Morning Report: Manufacturers see shortages lasting through 2022.

 

Vital Statistics:

  Last Change
S&P futures 4,607 1.2
Oil (WTI) 83.42 0.41
10 year government bond yield   1.56%
30 year fixed rate mortgage   3.30%

Stocks are flattish this morning as the Fed begins its 2-day FOMC meeting. Bonds and MBS are up small.

 

Manufacturing decelerated in October, according to the ISM Manufacturing Survey. We saw a big decline in the index for new orders, while the Prices Index rose substantially. “Business Survey Committee panelists reported that their companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand. All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products. Global pandemic-related issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential. However, panel sentiment remains strongly optimistic, with four positive growth comments for every cautious comment. Panelists are fully focused on supply chain issues in order to respond to the ongoing high levels of demand.”

The biggest complaint has been the inability to get products out of China. Rolling blackouts are exacerbating the problems. The report has some individual responses from companies in different industries. Many see the shortages continuing through 2022.

 

Home prices rose 18% in September, according to CoreLogic. CoreLogic sees the home price appreciation slowing to 2% over the next year, however. “The pandemic led prospective buyers to seek detached homes in communities with lower population density, such as suburbs and exurbs. As we head into 2022, we expect some moderation in the current pattern of flight away from urban cores as the pandemic wanes.”

 

Construction spending fell 0.7% MOM in September, according to the Census Bureau. Residential construction fell 0.4% MOM and rose 7.8% YOY.

 

The number of loans in forbearance fell again last week to 2.15%, according to the MBA. “For the first time since March 2020, the share of Fannie Mae and Freddie Mac loans in forbearance dropped below 1 percent,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “A small decline for this investor category was matched by similarly small declines for Ginnie Mae and portfolio/PLS loans. Forbearance exits slowed at the end of October to the slowest pace since late August. With so many borrowers having reached the end of their 18-month forbearance term, we expect a steady pace of exits in November.”

 

 

 

68 Responses

  1. The left has their narrative for VA: White Backlash

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    • PL got the memo.

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      • Wow, just read Greg this morning.

        He sounds like a preacher circa 1985 talking about heavy metal.

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        • Love how he and Waldman just ignore things like the stunt the Democrats and (maybe) the Lincoln Project pulled with the fake white nationalists at Youngkin’s rally.

          Had the situation been reversed, they would have been all over it for days. But at this point the hypocrisy is totally expected.

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        • It is. And I think a lot of the right leaning press would have been split (had this been some sort of right wing ploy to frame a Democrat for being supported by ISIS or something) between “this is awful, nobody on our side should be doing this” and “it doesn’t matter, it might as well be true” but wouldn’t just memory-hole it and ignore it–and most of it would have been “this is awful, there’s no excuse for this”.

          Of course conservative and right-of-center news sources tend to overtly identify their biases while NYT, WaPo, CNN, MSNBC all pretend to be neutral presenters of objective facts. So I don’t suppose that should be surprising.

          But also if a bunch of Proud Boys dressed up like ISIS fighters and showed up supporting a Democrat–some minority of right-wingers might dismiss it as a “protest” but I think most of them would acknowledge that it was an attempt to seriously shape the narrative, given how much of the first-tier response to the VA hoaxers was to uncritically tweet about it like it was 100% real. And the Lincoln Project retweeted those Tweets, apparently, without mentioning that it was in fact something they engineered as a kind of LARPing protest, their subsequent claim–but one that happened only after it was revealed.

          There is a lot of both-sides-ism and hypocrisy on both ideological poles, but I have a hard time believing many on the right would just shrug that off and say: “Oh, well, nothing to see here”. There would be mea culpas and it would absolutely be the end of whatever conservative organization tried to pull that stunt.

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        • Have not read it, not sure I can (WaPo has gotten much better about enforcing that paywall, so they can write stories I can’t read behind it about how walls don’t work and border walls are boondoggles) but that’s the left generally now. Modern progressives are all Victorian-era prudes reincarnated.

