Still, a cultural orientation around individual responsibility would, I think, lead to better outcomes generally–in pandemics and many other situations.

          Unfortunately, pandemics “effect everybody” so it feels like the perfect situation for Big Government to solve the problem for everybody–i.e., a situation perfectly tailored for big government solutions. So of course the global response was centralized micromanagement of everything, irrespective of facts on the ground or any understanding of epidemiology.

          But that comes back to dominant view of the role of government as being one of “telling the peasants (I mean, citizens) what to do”. Which is unavoidable albatross around the neck of humanity, IMO, but one for which there is little relief, and even then only rarely. Although clearly the government is in a good position to handle communications and provide guidance and remove regulatory hurdles (or insert them, where safety my suggest further delay for review would be wise). Micromanagement is bad management, IMO. But it is where we are, and what folks voted for so . . . I guess I should just shut up! 😉


        • Lol!

          It always should have been guidance and telling individuals what we know and allowing them to make their own safety decisions and respecting those.


        • It is funny. At the same time the outcomes tend to be better pretty no matter the quality of or ideology of the individuals involved. Incentives! The things all economists no about, but forget if every the wisdom of incentives conflicts when the wisdom of leftist centralized control.


    • Glad to hear you guys got the vaccine.


    • We’ve need more on shore chip production capacity forever. From a strictly rational point of view it would make sense for Apple to be building fans in California, Microsoft to be building them in Washington or Dell or HP or somebody. And of course Intel.

      I’m still going to wait for the J&J vaccine. I’m glad we’re finally deploying what are basically gene therapies and no doubt more and better will be done with them in the future. But I’m not one for being on the bleeding edge myself and will wait for an old school vaccine.


  2. New Taibbi pieces:

    Odd that the media people I identify closest with now are disaffected liberals/leftists like Taibbi, Greenwald & Shant Mesrobian, an ex-Obama staffer.


  3. Good basic primer on GameStop for anyone who needs to share with a relative:


  4. Some good Greenwald invective:

    “But this is now the prevailing ethos in corporate journalism. They have insufficient talent or skill, and even less desire, to take on real power centers: the military-industrial complex, the CIA and FBI, the clandestine security state, Wall Street, Silicon Valley monopolies, the corrupted and lying corporate media outlets they serve. So settling on this penny-ante, trivial bullshit — tattling, hall monitoring, speech policing: all in the most anti-intellectual, adolescent and primitive ways — is all they have. It’s all they are. It’s why they have fully earned the contempt and distrust in which the public holds them.”


  5. SCOTUS’s ruling in South Bay United Pentacostal Church v Gavin Newsom:

    Click to access 20a136_bq7c.pdf

    Interestingly the Court’s 6 nominal conservatives staked out 4 different positions and 2 separate concurring opinions, while the now-only-3 liberals each did what they do, and all voted in lockstep to uphold the preferred progressive political policy.


  6. Question…

    Article I Section 3 of the Constitution says explicitly that:

    The Senate shall have the sole Power to try all Impeachments. When sitting for that Purpose, they shall be on Oath or Affirmation. When the President of the United States is tried, the Chief Justice shall preside

    How can what is going on now be considered a legitimate process if it is being presided over by someone other than the Chief Justice?


    • They aren’t impeaching the president, though.They are impeaching a former president (i.e., innovating with a new “Citizen Impeachment”). So they should of course be calling it something different (that arguably they are not constrained from doing), such as “Post Facto Impeachment” or something. And they could argue that an impeachment of a former rather than current office holder does not have to be presided over by the chief justice. But is otherwise similar in import to using presidential impeachment as originally intended.

      Seems a lot more linear in its evolution and a lot more modest than a number of other things our government has done that are extraconstitutional (in my opinion, of course).

