Morning Report: Housing starts disappoint

Vital Statistics:

S&P futures4,440-29.2
Oil (WTI)91.35-2.23
10 year government bond yield 1.97%
30 year fixed rate mortgage 4.17%

Stocks are lower this morning on continued Ukraine fears. Bonds and MBS are flat.

The Fed released the minutes from the January FOMC meeting yesterday. The Fed will be taking it meeting by meeting, and did allow for the possibility that they might have to be more aggressive than the December dot plot indicated, which is a nod to the fact that the Fed Funds futures and the December dot plot have a pretty big difference between forecasts.

In their discussion of the outlook for monetary policy, many participants noted the influence on financial conditions of the Committee’s recent communications and viewed these communications as helpful in shifting private-sector expectations regarding the policy outlook into better alignment with the Committee’s assessment of appropriate policy. Participants continued to stress that maintaining flexibility to implement appropriate policy adjustments on the basis of risk-management considerations should be a guiding principle in conducting policy in the current highly uncertain environment. Most participants noted that, if inflation does not move down as they expect, it would be appropriate for the Committee to remove policy accommodation at a faster pace than they currently anticipate. Some participants commented on the risk that financial conditions might tighten unduly in response to a rapid removal of policy accommodation. A few participants remarked that this risk could be mitigated through clear and effective communication of the Committee’s assessments of the economic outlook, the risks around the outlook, and the appropriate path for monetary policy.

The Fed Funds futures moved ever-so-slightly less hawkish on the news, with the March futures now predicting a roughly 2/3 chance of a 25% hike and a 1/3 chance of a 50 basis point hike compared to roughly a toss-up the day before.

Bottom line, the Fed is looking at the Fed Funds futures and it realizes the market is much more hawkish than they were in December. They are still of the opinion the inflation will moderate as supply chain issues work themselves out, however they are ready to act as necessary if that turns out to not be the case. They are concerned that credit will tighten as they raise rates, but they hope that they can avoid this through clear communication.

Housing starts disappointed yet again, coming in at 1.64 million versus the 1.71 that was expected. Building Permits came in at 1.9 million, which was above expectations, so perhaps this will change in the future. Materials aka “sticks and bricks” remain expensive and that is undoubtedly affecting things. Lumber continues its upward trend:

One of the most precious commodities these days is apparently garage doors. “It used to take us 20 weeks to build a house,” said Adrian Foley, the president and C.E.O. of the Brookfield Properties development group, which develops thousands of single-family homes annually in North America. “And now it takes us 20 weeks to get a set of garage doors.”

Shortages of skilled labor are an issue as well. The US has a glut of humorless BAs, and not enough welders or electricians.

In other economic news, unemployment claim ticked up to 248k last week. This well above pre-pandemic levels, which were averaging around 220k. One data point doesn’t make a trend, but we might be seeing signs the labor market is cooling.

54 Responses

  1. This is really good:

    It’s about how “sensitivity readers” are corrupting literature. As they are becoming more common, and the goal of sensitivity readers is to review your work before publication to ensure it offends nobody, ever.

    [T]he other Readers seem to concur that the past should match an idealised present, in the same way that Anne of Green Gables, say, got a gay best friend when she went on Netflix.

    There are similar injunctions throughout the text. I am enjoined not to quote from My Ántonia by Willa Cather, as it is “an old novel”; nor to state that homosexuality has historically been taboo in Nepal, as homophobia comes from colonialism; nor to mention that the Taliban were terrorists. Extending the principle of sunny improvement into the present, Wordsearch List breaks out of their list to make the helpful suggestion that I should remove references to terrorism from across the book, as it “over-sensationalises such a heavy topic, especially with minors involved”.

    Whole thing is worth reading.


  2. Hi guys, I was just thinking about all of you and wondered who was still here and noticed I hadn’t seen anything from Mark looking back a week or so. I just wondered if he’s still around and posting?


    • Hey lms…Mark has not posted in almost two months. And it was a month between that and the previous time he was here. I assume he has lost interest.

      Hope you are well and enjoying life under Dem rule. Let’s go Brandon!


      • I hope he’s okay. I think I’ll email him to check in.

        To be honest Scott, nothing really changes anymore for me personally with whomever is in charge. In general they all make me kind of sick. I’m actually thinking of changing from Independent to Republican so I can vote in the primary for Larry Hogan……………he seems to have a tiny bit of integrity. You know I never cared for Biden but Trump was a big mistake.


        • Actually I don’t think I have his email anymore. Oh well maybe you’re right he just lost interest like I did.


        • Try


        • lms:

          You know I never cared for Biden but Trump was a big mistake.

          I wonder if anyone can identify a metric by which the nation is better off today than it was under Trump, and then tie that metric to something Biden or Trump did.


