Morning Report: The Atlanta Fed sees 10.5% GDP growth in Q2

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S&P futures4,155-13.8
Oil (WTI)65.330.07
10 year government bond yield 1.65%
30 year fixed rate mortgage 3.20%



Stocks are lower this morning as COVID cases increase in Asia. Bonds and MBS are down small.



The upcoming week won’t have much in the way of market-moving data, however we will get housing info with housing starts and existing home sales. We will also have a lot of Fed-speak and will get the minutes from the April FOMC meeting on Wednesday.



Manufacturing activity was flat in New York State, according to the NY Fed’s Empire Manufacturing Survey. New Orders and shipments improved strongly, although we did see shipment times expand. Prices are also increasing as raw materials get more expensive.



The Atlanta Fed’s GDP Now indicator is forecasting 10.5% GDP for the second quarter.



Three quarters of home offers were competitive situation, according to Redfin. The hottest markets are Spokane, San Diego, Boise, Salt Lake City, and Phoenix. We are seeing all-cash offers win out over offers with a financing contingency. “The homes for sale today are high-quality, desirable homes—a dynamic that’s fueling more competition. This is a contrast from the winter, when most properties coming on the market were bottom-of-the-barrel homes. The difference is that today’s sellers are folks who want to sell, whereas many sellers back in the winter had to sell and didn’t have time to do any upgrades.”

This image has an empty alt attribute; its file name is redfin-bidding-war.jpg

52 Responses

  1. Does the military leadership actually believe this shit?

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    • Yes, because that was how you got promoted in Obama’s military

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      • Off topic: Music and old age –

        So this morning I had a clean colonoscopy and got the great news I never have to do it again. If you haven’t had one yet its the prep not the procedure that is wretched.

        I am on the cart in the waiting to be scoped area playing Sultans of Swing on my Android and the nurse says “wow! that’s fantastic” during the extended guitar solo and asks me who is this great band? I think she is making fun of me but no, she never heard of Dire Straits or Mark Knopfler and she looks it up on YouTube on her cell phone and walks off playing it, muttering “1977?”

        Liked by 1 person

        • Congrats.

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        • Glad to hear it re the colonoscopy!

          Speaking of music it brings to mind a subject I think I’ve brought up before, The Perfect Album. This is an album where every song is a winner and the album is enjoyable from start to finish. I’ve thought of several albums: Never Mind the Bullocks, the Sex Pistols; Who’s Next, The Who; London Calling, The Clash; Dark Side of the Moon, Pink Floyd.

          Remember, the album can’t have any songs you might skip over.

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        • Agree on Who’s Next. I think it may be the earliest one I can think of. Agree on Dark Side. I don’t think there is a throwaway on Hotel California, or on Sting’s Blue Turtles, or Dire Straits’ Brothers in Arms.

          Willie did a divorce album that I think was called Phases and Changes and from memory I think I never skipped anything on it. Of course I was probably going through a divorce,

          I haven’t listened in a long time to these so I am going on memory of what I did not fast forward or skip in the car. Michael Martin Murphey’s Cowboy Songs?

          Greatest hits albums don’t count, of course. That would be cheating.

          There was a Kathy Mattea album I never skipped because of her voice even though there were only three really good songs on it. Saw her live in Austin around 1989 and was hooked.

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        • My pick would be Revolver by The Beatles.

          In fact there is a reasonable argument to be made that Rubber Soul, Revolver, and Sgt Pepper’s are all perfect, but regardless that lineup surely must be the greatest 3 consecutive album run by any single group, ever.

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        • Not saying your wrong but The Rolling Stones Studio releases of Beggar’s Banquet, Let it Bleed and Sticky Fingers were pretty good.

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        • The Stones were more to my liking – so was Cream. So I would prefer those albums as well, but they all had throwaways. Your first group, insofar as I can recall, were closer to perfect. We get into just good albums and the floodgates open.

          There have been great no throwaway cut jazz albums for we who like jazz. Three came out my senior year in HS. Kind of Blue, Giant Steps, and Take Five.