          Remember Pride & Prejudice and Zombies, the zombified re-write of Jane Austen? I really ought to write a woke-ified version of P&P. Because the emphasis on manners and knowing-your-place and strictures on speech . . . everything would fit. Just now you can’t get with Mr. Darcy because he’s a white European and the experts frown on the racism implied of white people coupling with white people. Although at some point a Twitter Messenger would ride up with good news: now miscegenation is racist, so it would be cultural appropriation to date outside of your own race! And it ends with everybody in their Equity Camp, doing force labor. Eh, I’d figure it out. I could make it work.

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        • “There would be mea culpas and it would absolutely be the end of whatever conservative organization tried to pull that stunt”

          I don’t think this is true. Project Veritas is still around and has been doing similar things for years.

          See also Roger Stone’s history. There’s a Netflix documentary on him.

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        • Maybe. Project Veritas isn’t exactly into false flags. They work at shaping a narrative but it’s more undercover reporting than staging fake incidents to feed the media. They clearly have an orientation and a goal beyond reportage but they aren’t The Lincoln Project having fake racists show up at a Youngkin rally, have they? Roger Stone’s history of false-flagging I’m not aware of but it’s believable.

          Eh, maybe so. And I just haven’t noticed.

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        • How much you wanna bet the SPLC still lists the stunt as a hate incident?

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        • They list being conservative as a hate crime so … the GOP is a hate group, basically. So yeah if not true it’s morally true and therefor a hate incident.

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      • I would add he embodies the complete lack of awareness the left has about itself.

        They control everything and still think they are oppressed.

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        • Which is a bad sign. When both sides control a lot of things (and from the leftist position, the right controls SCOTUS–although I’d dispute that, I get the idea, so that remains a problem for them) then both sides tend to feel oppressed. Both think they always lose, and that their side always rolls over for the other side.

          But when the right has a lot of power, it tends to be very much of the position: it’s all good, we’re winning. When the left has a lot of power, or almost all the power, they tend to still feel they are losing and oppressed because they don’t control everything. That’s bad, because they will never–individual by individual–control everything. Even if they literally controlled everything, there would still be some fellow communist that didn’t see it their way on one issue, and they’d feel oppressed. They are hammering Facebook for not doing enough to deplatform conservative (or any contradictory) thought, despite the fact that Facebook spent hundreds-of-millions on getting Democrats elected in 2020. It created entire organizations dedicated to expanding liberal and Democratic power. But it still wasn’t enough for a lot of people, obviously.

          So there is literally no point at which they will feel they have won and their thirst for power will be sated. I think COVID has made that clear–vaccination rates are very high, COVID itself is settling down into being a more flu-like illness in terms of mortality and illness, but until everyone is forced to be vaccinated, until everyone is forced to wear a mask, until everyone locks down until nobody is sick, some of them don’t want to stop.

          … There is also the politician/activist problem of “you can never solve the problem, or you are out of a job”. Part of their problem is, as they set it up, they can’t ever actually win because if they do they no longer have a purpose, and potentially may not have a paycheck. So the Nazis are always at the door.

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      • voted straight R this morning.
        i don’t know what the 3rd party person was all about.

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      • Voter voices: Anti-Biden sentiment resonates with some reluctant GOP voters in Virginia
        Return to menu
        By Julie Weil, Rebecca Tan and Zinya Salfiti1:09 p.m.

        Voters casting ballots for Republicans in Virginia on Tuesday said they were moved partly by Republican Glenn Youngkin’s tax-cut proposal and his comments about education, but also a general dislike of the country’s direction under President Biden.

        “Youngkin? I don’t even know his name, to be honest,” Kyrstina Agresta said outside a polling precinct in Loudon County, where she cast a party-line ballot for Republicans.

        Agresta, 34, usually doesn’t vote in the governor’s race, but given “everything wrong with the country,” she figured her vote would matter in Tuesday’s election.

        https://www.washingtonpost.com/politics/2021/11/02/election-live-updates/#link-62SC7WF5TFA2PDBIHKCKMHZ5VM

        bahabhabha!

