Morning Report: Fed week

Vital Statistics:

  Last Change
S&P futures 4,708 4.2
Oil (WTI) 71.48 -0.18
10 year government bond yield   1.46%
30 year fixed rate mortgage   3.33%

Stocks are higher as we head into the December FOMC meeting. Bonds and MBS are up.


The FOMC meeting is scheduled for Tuesday and Wednesday. The Street is looking for no changes in the Fed Funds rate, however the expectation is that the Fed will reduce its purchases of Treasuries and MBS at an accelerated rate. The Bank of England and the European Central Bank will all meet this week as well. Bond yields have been correlating pretty tightly globally, so it pays to watch what happens to yields overseas.


The Atlanta Fed’s GDP Now estimate is heading higher again. The current modeling has Q4 GDP coming in at 8.7%. Note that this is being driven by inventory build. With higher inflation in place, there will be more noise in the GDP numbers in general. Note the Street is less optimistic than the Atlanta Fed.


Aside from the FOMC meeting, we will also get retail sales and housing starts this week. Retail Sales will carry added weight given that it will be a good read on the holiday shopping season.’s CEO is taking leave effective immediately, as the mass firing over Zoom didn’t go over the way he had hoped. Better did raise capital at the same time, and I wonder if the investors demanded he do a layoff as a condition of financing. My guess is that they wanted the layoffs and severance payments to hit this year for tax reasons, which would explain why he didn’t do it early next year.



23 Responses

  1. “Where I Live, No One Cares About COVID

    Outside the world inhabited by the professional classes in a handful of major metropolitan areas, many Americans are leading their lives as if COVID is over.

    By Matthew Walther”


    • Reminds me of something I wrote a while ago:

      An Open Letter to Progressive America:

      The recent re-mask mandates say a lot about the current culture.

      The issue of requiring vaccinated people to wear a mask indoors is falling predictably along partisan lines. In most of America, masks went away once you got vaccinated and they haven’t returned. Yet in the bluest cities in the bluest states you have seen a requirement for vaccinated people to mask up indoors.

      Since presumably everyone is following the same science you would think the rules would be the same across the country. Yes, the CDC wants you to wear a mask, but ultimately these things are handled at the state and local level. Most states aren’t doing it – only a few reliably blue ones are. And even then the mandates don’t cover the whole state. Heck, if you look at New York state, the mandate doesn’t extend much past Westchester County. You go to a Stewarts another 50 miles north, nobody is masking up. And it isn’t just New York City. I am sure the difference in masking is markedly different between Roanoke and Reston.

      It really is a deep Blue phenomenon. The rest of the country isn’t doing it. So why are we? Two possibilities:

      1. We are doing it because the Delta variant demands it.

      OK, if this is correct, then we should be be able to detect a statistically significant improvement in outcomes. It is a testable hypothesis and the mandates started in mid-August. We’ll know soon enough whether “Eat your vegetables” America is getting provably better results. I suspect they aren’t..

      2. We are doing it because we want to show we care.

      I think this is what is driving it. It is a tribal thing, sort of a badge of honor amongst BoBos in Paradise. And if #1 is correct you will be completely vindicated.

      But if the issue really is reason #2, then VaxMask isn’t anything more than a cultural flex for people with a “In this house we believe” sign in their front yard. And yes, those are the folks who care deeply, get involved and disproportionately control the administrative state. But the activist class isn’t remotely representative of America. They aren’t even a majority in their own ZIP codes. They are the vegans who demand everyone at the barbecue eat tofu.

      So, my message to Progressive America is this: Give it a rest. I’m sure you mean well, but stop. We saw this movie around 100 years ago: The Era of Dour Wilsonian Progressivism during the early 20th century. They may have brought us women’s suffrage but they also gave us Prohibition.

      Note that Dour Wilsonian Progressivism didn’t last forever. Eventually the people got tired of being scolded, and we got the Roaring 20s.


      • The KosKidz take is predictable,

        This comment is fascinating:

        Dec 13, 2021 at 02:13:20 PM
        All I see from the right are things like “vaccine mandates we’re supposed to return is to normal, so why are cases and deaths rising?” Things like that.

        They insist that it’s about control and it will keep going as long as we comply, citing our do-called blind obedience is the reason why it’s still going on. How would one counter something like that. I thought as a country we’d be better “team players,” yet all I see is vaccine conspiracy theories and a false equivalence without any regard to the severity of sickness in statements like “you can catch and transmit the virus even when vaccinated, so why bother.”

        It’s like riding on brakes that are in need of replacement but you are able to make it to the shop for brake replacement vs. no brakes at all. In the interim of brakes are in bad enough shape before you get to the shop something bad COULD happen, but if you willingly remove your brakes and then drive something tragic WILL happen.

        And all I hear is how supposedly “dangerous “ the vaccine is supposed to be while they quote the survival rate (which after the 98 or 99 in their “percentage,” the decimal is always changing- meaning that’s a story they can’t keep straight).

        Another thing is when you try to talk logic and use these types of analogies they accuse you of “firing salvos intended to destroy them while shielding a wall around yourself failing to listen to or take on board the other side.


        • Why do I feel like if Trump had been re-elected the entire thing would have been blaming it on Trump, with no other changes in data?

