Morning Report: Personal incomes rise

Vital Statistics:

  Last Change
S&P futures 4,381 -26.2
Oil (WTI) 73.44 -0.45
10 year government bond yield   1.25%
30 year fixed rate mortgage   3.02%

Stocks are lower this morning as investors worry about the Delta variant of COVID. Bonds and MBS are up.


Personal incomes rose 0.1% in June, which was higher than expectations. Personal consumption expenditures rose 1%, which beat the Street as well. The inflation numbers are elevated, with the PCE price index (the Fed’s preferred measure of inflation) coming in at 4% on the headline number and 3.5% on the core number.


The employment cost index rose 0.7% in the second quarter. Wages and salaries increased 0.9%, while benefit costs increased 0.4%. For the year, employment costs are up 2.9%, with a 3.2% increase in wages and a 2.2% increase in benefits. The increase in inflation is probably transitory as the Fed has said a million times, but bears watching.


Biden asked Congress to extend the eviction moratorium that expires on Saturday. A court ruled that CDC didn’t have the authority to impose an eviction moratorium, so the government can’t play that card any more. While the House is planning on taking up the issue today, the chance of getting a legislative extension in place this late in the game is a pretty heavy lift, so we should assume the moratorium will end on Saturday.


Home price appreciation is fastest at the valuation extremes, according to Redfin. Luxury prices rose 26%, while the most affordable bucket rose 19%. Luxury is playing catch up after languishing ever since the bubble burst. The most affordable segments are prime rental stock, so first time homebuyers are competing with professional investors.

24 Responses

  1. I really don’t understand how the Republicans can’t beat these people:

    “Homeownership can bring out the worst in you

    It’s the biggest thing you might ever buy. And it could be turning you into a bad person.

    By Jerusalem Demsas
    Jul 30, 2021, 8:00am EDT ”


    • who? the nimbys or the activists pushing affordable housing.

      at the end of the day, it is all about schools.


    • Almost as bad as home ownership: owning any private property. Get rid of private property entirely and: utopia!

      The Republican Party is full of its own out of touch elites and occasional gun-toting conspiracy theorist. The politicians are always more focused on branding and their own fiefdoms. It’s the out-if-touchness that keeps them from making straightforward arguments that resonate with the general electorate, most of the time. And the pernicious influence of the donor classes.


  2. Good read:

    “The FBI’s Domestic “War on Terror” Is an Authoritarian Power Grab

    By Branko Marcetic

    Buzzfeed has revealed the FBI played a leading role in orchestrating last year’s far-right terrorist plot against Michigan governor Gretchen Whitmer — which the bureau then foiled, to great fanfare. The incident has since been used to hand the FBI even more power.”


  3. FYI Brent:

    “Opinion | With the Eviction Moratorium Ending, It’s Time to Focus on Landlords

    Biden wants to expand housing vouchers, but that won’t help renters unless landlords accept them.

    Opinion by DANI ISAACSOHN

    07/30/2021 01:09 PM EDT

    Dani Isaacsohn is the founder and CEO of Cohear, a community engagement and research firm based in Ohio.”


    • It cracks me up. The government doesn’t understand the juice ain’t worth the squeeze.


    • I would add that between the use of the False Claims Act under Obama and Ginnie’s proposed increased capital requirements the government is working overtime to alienate GNMA issuers.

      And that is where the financing is going to come from.


  4. Good piece:


  5. Goddamn


  6. Like

    • the replies were so funny.

      i love how the left tries to pretend that they never pushed defund the police and that it is just a RW talking point.


      • The former Blackwater guy as her security is just perfect.


      • That’s a great trick, one of the many they have. Like always being on the “right side of history” by pretending everything awful progressivism/socialism/“youth revolution” has done belongs to someone else or was, in fact, a conservative or right-wing thing.

        Thus everything they advocate loudly for at one moment can be memory-holed immediately. The right then complains about some crazy, elitist fantasy and then the right’s objections are resonating with the public or being echoed by the people the left considers their constituents—and suddenly they never used the exact words their critics are quoting, they never “meant” what their words plainly said, etc, etc.

        This a great rhetorical gimmick. They can advocate for whatever they want—no matter how insane or unpopular—and when it turns out to be political suicide they immediately hang it around the neck of their critics and claim they never said it or their words have been twisted —and then play the victim, saying that all they wanted was some modest good, and because they just want police to not murder minorities in cold blood, Republicans are *lying* because they don’t want the cold blooded murders to end!

        Or whatever.

        It’s a rhetorical device that works on the dedicated cult members and low-information voters—which is apparently a lot of people.


  7. Brent you think that there will be a lot of foreclosure initiations right away to beat the new CFPB regulations?

    “A new rule adopted by the CFPB requires mortgage servicers to review an application from homeowners before initiating a foreclosure in 2021, which allows homeowners to explore all possible options for resolving debt, including selling the home, pushing the debt to the end of the loan, or reducing the monthly payment.

    But the CFPB’s protections don’t go into effect until Aug. 31. This leaves a month for mortgage servicers to initiate foreclosures on those not in forbearance. An estimated 900,000 homeowners who will exit forbearance by the end of the year will face foreclosure only as a last resort, along with those who aren’t foreclosed on in August.”


    • Bottom line for a servicer, modifying a loan is easier and less costly than foreclosing. But the government definitely wants servicers to mod not foreclose.


      • Presumably there’s a limit to the ability to mod if they haven’t made any payments during the forbearance and/or are still unemployed/underemployed.


        • you get some leeway with debt to income ratios, but if there is no chance of the borrower being able to afford a new payment then the best thing to do is have the borrower sell the house, close out the loan and move somewhere cheaper


  8. Please someone get a picture of Biden at this, ideally maskless:


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

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