      That being said their grounds for impeachment seem transparently absurd and that anyone is going along with it is disappointing. The “conservative” pundits who concur with this as a reasonable idea mystify me (not so much in the do-ability of a new form of post facto impeachment, but in that impeaching a president because he said ill-considered words that appeared to coincide in some vague way with what certain people were planning on doing, anyway).

      But politics is often not about constitutionality or governance or the responsibilities of the representatives, but cliquish battles between aged narcissists. So I guess that explains it.


      • “They aren’t impeaching the president, though.”



        • jnc/KW:

          They aren’t impeaching the president, though.

          They only have the power of impeachment over office holders. If they are not impeaching him as President, on what authority are they acting?



          The New York Times will shortly write a stinging editorial demanding you be de-platformed.

          Honestly, I don’t know. Feels like they are calling a thing impeachment that’s not really impeachment but has some impeachment-y aspects. Sort of like senate investigations–it’s an opportunity to showboat. I guess. How it can be an impeachment of any kind without following the Chief Justice prescription I don’t know. Arguably the impeachment thing has precedent (the dude impeached after resigning, although he resigned to avoid getting impeached) and there’s “arguments” that he’s being impeached in regards to his role as president, even though he’s not presently president, he was when his impeachable offenses occur. I don’t think the constitution is vague here but clearly some people do, and so it would be up to SCOTUS to decide should it be brought before them.

          However, I would think the lack of the presiding of the CJ means it can’t be a valid impeachment in any circumstance. That bit seems crystal clear, to me. But again–some folks just push the definitions to mean anything they want them to, and if they are allowed to do it . . . well, there you go. We’re impeaching citizens for things they implied or we think they implied but didn’t actually say when an office holder, for the purposes of getting on to the next bit where we forbid them from running for office ever again or something.


        • The House voted the Articles on January 13th but never sent them to the Senate until after Trump left office. If you ask me, their refusal to even send the Articles over when prior to Trump’s term expiring means they’ve forfeited their chance at a trial.

          Will SCOTUS rule that way? Who knows. How many OMB justices are there? We know there are at least 4. Who’s the 5th?


        • I don’t know. And I don’t disagree. I’m mostly just speculating on what the thinking might be, how it will all be treated by the public (most of whom have little knowledge and less interest in regards to the constitution in actuality). I think it will amount to nothing, at least in this case, because there won’t be enough votes to convict. However I’m assuming once used, it will likely be used again. Unless things change. And I don’t know that will happen.


        • JFC

          The order also set a definition for hazing: a “form of harassment that … physically or psychologically injures, or creates a risk of physical or psychological injury … for the purpose of: initiation into, admission into, affiliation with, change in status or position within, or a condition for continued membership in any military or DoD civilian organization.”


        • They new recruits aren’t going to come out hard as nails like you did, McWing.


        • What do they think basic training is?


        • Being cosseted until shipped to a foreign country to be shot?


        • In the Marine Corps, 60% of hazing incidents were physical and 32% verbal, with the remainder nonverbal.

          What the fuck is non-physical non-verbal abuse?


        • Brent:

          What the fuck is non-physical non-verbal abuse?

          I had the same reaction. Maybe property abuse?


      • Seems to me that the House had the opportunity to send the Articles of Impeachment to the Senate for adjudication while Trump was in office but chose not too. Since he’s no longer in office how can he still be tried? If the Constitutional remedy for malfeasance for a POTUS is Impeachment then trial, they had every opportunity to do so prior to 1/20 and did not do it. If one impeaches the President, the Constitution requires the CJ to preside and he has declined to do so (I’m not sure a CJ can decline to hear a POTUS impeachment trial), so if he is declining to preside and the CJ cannot refuse to preside over a POTUS impeachment trial doesn’t it mean that one cannot take place? If not, why not?


        • This is another kind of senate trial that they are calling impeachment but isn’t? Most of the open questions seem to be about “norms”. Constitution doesn’t say: “What happens if Chief Justice doesn’t preside over the trial because the president is out of office”.


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