          In the seventies, Jim Hall, Paul Desmond, Chet Baker, Steve Gadd, Ron Carter, and Roland Hanna got together to make the album Concierto. Perfect.

          If you like guitars, Knopfler and Chet Atkins did Neck and Neck . Brent, what did you think of it?

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        • You’re right of course, I was devils advocating the Stones triplet over the Beatles one proposed by Scott as the best three consecutive albums.

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        • Almost agree on Revolver.

          I liked some earlier albums better than the final albums, and I thought that Revolver was the last great album, and the best. Eleanor Rigby and Taxman were enough to carry the album, but I always FFd or skipped Dr. Robert, and I think Got to get you Into my Life was on Revolver, another skip for me.

          Limit the category to pop and there are a few 3 consecutive runs for them. Personally, I liked the Hard Days Night and Help! albums a lot.

          Saw Help! the night we finished summer session finals in Law School, felt so good we drove to see my sister who was working as a camp counselor in Estes Park, CO. The camp had no guest lodging so Randy slept in the back of the VW and I slept in the front. We met two girls at the University of Denver LS the next evening and salvaged the trip.

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        • Was it a VW van? Not seeing how you can sleep in any other VW. And even in the VW van, sleeping in the front w/out a reclining seat seems tough. Was the front a bench seat?

          I’m not calling you a liar, I’m just impressed with your sleeping ability.

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        • It was as terrible as you think. I sat against the passenger door with my knees hooked up and a wool lumberjack shirt for a blanket and a backpack for a pillow. So tired I slept a little.

          We left Austin around 10:30 PM drove straight through with a short provision stop in Amarillo, got to Estes Park at about 8 PM Mountain time. Still light. They let my sister come and speak to us for, oh, fifteen minutes. We thought they would have some guest accommodation but they did not. We were too tired to drive back to Denver that night, and if we had access to a cell phone [ha] we might have found a nearby place to sleep. There are places in that area but we did not have a clue. So at dawn we drove back to Denver, got a cheap motel, actually slept, and showered and shaved. Ate a VERY late breakfast for lunch and went over to the UD LS where Randy knew a guy. That led to meeting others and we got happier.

          Ya gotta remember that going from Austin to Colorado in August is like a life saving event in itself.

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        • It’s like a trip to San Diego is July when you live in Phoenix or Tucson, so I get it.

          When I was around 7 or 8 my mom, sister and I travelled from the Bay Area to Cour d’lane Idaho in a VW bug. I spent the entire trip in the backseat.

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        • Mark:

          but I always FFd or skipped Dr. Robert, and I think Got to get you Into my Life was on Revolver, another skip for me.

          I actually agree with you on Dr. Robert….that is the weakest song on the album and potentially skip-worthy (I like GTGYIML). But interestingly, when Revolver was originally released in the US, it was released without 3 songs that were on the UK release, and Dr. Robert was one of them (along with “I’m Only Sleeping” and “ Your Bird Can Sing”). So on McWing’s metric, the original US version is “more” perfect than the UK version, even though it is missing 2 really good songs!

          I think the only thing that keeps Rubber Soul from being perfect is “What Goes On” by Ringo.

          And for me Sgt. Pepper’s only miss is Harrison’s “Within You, Without You”, which outside of “A Day In The Life” (actually 2 songs spliced together), is unfortunately the longest song by far on the album. If it was half the length, I would have just dealt with it, but clocking in at over 5 mins, I had to skip past it, making Sgt. Pepper just shy of perfect. I was never a fan of Harrison’s sitar/Indian phase, although I know that is sacrilege to a lot of Beatles afficiandos. As you might guess, Taxman has always been my favourite Harrison song.

          The White Album could have been perfect if they weren’t intent on making it a double album. Plenty of great songs, but also a lot of crap.

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        • But interestingly, when Revolver was originally released in the US, it was released without 3 songs that were on the UK release

          That explains why I never heard [or at least never paid attention to] the song until I purchased the Past Masters CDs of the entire Beatles discography for my brand new CD player in 1988.

          1990 – after that divorce. I wouldn’t still have them if it was 1989.