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        • “Reluctant”. They have as big a problem with enthusiastic GOP voters, I’m betting. I know that (a) I do not like the GOP and (b) if the election was today, I’d vote a straight GOP ticket with great enthusiasm.

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        • This:

          “Agresta said, above all, she disagreed with how Democrat Terry McAuliffe had tried to link Youngkin to former president Donald Trump.

          “It’s like, get off it, it’s over, someone else is in charge now,” she said.”

          I think Youngkin was tactically smart to let McAuliffe do the work of letting Republican base voters know that Trump supported Youngkin while he focused on running against McAuliffe.

          McAuliffe should have focused more on his previous record as governor and less on saying “Trump Trump Trump” all the time.

          That whole piece is great.

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        • Have you seen the Trumpkin signs?
          they look like Youngkin ones to the point where if you’re not really looking, you’d mistake it.

          again, so Clintonian. too cute by half

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        • I’ve actually not seen any fake signs around here.

          Edit: Just saw the first fake Youngkin sign today.

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        • I don’t think it is anti-Biden sentiment as much as it is a vote against the D party itself.

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    • They had the narrative to explain 1994: disgruntled news objective news anchors characterized the Democrats losing the house after 40 years as being the result of a white male temper tantrum. It’s tried and true, and they will always go back to that well. It makes them feel better about themselves.

      Like

  2. Example of media not getting basic facts right,

    “Though Youngkin was widely considered the strongest Republican candidate, and defeated far Trumpier contenders in the primary,”

    https://www.theatlantic.com/ideas/archive/2021/11/glenn-youngkin-virginia-election-2021/620561/

    There was no Republican primary in Virginia. Youngkin was chosen by a convention.

    https://ballotpedia.org/Virginia_gubernatorial_election,_2021_(May_8_Republican_convention)

    Like

  3. And another one:

    “To Protect Fauci, The Washington Post is Preparing a Hit Piece on the Group Denouncing Gruesome Dog Experimentations

    For years, the White Coat Waste Project was heralded by The Post as what they are: an activist success story uniting right and left. But now its work imperils a liberal icon.

    Glenn Greenwald

    What is going on here is almost too self-evident to require elaboration. For years, The Post favorably covered the animal welfare work of this group without even remotely suggesting it had some nefarious ideological agenda, let alone investigating its finances. Only one thing has changed: their work in highlighting gruesome dog experimentations now has the possibility of undermining Dr. Fauci or harming his reputation, and thus The Post — acting like the pro-DNC liberal advocacy group that it is — set out to smear White Coat as right-wing MAGA activists in order to delegitimize and discredit their investigative work and, more importantly, give liberals a quick-and-easy way to dismiss their work as nothing more than an anti-science MAGA operation even though they are nothing of the sort.

    Even more disturbing was the telephone call which Goodman and the group’s founder, Anthony Bellotti, had on Monday with Reinhard and another Post reporter, Yasmeen Abutaleb, assigned to the health and COVID beat. During that call, Abutaleb in particular repeatedly demanded to know whether White Coat was concerned that the activism they were doing on these dog experimentation programs could end up harming Dr. Fauci’s reputation and thus make him less able to manage the COVID crisis. They even suggested that by encouraging people to call the NIH telephone lines to protest this experimentation, they might be making it difficult for people with questions about COVID to get through. The obvious premise of the entire conversation was one completely antithetical to the journalistic ethos: it is immoral to do anything that reflects negatively on Dr. Fauci now, no matter how true or warranted it might be, because his importance is too great to risk undermining him. (Request for comment from Reinhard was not responded to as of publication of this article, but will be added if supplied).

    In general, as this controversy has unfolded, media outlets have expressed almost no interest in the immorality and atrocities of these taxpayer-funded dog experimentations, and instead have acted as political activists with only one goal: protect Dr. Fauci. ”

    https://greenwald.substack.com/p/to-protect-fauci-the-washington-post

    Like

  4. Zillow is getting out of the home buying business.

    Apparently they lost money on houses in Phoenix. Phoenix home price appreciation has been running at 30%+

    How the hell does one lose money in that sort of market? You have to work hard to do that.