          The comment seems like about what I would expect. Maybe a little more awareness and accuracy regarding right wing positions than I would imagine, with the positions stated in a way that suggests they are inaccurate without providing any data to substantiate that.

          The final complaint is about who he’s talking to. That certainly wouldn’t be my response to the analogy. I’d respond with an analogy about how you don’t want to get brakes in your car that actually aren’t “brakes” but technically millions of tiny steering wheels, and without really any announcement or an explanation all the definitions of the word break were changed to include “millions of tiny steering wheels” as also defintionally a “brakes”. To replace the old brakes you’ve always have had that seem likely to work pretty well any time you need to stop.


      • We have more data to suggest #1 is not correct–masks, at least as implemented, have had zero impact on the spread of COVID. Weather seems to have a bigger impact, as when it gets cold, and where it gets cold, tends to get more COVID cases. A situation not really fixable except by methods that would also kill the economy–which would have a worse health impact than COVID, ultimately. But in terms of data–that is, “following the science” masks seems statistically irrelevant to COVID spread. I’m sure hazmat suits might have a real impact but clearly we’re not going that direction.

        I think in the US, at any rate, the exhaustion with blue America’s perpetual scolding around COVID and everything else will be clear. Also clear: the country tolerates a lot when the economy is doing reasonably well. Chances are that, without COVID, it would have invited Trump back for a 2nd term no matter what the media was saying about him.

        You add CRT and COVID nonsense (and the economic constraints added “because of COVID”) and crazy spending on things most people don’t care that much about . . . I feel like while woke progressivism may continue for a while, the era of Dour Bidenism might come as early as 2022.

        But again–I think Americans generally will put up with a lot. To some extent, even mask mandates and vaccine mandates if that’s all there is to it. However, when it ends of up in significant shortages of healthcare workers and transportation workers and even IT guys and semiconductor engineers (and on and on, the areas where they couldn’t afford to lose anyone instead losing lots of people because of vax mandates specifically) that ramps up inflation while causing shortages and this goes on and on . . . and then you basically tell the electorate, “It’s not that bad, you people are spoiled, criticism of Democrats is dangerous for the country so shut up!”

        I think they are headed for a serious drubbing in 2022. I expect they will lose the house and the senate as well as some governorships and state legislatures and mayoralties. There was a trend in that direction in 2020, where despite Trump’s loss, Democrats lost seats in the house–and Republicans had a net gain of one state legislature and one governorship. This was before the following year of COVID, broken promises (you’ll celebrate July 4th), CRT, slavish sycophancy of the media to the point it has to be painfully obvious to anyone right of AOC, and a bubbling up of woke culture that’s likely woken up people who used to scoff at the idea the country and culture generally was moving too far left.

        Also, the polls–which predicted huge victories for Democrats in the house, senate, governorships, state legislatures and so on in 2020–look bad for the Democrats. I don’t think they’ve adjusted anything that I’m aware of, so it seems likely to me that these polls are understating what bad shape the Democrats are in.

        As Joe Biden won by doing nothing except not being Trump, I think a whole shitload of Republicans are going to win in 2022 and possible 2024, primarily by doing very little except pointing out that they are not Democrats.


    • It’s quickly turning to climate change, and the increased stridence and misinformation tends to make people just say: “What the hell are they talking about?”

      People who know–as is so often the case with the news–know what is being reported is wrong. Hospitals being overwhelmed with COVID cases are being overwhelmed because they are understaffed, with vax mandates playing a role in that (along with other things). Not because COVID is running wild and we’re all going to die so be terrified, which is apparently the message the public is supposed to take from the natterings of the expert class.

      They are trying hard. But Omnicrom seems to basically be a common cold–and will likely replace Delta as the most common variant in a few months. Then they will be stuck trying to characterize a common cold as a Death Plague–they are already laying the groundwork for this with Omnicrom. But again, good luck to them. Most everybody else is going to be living their lives with COVID in the rearview mirror.


      • New York now requires the vaccinated to wear masks indoors.

        Why are progressives like this?


        • Because they are afraid of breakthrough cases. Only there’s no data to support that masks will be helpful here so it’s completely about the feels. They feel masks should help so everybody should wear them. Actual data makes no difference.

          This comports with nanny-state-ism. Also comports with the sort of disaster-thinking common on the left. And regards individual rights that aren’t temporarily granted by the state as bad. Eh, I get it.

          Cult membership often involves shared clothing and rituals so there’s that, too.


        • Maybe I can get my HAIRSHIRT mask now.

          that said, i will probably just not wear one.


  2. Worth noting:

    In its latest legal battle with TV journalist John Stossel over a post about the origins of the deadly 2020 California forest fires, Facebook, now rebranded and referred to as “Meta,” claims that its “fact-checking” program should not be the target of a defamation suit because its attempts to regulate content are done by third-party organizations who are entitled to their “opinion.”

    Stossel’s original complaint questioned whether “Facebook and its vendors defame a user who posts factually accurate content, when they publicly announce that the content failed a ‘fact-check’ and is ‘partly false,’ and by attributing to the user a false claim that he never made?” Facebook, however, claimed that the counter article authored by Climate Feedback is not necessarily the tech giant’s responsibility.


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