Morning Report: Sprout Mortgage is shutting down

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30 year fixed rate mortgage 5.69%

Stocks are higher this morning on no real news. Bonds and MBS are down.

The FOMC minutes were released yesterday at noon. The takeaway is that the Fed is worried most about inflationary expectations becoming entrenched in the economy and is willing to cause a recession to defeat inflation. The time period between the May and June meeting had two big data points: the consumer price index which showed headline inflation at 8.7% and the University of Michigan Consumer Sentiment Index which showed inflationary expectations rising.

Inflationary expectations are critical because they have a self-fulfilling aspect to them. Vendors begin to build them into contracts, employees (especially those that are represented by collective bargaining) negotiate raises into contracts, and consumers / businesses begin to hoard materials in anticipation of future price increases.

The Fed has two vehicles to measure inflationary expectations. The first is consumer sentiment surveys like the University of Michigan and the second is the differential between Treasury Inflation Protected Securities (TIPS) and Treasuries. These market-based measures of inflation so far are still behaving, which gives the Fed some comfort. That said, the University of Michigan report along with the super-tight labor market gives the Fed the leeway to act aggressively. The self-reinforcing aspect of inflationary expectations means that the cost of bringing down inflation now (in terms of growth) are much lower than it will be when these expectations become entrenched. Don’t forget the 1981-1982 recession was the worst since the Great Depression and the Fed took up the Fed Funds rate into the mid-teens to defeat inflation. This is what the Fed is trying to avoid.

In terms of rate hikes, the view that 75 basis points was necessary was almost unanimous, with one participant wanting to hike 50 at this meeting and then 75 in July.

Sprout Mortgage is shutting down, the latest casualty in the mortgage business. So far, the company hasn’t publicly commented, but this was apparently announced on a conference call. There is no word on what Sprout will do with loans in the pipeline and the company isn’t responding to media requests for comment. Separately, Wells announced more layoffs. It will be interesting to hear from the banks next week when they announce earnings. Wells had telegraphed that origination income will be down 50% compared to Q1.

In other economic data, initial jobless claims rose to 235k last week. Meanwhile, outplacement firm Challenger Gray and Christmas reported that announced job cuts rose to 32,517 from 20,712 during the same month last year. The automotive sector bore the brunt of most of the changes, as shortages and high prices are depressing business. Health care / products is also laying off workers as the COVID-19 pandemic hiring spree reverses.

So far the labor market remains tight, but cracks are beginning to show in the foundation. I keep saying this, but it bears repeating: the rate hikes from earlier this year won’t begin to impact the economy until late this year.

Finally, there is no ADP report this month as they are retooling their methodology. There has been too much of a difference between the ADP report and the BLS’s Employment Situation Report so they are reworking their models.

53 Responses

  1. Sigh. Here we go again.

    “Under the latest proposal, people earning more than $400,000 a year and couples making more than $500,000 would have to pay a 3.8% tax on their earnings from tax-advantaged businesses called pass throughs.”

    https://apnews.com/article/health-medicare-joe-manchin-congress-6ab089d3e7acb7ecf675d55c5468168f

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  2. This is a new level in the old “hardest hit” game.

    “Unemployment low, plenty of job openings. Women hardest hit.”

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    • “Why can’t I work 30 hours a week and still make partner? “

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    • “women perform most caregiving in America, according to the Labor Department.”

      I think this is a combination of preference and bullshit. Anecdotally I know plenty of women who get more cared for than give care, but still woe-is-me it while also putting their personal preferences and hobbies into the category of “care giving”. Shopping for new throw pillows? Caregiving! Living vicariously through their daughter’s pageant competitions? Caregiving!

      Like the concept of how women do “all the emotional work” in a relationship a lot of that is self-reporting that mixes narcissism with gaslighting.

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    • I love how the feminist left thinks that there is no emotional labor involved in being the primary breadwinner.

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      • I’ve heard extended arguments regarding how women do all the emotional labor in their relationships, and ultimately it’s about turning neutral-to-negative behaviors into virtues.

        So you’ve had a bad event in your family or at work, as a dude. You’ve processed it some. Maybe you need to sit on it. Maybe you need to make yourself feel better by bearing it stoically and gettin on with life.

        She won’t leave you alone about it. She keeps making you talk about it. Keeps telling you there’s something wrong with you because you aren’t talking about it. Maybe calls family members to talk about it by proxy. Keeps poking and prying. This is the “hard emotional labor” they are doing, because you won’t do it.

        You have so many deficiencies. SO MANY FLAWS. Her insight lets her see how some of your flaws come from your relationship with your mother, other flaws come from your distant father. Still more are just because you were born a man. She wants to have long discussions where she informs you of how flawed you are, and how she has figured out where those flaws came from and has also discovered other flaws you aren’t even aware of. She works hard to inform you of all these flaws, even though you resist her help.

        Once again, she’s left doing all the emotional labor of the relationship.