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        • That’s why advise everybody who listens to avoid romantic entanglements entirely if at all possible, and definitely avoid marriage!

          Not that I would have listened to that advice when I got married. Because I was young and stupid.

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        • I agree Kevin. In my sincere opinion there is no upside for men to marry.

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        • Except–potentially–for the raising of children. I feel everything indicates that a married two-parent household is the best for raising children.

          And that needs to be your primary goal as a married parent, not enjoying the married relationship for your own benefit in any way. 😉

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        • Skipping Got To Get You Into My Life? Hard no on that.

          I used to listen to the entire Sgt. Peppers album over and over again around 8th grade. I had it on 8-track so fast-forwarding really wasn’t an option. But I’m not really remembering Within You, Without You, so I’m guessing I just tuned it out and it didn’t merit any permanent retention in the memory banks. I’m listening to it now so I can refresh my memory (I haven’t done a full listen of Sgt. Peppers since 9th grade, probably). Yup. I do vaguely recognize it. Sure enough, I think I just ignored it in favor of whatever else I was doing at the time–just let it become background noise. Although I guarantee you I’ve heard to 60 or 70 times.

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        • Really didn’t remember Dr. Robert, although I feel like I’ve heard every Beatles song at least once. And even it is vaguely familiar. But outside of Sgt. Peppers, my Beatles exposure was limited to the big compilations–1962-1966 and 1967-1970. Which I got for like $5 an LP at Target circa 1982/1983 as I recall. Although over the years I think I’ve heard most of it, including bootlegs and demo tapes I downloaded in the early days of Napster and file sharing and .mp3s.

          But yeah, I’d say Dr. Robert is a pass.

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        • This is true. You can’t beat the 3 album run. Also can’t match the Beatles overall innovation and impact on subsequent music. Others were trying then and have tried since but I don’t think anyone has had the same broad level of impact. Not sure anyone can now.

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        • I would argue Bob Dylan’s impact has exceeded the Beatles.

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        • I would be interested in hearing your argument for that. I’m not seeing it, but I could well be wrong.

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        • I guess because he influenced the Beatles significantly and changed their songwriting.

          Here is a good explainer-

          https://faroutmagazine.co.uk/how-bob-dylan-influenced-the-beatles-lennon-mccartney/

          I think Bringing it All Back Home and Highway 61 and Blond on Blond were more influential to musicians than the Rubber Soul, Revolver and Sgt. Pepper’s Triplet.

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        • Thomas Dolby: The Golden Age of Wireless. I will listen to all of pretty much any Dolby album but that one was his best.

          Kate Bush: Hounds of Love.

          Peter Gabriel: Four. So is a close runner-up. First Art of Noise Album. Planet P Project. Also Planet P: Pink World, which is a concept album so you kind of had to listen to the whole thing.

          All mine will probably be from the 80s. A few 90s albums I’d listen to in their entirety but I don’t know if I’d call them perfect. I like Chumbawumba’s Tubthumper album and would listen to the whole thing, do the same with the Smash Mouth album with All-Star on it. Jill Sobule’s Pink Pearl and Happy Town would routinely get complete listens. But perfect albums?

          Eh. If I had to pick one it would be Golden Age of Wireless.

          The Buggles: Plastic Age is another one for me. Great album, near-perfect, will listen to everything on it. Their next album (which I had to order from Amazon from a Japanese-reseller because it wasn’t in print in the US) . . . I can barely listen to any of that. A bizarre drop-off in quality.

          Given time I could probably think of several more.

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        • And of course greatest hits albums don’t count, but I had multiple copies of The Best of Blondie and Best of ABBA that a wore out.

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        • Nine Inch Nails: Pretty Hate Machine. Also one for me.

          Oh, and Tori Amos’s first album, Little Earthquakes.

          So two more I thought of.

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        • I’ll add The Modern Lovers first album as well as The Who’s Quadraphenia.

