Morning Report: Home Prices continue to rise

Vital Statistics:


  Last Change
S&P futures 3847 -25.3
Oil (WTI) 61.52 -0.24
10 year government bond yield   1.38%
30 year fixed rate mortgage   3.05%

Stocks are lower this morning as bonds continue to sell off.


The global reflation trade seems to be the story these days, with bonds selling off and commodities rising. The important thing to stress is that it isn’t just a US phenomenon: rates are rising overseas as well. The German Bund is now trading at -29 basis points. This is the highest yield since June of 2020, and is really pushing towards pre-COVID levels.

Is the global economy really back to pre-COVID levels? Emphatically not. While the worst is probably over, there has been a lot of economic damage done. Commodity price driven inflation generally isn’t lasting, and IMO you don’t get inflation without wage hikes. Wages have been rising in the US, however that is a function of lower-compensated workers losing their jobs, which pushes up the average hourly wage. It is a technical increase due to unusual economic circumstances and not a signal that we are on the brink of an overall increase in worker compensation.


Jerome Powell heads to the Hill today for his semiannual Humphrey-Hawkins testimony. I suspect he will stress how fragile the economic recovery is and press Congress for more fiscal stimulus.


Tight inventory is pushing up housing prices. The Case-Shiller Home Price Index rose 1.3% MOM and is up over 10% YOY. The FHFA House Price Index rose 1.1% MOM and is up 11.4% YOY.


Loans in forbearance fell to 5.27% last week, according to the MBA. “The share of loans in forbearance has declined for three weeks in a row, with portfolio and PLS loans decreasing the most this week,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “This decline was due to a sharp increase in borrower exits, particularly for IMB servicers. Requests for new forbearances dropped to 6 basis points, matching a survey low.”


The Street is skeptical of the current refi boom’s durability, as seen by lackluster IPO activity. Five mortgage vendors have postponed or canceled plans to go public as investors are reluctant to award anything higher than a mid single-digit P/E ratio. Amerihome was slated to go public for $1.3 billion, and ended up selling to Western Alliance for a number well south of that. The MBA is forecasting that refinances fall 50% in 2021 compared to 2020.


Janet Yellen said that Biden wants to raise corporate taxes and increase the taxes on capital gains. That said, it sounds like a wealth tax might be a bridge too far.

23 Responses

  1. Is Greenwald wrong about anything here? I don’t think he is.

    But what House Democrats are doing here is far more insidious than what is revealed by that creepy official announcement. Two senior members of that Committee, Rep. Anna Eshoo (D-Silicon-Valley) and Rep. Jerry McNerney (D-CA) also sent their own letters to seven of the nation’s largest cable providers — Comcast, AT&T, Spectrum, Dish, Verizon, Cox and Altice — as well as to digital distributors of cable news (Roku, Amazon, Apple, Google and Hulu) demanding to know, among other things, what those cable distributors did to prevent conservative “disinformation” prior to the election and after — disinformation, they said, that just so happened to be spread by the only conservative cable outlets: Fox, Newsmax and OANN.

    In case there was any doubt about their true goal — coercing these cable providers to remove all cable networks that feature conservative voices, including Fox (just as their counterparts on that Committee want to ban right-wing voices from social media) — the House Democrats in their letter said explicitly what they are after: namely, removal of those conservative outlets by these cable providers

    Suggest reading the whole thing.


  2. God help anyone who owns NYC real estate. I know people who have lived in NYC for decades and they say we are back to the 1970s / 1980s.


  3. Lochner.


    • Strange tutorial. It doesn’t even tell us what law Lochner was challenging.


      • That was the preview. You are supposed to follow up on your own.


        • Mark:

          That was the preview. You are supposed to follow up on your own.

          Ah…was watching on my phone on the train this morning, so wasn’t fully engaged. Must have missed the wider series indication. Will check it out….it sounds interesting.


  4. Strange bedfellows?

    Sens. Bernie Sanders, I-Vt., Rick Scott, R-Fla., Rand Paul, R-Ky., Josh Hawley, R-Mo., Ted Cruz, R-Texas, Marco Rubio, R-Fla., and Dan Sullivan, R-Alaska, voted against confirmation of Vilsack.


  5. Nice cable TV platform you have there…would be a shame if something happened to it.

    Click to access Eshoo-McNerney-TV-Misinfo%20Letters-2.22.21.pdf

    It is for these reasons we ask that you provide us with responses to the following questions about AT&T’s policies toward content carried on U-verse, DirecTV, and AT&T TV by March 8, 2021:

    1. What moral or ethical principles (including those related to journalistic integrity, violence, medical information, and public health) do you apply in deciding which channels to carry or when to take adverse actions against a channel?