        • I think Trump was in many ways a “mistake”–or a not-good, less-than-ideal outcome. That being said, I voted for him over Biden and feel pretty much vindicated that Trump was a much better choice.

          I could also point to positives in Trump’s approach that are beyond anything most other politicians would accomplish. In some important ways he was a better president than Dubya or Obama or Clinton, in terms of actual positive outcomes (the mostly ignored Abraham according being one example). And in general the orientation of the Trump administration towards American productive capacity, not off-shoring all our jobs, holding China accountable for a little something–all a much better orientation, no matter how much better things could have been if he just stayed off Twitter.

          I think it’s pretty clear to me that we’d be better off right now with Trump, or a 3rd term of Obama, or even (ugh) Dubya. Would we be better off with a President HRC or President Kerry or some such? I don’t know.

          Would love to see a President Tulsi Gabbard but she’d have the same “destroy the outsider” problem that Trump had.

          I know we all have a bias towards current events (human nature) but I’m prone to think Biden is the worst president in my lifetime, at the very least. For all its flaws, the Carter administration was far more competent.


        • I feel like being an independent should let you vote in any primary you want. Although I think people should vote in whatever primary. Trying to queer the deal by voting for the “worst” candidate for the other side often backfires. Everyone thought Trump would be the worst candidate for the GOP and look how that turned out.


        • Also while things to change for me somewhat depending on who is in charge (really, more than they should–in an ideal government who the president was would be mostly irrelevant, IMO) and I would have preferred Trump to Biden, I ultimately think I share your dissatisfaction with the political class. A lot of the problem is structural I assume–the incentives in place make most of our representatives not great at, you know, governing competently and making things better for the country as a whole. Hard to change incentives over such a large government and country.

          Hope all is well with you!


    • Good to hear from you lmsinca. I think Mark was doing some traveling to make up for being locked down for so long due to COVID.


    • Hi Imsinca. Mark’s still kicking (and so am I). I gave up on political commenting when I took a new job. I’m a program director at the NSF now. I’ve thought about trying to start up a Bites and Pieces blog, though finding the time would be difficult. Hope you’re well.



      • Paul Lane is not ringing a bell with me… Did you previously have a different nom de plume on the Interwebz?


        • Hi Kevin – I still use my older one, though didn’t have the password with me. I am the one, the only, Fairlington Blade. I pop by occasionally, though avoid political commentary due to my new position.

          Thanks for approving my comment.




        • Fairlington Blade! Good to see you. 100% understand avoiding political commentary. Probably is a mentally healthy discipline even without a new position.

          Can you say anything about your new job, or what you’re doing? How is life? Hope all is well!

          Glad to see you, and understand why you bailed on us radical right wingers–probably the same reason I never look at comments on WaPo anymore, even though that’s where I met everybody here (past and present). But miss you and glad that you dropped by, even if you can’t say anything political or controversial (again, a wise stratagem that I should probably follow myself).

          Again, get why you can’t hang out and shoot-the-shitake, but would be interested in a life-update and a how-ya-doing in terms of non-controversial things.


          Again, glad to see you. Also . . . nah, I checked, there’s no way for me to reset the Fairlington Blade user password or change it’s email or anything. Oh well, I know you couldn’t use it anyway but thought it would make a nice meaningless gesture.

          Stay well! And an update would be appreciated, if you can.


  3. Good read:


    • His point about feminization and safety was spot-on. And if you go to a grocery store the women are almost 100% masked, and the unmasked are mainly dudes.

      And I do think the Democrats are already a woman-centric party. Which is why I think the patriarchy doesn’t exist.


    • They still think everything is about identity politics. Democrats project like no one else


      • Huge blind spot. The author doesn’t factor in how alienating the racial essentialism that even he is displaying turns off working class voters, even among black, Hispanic and Asians. But it doesn’t even occur to the offer constantly telling minority groups that the only important thing about them u is a their skin color might be why they’ve been losing voters across minority demographics.


    • Biden won by getting a higher turnout with millennials and young voters

      He doesn’t touch on the unlikelihood of Biden inspiring those folks to come out and vote in 2022 or 2024. Biden was a blank slate in 2016 to those voters. Who was going to wave his hands and make COVID and racial tensions and their college loan debt go away. None of that has happened and his obvious cognitive decline is not exciting, either. Even without Afghanistan and inflation and ongoing supply chain problems and terrible foreign policy those voters would be far more likely to stay home in 2022 and 2024.

      Democrats make a mistake ignoring class but it’s hardly their only problem.

      and winning with a bigger margin among suburban and college-educated women

      But he lost votes with white women generally, I believe. Or Trump gained there. I’ve read multiple places the only Demographic where Trump lost votes in 2020 was college educated white men.

      So Democrats still have the opportunity to become the one best hope of America’s working families

      Dude is just wishcasting. There is zero chance the Democrats are going to do anything other than cater to blue Checkmark Twitter. Also it’s not just what you say but how you govern and the current state of the country. The Democrats don’t fare well in that analysis with the working class.