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  5. Good prediction thread for VA Governors race:

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  6. oh get bent.

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    • “Hard to accept”.

      Also no mention of what McAuliffe might have done to hand it to Youngkin on a silver platter.

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    • The left never realizes when it has overreached.

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    • Wake me when Fairfax county is all in and Youngkin is still the winner. 50% chance he’s lost it by Saturday morning.

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      • Think the left prepared a vanful of absentee ballots, or did they think this was a shoe-in?

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        • Eh, swinging the election can be tough. There is always hinky stuff but I’m betting most of the fraud in 2020 was lone Wolf action. Lone wolfs or tiny fifth columns have to be highly motivated. Maybe they’ll find a thousand ballots in a car trunk but … I think for the most part McCauliffe is on his own.

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      • Wake up. Fairfax is all in and Youngkin is up 52% to 47.3%

        Edit: It’s narrowing

        “Virginia Governor

        Glenn Youngkin (R) leads by 57,538 votes over Terry McAuliffe (D) with an estimated 94 percent of votes counted.

        Youngkin 1.6m 50.6%
        McAuliffe 1.5m 48.7%

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        • It ain’t over till the last trunk load of ballots is counted for Mcauliffe I guess .

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        • Still no concession. McAuliffe and Dems gearing up for their own “big lie”, perhaps? It would hardly be unprecedented.

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        • The New Jersey vote finding for Murphy is gonna be epic.

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        • We need to wake up and fight

          Because they’ve been so nice and accommodating thus far. These results are in no small part because you’ve been fighting. Look, nobody really likes the GOP or Republicans–you guys get them elected. They don’t get themselves elected. Because you “fight” and because of how you “fight”. And who.

          Protest at school boards to demand masks and vaccinations to keep our children and families safe from selfish science deniers

          That should work great. And when right wingers show up with equally emotional counter-arguments and, you know, maybe actual data about how kids don’t need manadatory vaccinations based on what we know, and how mask mandates have no proof of preventing the spread of COVID, gonna shout them down with they’ve got the numbers and cite the studies? That will definitely make you seem like the rational, trustworthy side of the debate.

          Protest at school boards to keep Republicans from pushing our teachers to teach the lie that racism doesn’t exist

          You may be able to gaslight some schoolboards with that nonsense. But the parents? No, probably not.

          Biden needs to shout about his economic miracle

          A: he kind of has, but B: it’s clearly not true, and also doesn’t comport with the general public’s “lived experience”.

          Americans are mostly vaccinated and safely back to work except in states like Florida and Texas where hypocrite (vaccinated) and incompetent governors have driven up the COVID death toll.

          None of this is true (in fact, these same people complained that Desantis was making a deal with Walgreens or something to increase vaccine and treatment access). Florida vaccination rates are fine. Deaths are not worse in Florida than anyplace else on average and people are at work in Florida in Texas because most of them never left work–and both states are attracting businesses and people from the “good” states. If they were so awful, that probably wouldn’t be happening.

          Republicans are bad at economics

          Yes, but clearly not as bad as the Democrats.

          Their worship of oligarchs has caused every major economic crisis over the past century (teapot dome, Great Depression, 70’s oil crisis, savings and loan, Bush 2 Great Recession, Trump’s incompetence-driven COVID economic crisis). Democrats have fixed the Republican damage every time. Investing bottom-up builds a stronger middle class and a robust economy.

          I don’t think anything cites can solely be laid at the feet of the right. The left does very little investing “bottom up”–and what it does do apparently creates employee shortages that help lead to inflation. And by what rational does the writer argue Democrats have fixed the Republican damage every time?

          BBB will invest in safe affordable child care to give everyone a chance to work and save for the future

          Given that it’s a framework with the details to be filled in later, that’s a lot of faith in the government just because the people doing it LARP at Utopian progressivism.

