Morning Report: Yields rise on hot inflation numbers

Vital Statistics:


  Last Change
S&P futures 3913 -14.4
Oil (WTI) 65.82 -0.036
10 year government bond yield   1.60%
30 year fixed rate mortgage   3.2%

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


The stimulus bill is signed and checks could start hitting bank accounts as early as this weekend.


Still nothing as far as guidance out of Fannie and Freddie regarding exactly how the investment limits are going to work. The MBA is supposedly aware and concerned, but that is about it. Note that the last time Fannie and Fred introduced a massive policy change (the adverse market fee), they ended up delaying it a few months so lenders could clear out their pipelines.


Unfortunately, Fan and Fred interpret the directive differently, and I am hearing that even different reps in the same company are giving different advice.


The Producer Price Index rose 0.5% MOM and 2.8% YOY, which is much higher than the Fed’s 2% inflation target. Ex-food, energy and trade services, it rose 0.2% MOM and 2.2% YOY. While one print of the PPI doesn’t mean inflation is back, bonds don’t like it and yields are up accordingly.


Foreclosure filings rose 16% MOM, but are down 77% from a year ago. This is a completely artificial number however due to foreclosure moratoriums. “Extensions to the federal government’s foreclosure moratorium and CARES Act mortgage forbearance program continue to keep foreclosure activity historically low,” said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company. “These government actions, and the efforts of lenders and mortgage servicing companies, have helped millions of homeowners avoid foreclosure during a year-long global pandemic and a recession that resulted in 22 million lost jobs.”


Nearly half of all Americans missed a mortgage or rent payment during the pandemic.


The labor market is on the mend, with job openings rising to 6.9 million at the end of January. The quits rate, which tends to lead wage increases was stable at 2.3%.

70 Responses

  1. Andrew Sullivan’s take tends to explain, to me, why Trump lost:

    Step back some more, and look at the rest of the Biden agenda. It’s pretty similar in scale and ambition. HR1 — reforming democracy — has some good parts, but it is also a Christmas tree of hyper-progressive goals. On “social justice” questions, Biden mandates “equity” as a core principle in all policy-making, and Ibram Kendi indoctrination sessions for government employees; he is likely to end due process for college men accused of sexual assault or rape; he wants to legislate that sex-based rights are trumped by gender-based rights, and to repeal the Religious Freedom Restoration Act when it comes to gays, lesbians and transgender people. After a lifetime of opposition, Biden now backs full public funding of abortion. On immigration, Biden’s goal appears to be facilitating as much of it as possible, while granting a mass amnesty. Am I missing something? Is there a policy area where the left is not in control? (Seriously, if you can find an area where they’re not, I’ll post it, and recalibrate.)

    But don’t fucking tell me I should have voted for Trump. He’s insane. And he made this left triumphalism possible, by destroying the vestiges of fiscal conservatism in the GOP. It is so telling that Republicans have barely made any of the fiscal arguments I just cited — because they don’t have a leg to stand on. If they bring up the danger of debt, they deserve to be laughed and/or booed off the stage.

    Emphasis mine.


    • Also says this: I voted for Biden because the alternative was madness in every respect — and sure wasn’t conservatism in any recognizable sense. And the sheer, amazing relief of living without the former guy’s unhinged, all-pervasive id remains. No regrets. And I didn’t expect Biden to be a moderate, because he has always operated with an acute sense of where his party now is — and it is now controlled by the far left.


      • Why did the media make Trump the story 24/7? Does Trump have some sort of power that makes Dr. Sullivan, OBGYN helpless? Jesus Christ it’s all about style with everybody. If you’re getting the substance you want who gives a fuck?


        • They don’t care about anything but appearances. Sullivan goes on about how he’s awakened to class struggle and wealth inequality … while those things were getting better during the Trump admin and will almost certainly get worse under Biden. But it doesn’t matter! Trump was craaazy!


    • It’s the same article all the time. Can he not write something that doesn’t mention Trump or Palin’s uterus? Serious question, after the Trig Truther stuff, why does anybody take him seriously?


    • “We then witnessed the first violent transfer of power in American history”

      No you didn’t.

      And the real problem here is one party in control of everything. Had the Senate stayed in Republican hands, the progressive overreach could have been restrained.


      • jnc:

        And the real problem here is one party in control of everything

        No it’s not. It’s the particular party that is in control. In 2016 the R’s were in control of everything and this insane shit wasn’t going on, was it?

        Had the Senate stayed in Republican hands, the progressive overreach could have been restrained.

        Had the presidency stayed in Republican hands it would have been even even more restrained.


        • No. It’s not the same. When Republicans control the 3 branches they still don’t control the media, Hollywood or academia. If they did then yes it could become a problem. But now one party controls DC the media runs cover for them … and the Federal bureaucracy is also left-dominated so they push or cooperate with every leftward lurch but resist anything centrist or rightwards.