      That higher margin for Democrats was made possible by an impressive consolidation of support from Blacks, Hispanics, and Asian Americans, even though 24 percent of Blacks and 46 percent of Hispanics continued to choose Trump’s “America First” message over what we called the Democrats’ “American Dream” message.

      This “in a vacuum” polling is close to worthless in my opinion. The question is, how does their “American dream” message fare while the Democrats are still the party of racial essentialism and energy dependence and open-ish borders? How do more conservative messages play while the policy is still globalist and elite-centered? That message won’t do shit for Asians if they simultaneously remain the party of abandoning school admissions standards.

      Going into 2022, I think a lot of the mistakes have already been made on won’t be fixed with insincere messaging.

      Finally, the author has a huge blind spot that is common on the left. Everything that isn’t in lockstep agreement with them and their policies is racist, even in this article. It’s a version of Clinton’s “deplorables” statement that says if you aren’t 100% with us or of you liked anything Trump did, you are an awful racist. It’s gotten so severe it’s alienating Hispanics and blacks at the margins yet the author never touches on the potential negative impact of racial essentialism—how his own message about how everything Trump did was racist, how voters voted for him based on racism—is becoming a negative to a lot of voters.

      Making everything about racism may be a positive for the hardcore left but a lot of Democrats and independents just ignore it like many center-right folks ignored Trump’s many flaws. But eventually those flaws will become to big to ignore if everybody on your political side is blind to the fact they are actually flaws.

      Liked by 1 person

      • The problem democrats have is that many of their “pro-worker” policies are “anti-employer.” And people tend to react harshly when they think you are fucking with their livelihood.


        • Is there a place for white men in the Democratic Party? Still a pretty large cohort.


        • The funny thing is that democrats will kick us out and then demagogue about the republicans being sexist.


        • Outside of things like universal healthcare, what can we realistically call a pro-worker policy from the perspective of even a center-left worker? College debt forgiveness is for elites and knowledge workers and academics. Build back better was just everything and the kitchen sink. Voting reform was another Incumbent Protection Act—or Ruling Class Protection Act, like CFR. And the Green New Deal stuff is for the upper class and elites.

          Some like Warren propose punishing the 1% but even she rarely covers things that would appear as actual benefits to working-class folks.

          And when they do have something, in theory, it sounds like they are trying to find a perpetual underclass and don’t remotely support anything like upward mobility. It’s almost like they don’t want the peasants competing with them for resources.


        • TL;DR—I’m saying what the Democrats call “pro-worker” policies are just what they want with a “and it’s what you really want, it will be good for you, we’re experts. So trust us.”


        • Good point, it’s so often why they end up wondering why people “vote against their own interest” or write books asking What’s the Matter with Kansas.


        • Thomas Franks, who wrote What’s The Matter With Kansas—which was, IMO, patronizing and way-too-flattering to Democrats and was basically full of “why can’t they understand they should live their lives they way we want them to, they must be stupid” … Franks has been out there complaining that the Democrats have gone way too far to the the left and are completely detached from the concerns of average people. So even he seems to get it now.


        • Their constituency is white suburban women now, so their not moving towards the center anytime soon.


        • Their constituency is blue Checkmark Twitter. The overlap with white suburban women is there but they pander to that Twitter demo more than anything else.


      • “Biden was a blank slate in 2016 to those voters.”

        Biden was Not Trump to those voters. That was their driver in 2016.


    • The left honestly believes only they are permitted to protest


    • Not novel. Everybody on the left was all giddy about appropriating a billion dollars for the Capitol police to make them a national enforcement arm of the left.

      As long as the police exist to enforce their ideology by any means necessary—and only that—they are 100% Back the Blue.


  4. So my question is why is the IRS giving Warren access to the returns of private individuals, and isn’t it illegal to disclose those returns publicly?


  5. “It used to take us 20 weeks to build a house,” said Adrian Foley, the president and C.E.O. of the Brookfield Properties development group, which develops thousands of single-family homes annually in North America. “And now it takes us 20 weeks to get a set of garage doors.”

    Holy hell. Is housing every going to get straightened out in this country, Brent?

    That’s crazy. “Fortunately” for me, I just refinanced, so I’m now years away from being able to move because I took out a lot of cash to pay down revolving credit. Which is a GREAT financial strategy. I’m so smart.

    Commented on some of your comments over at I Might Be Wrong. I like that guy.


  6. Never trust the government:


  7. Slightly dated, but still worth reading:


  8. Today’s entry in the ‘more woker than thou” contest:

    “It’s Time To Cancel Presidents Day

    By elevating myth over reality, the holiday does a disservice to history.
    By John F. Harris
    02/21/2022 06:00 AM EST”


  9. Great Glen Greenwald video


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