    2. Do you require, through contracts or otherwise, that the channels you carry abide by any content guidelines? If so, please provide a copy of the guidelines.

    3. How many of your subscribers tuned in to Fox News, Newsmax, and OANN on U-verse, DirecTV, and AT&T TV for each of the four weeks preceding the November 3, 2020 elections and the January 6, 2021 attacks on the Capitol? Please specify the number of subscribers that tuned in to each channel.

    4. What steps did you take prior to, on, and following the November 3, 2020 elections and the January 6, 2021 attacks to monitor, respond to, and reduce the spread of disinformation, including encouragement or incitement of violence by channels your company disseminates to millions of Americans? Please describe each step that you took and when it was taken.

    5. Have you taken any adverse actions against a channel, including Fox News, Newsmax, and OANN, for using your platform to disseminate disinformation related directly or indirectly to the November 3, 2020 elections, the January 6, 2021 Capitol insurrection, or COVID-19 misinformation? If yes, please describe each action, when it was taken, and the parties involved.

    6. Have you ever taken any actions against a channel for using your platform to disseminate any disinformation? If yes, please describe each action and when it was taken.

    7. Are you planning to continue carrying Fox News, Newsmax, and OANN on U-verse, DirecTV, and AT&T TV both now and beyond any contract renewal date? If so, why?

    Can anyone identify anything that Trump did that represents this degree of a threat to a core US principle? The idea that anyone who is not of the left themselves can think that the left as represented by the modern Democratic party is not the preeminent threat to basic American ideals/principles/freedoms absolutely boggles my mind.


    • Trump admin did nothing even approaching this though he was accused of it all the time. This is very bad news and I’m hoping the electorate catches on for 2022 but not holding my breath.


      • This thread makes my dick hard!


        • Da Comrade. Should we send them to gulag or just have them shot?


        • You have some weird fetishes, dude. Makes me nauseous. Ugh. I’ve got to imagine that at least half the country, optimism for the future is dropping like a fucking rock. Not that we will ever know, as polling designed to combat misinformation and wrongthink will no doubt either not show such results, or attribute them to people’s concern over all the white supremacy and the fact that there are still Trump voters wandering the streets and endangering lives.


        • I agree, my proclivities run to the… unusual. I’m fascinated by people who think there are no good faith disagreements.


        • I’ve come to believe that is projection. People who believe AN argument is being made in bad faith typically observes that Person X or *maybe* organization X is making a bad faith argument. To say that millions or hundreds of millions of people are by definition making bad faith arguments based in mustache-twirling evil or inescapable neanderthal bigotry (but are smart enough to slyly disguise those arguments as deceptively reasonable, fact-based disagreements) . . . that’s projection, IMO. People see all disagreeing arguments as being bad faith only when they, themselves, argue in bad faith almost entirely.

          So it’s not surprising to see the argument that any disagreement with their argument is made in bad faith when it seems very likely that they, themselves, are knowingly or quasi-knowingly making bad faith arguments themselves.


        • The left lives in a bubble that never challenges their views. That is why it never even occurs to them that someone could disagree in good faith. They have only heard the strawman arguments.


    • It is time to ask Biden, Schumer, and Pelosi directly if they support this.

      Fox should be relentless asking these people to pick a side.


  6. In July, Berkeley became what was believed to be the first city in the nation to plan to prohibit police officers from conducting traffic stops and shift that responsibility to unarmed members of a department of transportation.

    I don’t think I would volunteer for the team conducting traffic stops under those circumstances. Apparently no unarmed DOT members have been killed or maimed. Probably they don’t stop anyone who looks the least bit suspicious. If you are a driver who wants to speed or run red lights in Berkeley, have a two day beard growth, wear dark sunglasses, and dress in pseudomilitary fatigues with prominent skull and crossbones decals on your mufflerless car.


    • They voted for this crap. Let ’em live with it.


    • That is 100% the strategy I would use if I was in that position. And a lot of traffic stops are revenue generators–this way, they all can be. The people who can be profiled as “likely to be violent and potentially shoot me” are also people who can be profiled as “unlikely to pay traffic ticket or court costs”. So put in that position, I’d only be pulling over people who looked middle-class, family-oriented, productive-member-of-society types. If you looked like you were planning a terrorist attack I’d see no traffic violation there.


    • Why would you stop for someone who isn’t an actual police officer?


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