          The GOP / the right is never control of everything. I’m sure they could do bad things despite ideological positions I’d find more endearing if they had uniform dominance across all the institutions but they don’t ever. The left does. More so with each election cycle in which they are victorious.


        • KW:

          No. It’s not the same. When Republicans control the 3 branches they still don’t control the media, Hollywood or academia. If they did then yes it could become a problem. But now one party controls DC the media runs cover for them … and the Federal bureaucracy is also left-dominated so they push or cooperate with every leftward lurch but resist anything centrist or rightwards.

          You are absolutely, 100% correct. And that is why I think it is myopic to think that split government will do anything to prevent the leftward march of progressivism. As you say, even full-on R control of government can’t adequately offset the influence of all the rest of our cultural institutions, so split control can only make things worse.


      • The real problem here is not the senate but the alignment between the elected left and the left bureaucracy and all the leftwards leaning cultural institutions. It would be different if we had a media that didn’t operate as an arm of the Democratic left and lefty dominance of the bureaucracy and academia, etc. the cultural dominance, IMO, often pushed conservative politicians and judges leftwards.

        It would help to have the senate and a red wave in the house in 2022 would be positive if it happens. But it won’t lead to compromise like Clinton.

        There’s no need. They have everything else, all the time. All they have to is wait. And probably not that long. A d they have the resources to obstruct and poison the well while not controlling the presidency or the senate.

        Only thing that can do serious damage to the Dems/the left and their agenda is them.


        • the thing that annoys me to no end is that the left controls damn near every major institution, and they somehow fantasize they are the plucky underdog. ..


        • This seems to me human nature—enough is never enough. They win the lottery and they complain they still don’t have Bill Gates’ net worth.

          When the right does enjoy a victory they have the same complaint, ultimately. It’s just more persuasive from the right, especially now, given the iron grip the left has on so many cultural institutions.

          But I think that’s a human thing. The thrill of victory evaporates as if it were never there. So you look for the next world to conquer. It’s why checks and balances are so important, and eroding them a horrible idea—no matter how principled you may believe your reasons for doing so are. IMO


  2. Mark:

    More on the pervasiveness of CRT in the culture and the damage it is doing.

    A doctor has been forced out of his position at the Journal of the American Medical Association (JAMA) after expressing a desire to ameliorate racial disparities and to better understand the concept of “structural racism,” but asking whether there might be a more productive term for it.

    Edward H. Livingston resigned after being accused of hosting “a harmful podcast” that “minimized the effects of systemic racism in health care and questioned its profound impact on millions of people across the county.”

    This is his thinking that was deemed so offensive that he had to go:

    Structural racism is an unfortunate term to describe a very real problem. There are structural problems in our society, as Dr. Katz pointed out. There are neighborhoods that are impoverished. The quality of life is poor in those areas because we may put factories in them or have major thoroughfares that travel through them. But we strive to have a society that’s more equal, where everybody has the same opportunities so that hard-working people can improve those neighborhoods and make them better for the people who live there.

    The racism part means in those poor areas there tends to be a disproportionate share of certain kinds of races, such as blacks or Hispanics. They aren’t there because they aren’t allowed to buy houses in better neighborhoods, or they can’t get a job because they’re black or Hispanic. That would be illegal.

    But disproportionality does exist, and we as a society need to figure out why that occurs and how to make things better for those who live in structurally undesirable circumstances.

    I want to especially bring to your attention this:

    Dr. Aletha Maybank, the AMA’s chief health equity officer, wrote on a social media thread that “the podcast/tweet are/were wrong, absolutely appalling & at its very core is a demonstration of structural & institutional racism,” adding, “I am furious.”

    The AMA, the oldest and one of the most respected medical associations in the nation, has a chief health equity officer. There’s that word again. As I said the other day, this shit is everywhere. It should be highly disturbing to every reasonable person.


    • The addition of “equity” seems to mean “now we can eat our own”. Ultimately I see it as an u intentional positive in this case that someone wanted to again reshape language to make the narrative more propagandistically effective and got cancelled, albeit for the wrong reasons.


  3. Apparently a Georgetown law school professor has been fired for what the Dean of the law school says were “reprehensible statements concerning the evaluation of Black students”. The comments were made in a Zoom call with a colleague, a recording of which was subsequently posted online. It is unclear who posted it.

    So what were these “reprehensible” statements?

    You know what? I hate to say this, I end up having this angst every semester that a lot of my lower ones are Blacks. Happens almost every semester and it’s like ‘oh come on.’

    BTW, exam grading at Georgetown Law is anonymous. Professors don’t know the identity of the exam taker until after the exam has already been graded.

    Also worth noting…the “incident” was investigated by the Office of Diversity, Equity and Affirmative Action. Huh…there’s that word again.

    I fully expect that at some point the anonymous grading system will have to be eliminated, because under CRT, a person’s race must be known in order to “equitably” grade exams.


  4. I’ve said this for a long time.


Be kind, show respect, and all will be right with the world.

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