          It will invest in power solutions to bring more safe and efficient cars within reach for almost everyone and (more importantly) put home charging and home battery back-up technologies in our homes to protect us from unreliable power grids and peak-season price gouging by energy companies.

          Yes, because the government has such a great track record here. You know, the 70s oil crisis and the Great Depression and Teapot Dome weren’t announced government policies. Most of them came from people and government policies asserting they were doing good and fixing problems.

          Three pillars:

          Our children

          Energy security

          Jobs jobs jobs

          No Democrat should end any interview without mentioning all three

          And I’m sure they will. As mantras or touchpoints. What they want to is offering compelling arguments that they should be trusted with any of those things.

          However, those are all better than “everybody is a racist”.

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        • Love their Energy Security” mantra.

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        • I’ve gone down that rabbit hole, goddammit, Troll. I’m on there posting as Kinda Conservative. Being very cordial but I’m guessing I’ll get banned at some point. But still: rabbit hole. What a time suck the internet is.

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        • Lol!

          I’ve been banned as well. Took two days.

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        • Refusing to blame the Democrats is why this keeps happening. They get to constantly run had campaigns like McAuliffe without voter consequences because people always find someone else to stick the blame on. What happened to Truman’s “the buck stops here”?

          I disagree. White voters bear responsibility for their ignorant, racist votes

          ..yeah… the its not my fault because “Racism” is going to have us exactly in the same place or worse in in 5,10,20 years. The world has more variables than just “Racism”. We need to be more than a one horse show.

          Not all koskids are idiots, apparently.

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        • Of course they are going to say the election is stolen. And they won’t be hurting democracy when they do it. Because this time it’s true!

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        • Perhaps the SUV with fake Macaulliffe absentee ballots is stuck in Route 66 traffic.

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        • Kevin, you should watch Bill Maher’s latest episode from 10/29. He’s done with masks mandates and CRT.

          He says he now prefers going to red states to do his stand up shows because they are back to normal and blue states are completely miserable experiences for him.

          https://deadline.com/2021/10/bill-maher-real-time-hbo-sean-spicer-caitlin-flanagan-sen-ator-chris-coons-1234865249/

          This was his arguement on CRT too:

          “Maher said he was “for it” if authors such as Toni Morrison were taught but not if it meant changing how teachers treated children.

          “If that’s what critical race theory means,” Maher said. “If it means separating 5-year-olds by race and telling some, ‘You’re oppressors,’ and the others, ‘You’re the oppressed,’ and giving up on a colorblind society and resegregation and racism is the essence of America — then I’m out.”

          https://www.washingtonexaminer.com/news/bill-maher-critical-race-theory-5-year-olds-segregated-by-race

          When they lose Bill Maher…..

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    • The comments on Greg’s tweet are even funnier.

      Like

  7. Smartest thing the Virginia Republicans did was use a convention to pick the candidate this year rather than a primary. They intentionally picked the one most likely to win the general.

    https://ballotpedia.org/Virginia_gubernatorial_election,_2021_(May_8_Republican_convention)

    Like

  8. Taibbi on the election reporting from Loudon County.

    Like

  9. FWIW, it cost me $70 to fill up my GMC Acadia last week. and i’m not even driving that much anymore.
    i have to think that had more to do with the outcome than anything else.

    Like

    • There’s also this:

      McAuliffe perfectly feed into the Republican narrative, even into the closing days:

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  10. “But the one option that is both intellectually dishonest and electorally disastrous is to insist on a verbal trick unworthy of a middle-school debate team: to keep claiming that widespread concern over these ideas is misguided because the term by which they have publicly come to be known technically applies to an academic research program rather than the lessons that real children are being taught in real schools. And yet, this is precisely what McAuliffe and so many others attempted to do—with disastrous results—over the closing months of his campaign.”

    https://www.theatlantic.com/ideas/archive/2021/11/virginia-election-wakeup-call-democrats/620595/

    Liked by 1 person

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