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        • Thinking about how lyrics get you at different times – my favorite divorce song – Lyle Lovett

          And if the stars didn’t shine on the water
          Then the sun wouldn’t burn on the sand
          And if I were the man you wanted
          I would not be the man that I am

          My next favorite divorce song – same divorce –

          Your Latest Trick – Dire Straits

          I don’t know how it happened
          It was faster than the eye could flick
          But all I can do is hand it to you
          And your latest trick

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        • Which suggests to me you should only get married if you’re a musician and you’re looking forward to one day writing an excellent divorce song! 😉

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        • You might learn the tests aren’t as accurate or worthwhile as previously thought? Because that’s the feeling I’m getting.

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        • Brent, what did you think of it?

          Haven’t heard it, but it sounds good. I’ll have to check it out.

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        • As far as great albums go,

          Van Halen I
          Iron Maiden Powerslave
          Metallica Kill Em All
          UFO Lights Out
          Ozzy, Diary and Blizzard

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        • I always dig Piece of Mind and Number of the Beasts, and your Ozzie selections are good. Interestingly the only Metallica album I owned was Kill Em All. Van Halen I is top notch. I was awfully tempted to add AC/DC’s Let Their Be Rock.

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        • Also am thinking heavily on adding Grateful Dead’s Workingman’s Dead.

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    • Who knows. Maybe? The world’s gone insane so . . . maybe.

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  2. There is an awful lot of appalling stuff in this piece. Frankly, I found it sickening and deeply depressing though I feel like I shouldn’t be surprised by it.

    https://www.axios.com/off-the-rails-trump-military-withdraw-afghanistan-5717012a-d55d-4819-a79f-805d5eb3c6e2.html

    I’ve felt I’ve been exceedingly cynical for the last several years but now I realized that I was not nearly cynical enough. It’s like discovering that every crazy conspiracy theory you’d ever heard of is true.

    Liked by 1 person

    • Good piece. The lame duck period was not the time to actually do this. If Trump wanted the withdrawal actually done, he had four years to get it done.

      I think it might have actually helped his reelection chances if he had completed it.

      Liked by 1 person

      • Oh, I agree that it showed Trump’s weakness regarding personnel among other things. That said, POTUS is not in control of the military, which I guess I knew, but not to the extent I thought I knew. I thought Eisenhower was being ridiculously paranoid, really. However, he wasn’t being paranoid enough. Nor frankly was John Stormer with his book. I honestly do not think any of the government is accountable to anyone. There really is no hope for influence or attempt to shape policy by voting. Truthfully, the only real objective of voting anymore is to keep trying to elect people who will cut taxes.

        Liked by 1 person

  3. I assume most of us are reading Taibbi here, but still . . . Good read:

    https://taibbi.substack.com/p/is-slack-destroying-american-companies?token=eyJ1c2VyX2lkIjo4NTc0NzI2LCJwb3N0X2lkIjozNjUwNTUyMiwiXyI6ImlqVWlBIiwiaWF0IjoxNjIxMjg3OTM2LCJleHAiOjE2MjEyOTE1MzYsImlzcyI6InB1Yi0xMDQyIiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.-HQsQJnM84zVXHSPIeKQB–kAC-EUvCGC3Kc4dzBxXQ

    Then, within weeks, Armstrong and Coinbase leadership flipped completely, announcing that the firm would no longer engage in “social activism,” and any employee who didn’t like the new policy could get the fuck out.

    Coinbase offered 4-6 months of severance (depending on service time) and six months of COBRA, in a statement saying — in the thickest corporate sarcasm — that the arrangement could be a “win-win” for the politically minded, as “life is too short to work at a company you’re not excited about.” Only about 60 of the company’s 1,200 employees took the buyout.

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    • I had a meeting with our new HR person yesterday and this issue came up. In the context of “I don’t understand this desire to air personal life issues at hte office”

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      • ” Americans in my age group, Gen-Xers, were poorly prepared for corporate jobs in that a lot of us were somehow surprised to learn our ethnomusicology or (in my case) creative writing degrees were fairly useless for finding paying work. In conjunction with the huge sums many people borrowed to get those educations, the whole thing was a bit of a scam, though of course we should have known better.

        Millennials had it worse. They attended the same academic resort spas, and were handed the same oft-preposterous degrees, but were additionally indoctrinated in affirming ideological oat-baths stressing the righteousness of their lived experiences. If the big surprise my generation faced was that our educations were worth bupkes to employers, the next generation had to deal with the shock of corporate bosses being indifferent to their emotional needs.”

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        • ” academic resort spas”
          what a great way to characterize college life

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        • ” Americans in my age group, Gen-Xers, were poorly prepared for corporate jobs in that a lot of us were somehow surprised to learn our ethnomusicology or (in my case) creative writing degrees were fairly useless for finding paying work. In conjunction with the huge sums many people borrowed to get those educations, the whole thing was a bit of a scam, though of course we should have known better.”

          My degree is in Creative Writing from the University of Arizona and my first job out of college, which I landed in 1990, paid me a salary of $25k plus a company car. It was in sales, they even put me in a formal training program for three months, flying me all around the country or putting me up at their corporate HQ. Since then I’ve progressively improved my sales skills and my income. I don’t particularly like sales, I’m an introvert and shy by nature and have to fight that instinct every I’m continually amazed that I get paid as much as I do for what I do considering I the rather pathetic degree I have. Does college prepare you for working? No, it never was intended to, it’s merely a replacement for an IQ test after those were banned.

          You have to go out and prepare yourself. Also, don’t do the follow your passion horseshit. Go get a paying job doing something, most places will train you. If you’re not getting hired it’s because the employer thinks you’re not capable of providing (eventually) value to them.

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        • I quoted that same quote elsewhere.

          They attended the same academic resort spas, and were handed the same oft-preposterous degrees, but were additionally indoctrinated in affirming ideological oat-baths stressing the righteousness of their lived experiences.

          It’s rare I encounter writing I’m envious of these days, but I gotta say I’m envious of that sentence. Captures so much, so accurately, and so elegantly.

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      • Age. We’re raising a non-trivial portion of millennials and Gen Z to be unrepentant narcissists, for whom everything must be about them and their feelings. Honestly, this has been true from Boomers to Gen X–some portion has always been raised to be more coddled and entitled, and that portion has been growing with each generation, both in number and degree of entitlement.

        We’ve gotten past the tipping point where entitled folks were accidentally hired and were a pain-in-the-ass and causes lots of problems until finally ejected from the organization . . . to the point where now they either dominate the company in numbers, at the top of the food chain, or in other forms of power that give them outsize control.

        For orgs with large Gen Z and millenial work populations, they are often surprised to the degree to which their workers regard the job as an extension of their personal life and proclivities, and feel entitled to have the company endorse their personal belief systems and become enraged when the company demurs.

        I’ve had a sense of that forever. Everybody I’ve hired has been older. Often not that far from retirement, but I’m willing to go with someone I know will retire in the next 5 to 10 years over a millenial or Gen Z I expect to be out in 6 months (which they routinely are: large urban school districts are old fashioned in their hierarchy, and so new hires far down the foodchain just don’t matter . . . and there’s no Slack, no diversity meetings or affinity groups, no struggle sessions . . . they almost never stay).

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    • One of my best decisions ever was to veto the introduction of Slack, etc into the company I work for.

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      • i’ve never used it. but i don’t see why a firm-wide messenger/chat app would be desirable at all.

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      • Turns out to be an awful idea most of the time. I understand the idea of easy collaboration and communication, but the execution turns out to be not so good, especially given the proclivities of people generally, and millenials and Gen Z in particular. The last thing you want to do, it turns out, is to avoid face-to-face meetings where they are actually possible, and allow the easy creation of intentional or accidental fifth columns that are entirely unobservable–or at least unlikely to be noticed–until it’s too late.

        If a bunch of employees were getting together in the break room and complaining about every new thing routinely, people would notice. They might feel awkward about spending so much of their time complaining about stuff, if forced to do it out loud at the water cooler. Might be concerned about their job when bosses walked by for the fourth time and they were still bitching about the president or something.

        Slack–like Communism–turns out to be a much better idea in theory than in practice.

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