        She’s gossiping about her coworkers, complaining about her boss or her mother or her siblings, complaining about the kids, and you just grunt to show your listening. AGAIN SHE’S DOING ALL THE EMOTIONAL LABOR. WHY ARE YOU SUCH A LAZY SOB (now you’re making her do even MORE emotional labor by helpfully pointing out what a son-of-a-bitch you are).

        In my opinion, the common use of the term “emotional labor” is a way to describe a sort of self-centered narcissism as if it was a virtue. But it’s not.

        And while I think there is such a thing as “emotional labor” it is, by definition, an individual experience. You do your emotional labor. I do my emotional labor. You cannot feel my emotions for me. I cannot feel yours for you. There is no such thing as someone doing “all the emotional labor” of a relationship–you cannot do someone else’s emotional labor. Any more than you can think their thoughts.

        And sometimes “I’m doing all the emotional labor” means they have shitty personal boundaries or are easily taken advantage of or are remaining in a bad situation because they think they can change him. But they still aren’t actually doing the emotional labor of the relationship.

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        • The thing is, women don’t really want to hear your problems. They really don’t.

          Men bear the financial pressure of the family. We just do. But since we don’t talk about, it must not exist.

          I would also posit that a lot of this “emotional labor” is really nothing more than competitive momming versus the moms in their circle.

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        • “The thing is, women don’t really want to hear your problems. They really don’t.”

          They do not. And I don’t blame them; I don’t want to hear my problems, either.

          “Men bear the financial pressure of the family. We just do. But since we don’t talk about, it must not exist”

          Also, God forbid you actually talk about it. I’ve noticed the women’s problems tend to be created solely by the people around them. YOUR problems are all things you’ve done wrong. If you’re feeling pressure, why aren’t you making more money? She should have married someone who makes more money. HER MOTHER WARNED HER.

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        • I would also posit that a lot of this “emotional labor” is really nothing more than competitive momming versus the moms in their circle.

          I tend to agree with this and add that women consider “worrying about things” as Emotional Labor.

          Kevin, I agree with everything you’ve written re women but I’m not sure that women even consider that Emotional Labor as much as just being a broad.

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        • I should clarify the women making the emotional labor argument tend to be ideologically to the left. Women not so leftwardly aligned are content to acknowledge men and women are different with positive and negatives to those differences, and not spend a lot of time bemoaning their victim status, suggesting it’s their husband or significant other who forces them to be over-emotional by not doing their share of the emotional labor.

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        • Not to be an asshole here but it’s not just progressive women who bitch about how outside forces are working against them, it’s all women.

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        • Yes, I know. But it tends to be the more leftwards ladies that recast that as “emotional labor” or accuse you of being an avatar of the patriarchy rather than just saying you’re an asshole.

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        • KW:

          I’ve heard extended arguments regarding how women do all the emotional labor in their relationships…

          Funny, though, that we never hear arguments about how the men do all of the reasoning labor in relationships, and how women should do more of it. The double standard when it comes to sexist bigotry is amazing.

          Perhaps we should acknowledge that a division of labor system is the most efficient, where those who are good at emoting should do the emotional labor, and those that are good at reasoning should do the rational labor.

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        • “all of the reasoning labor in relationships”

          I would argue that is because the need to demand attention and share a padded inventory of all the hard work you do and demand validation and recognition—the desire for every exertion and effort to be “seen”—-is inherently an emotional desire.

          And your most emotional men that feel the need to perform their feelings in public are in the left. And they would never dare suggest that (a) men are more reasonable than women, or (b) that reasoning has any value and is worth mentioning. Certainly not something to be proud of!

          Reasonable people are not constantly looking for new ways to say things are unfair or to articulate new ways they are victimized.

          I don’t object to the division of labor, re: emotional labor. But I also wouldn’t characterize emotional labor as some positive necessary when it is often just using time and energy to create new problems rather than improve things.

          It’s kind of like a dude buying a hobby car and working on it all the time and spending all sorts of money on his hobby and saying “I’m doing all this mechanical labor” and expecting his spouse to be grateful he spends all weekend tinkering on a muscle car.

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        • Wow, you guys really don’t like women do you? I’ve suspected as much for a long time now but this conversation really takes the cake. tI would be interesting to see how many double income families exist on the left vs the right in ideology. The generalities seem to know very few limits here.

          I wish some of you could actually meet the working women my daughters and I know All educated, all working, all but two have children out of the hundreds I have contact with. Most of them pumped their breasts at work hiding in a little room or locking their office doors so they could go to work and still nurse their babies. Most had a 6 week to 3 month reprieve from work for child birth and bonding and then boom, right back in the mix! They don’t complain but they do enjoy the occasional “girls only happy hour” away from such judgemental men. And weirdly enough they’re all liberal with the exception of maybe a few of them who are more middle of the road.

          You guys need to get out more!

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        • I thought we were talking about what broads say to and/or think about their husbands?

          I generally respect the broads I work with and for but their not married to me. I am fascinated at how freely they emasculate their husband outside of his presence but within mine. Especially if they have kids.

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        • And for the record I’ve never made a secret over my lack or respect for broads.

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        • lms:

          Wow, you guys really don’t like women do you?

          I love women!

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        • lms:

          They don’t complain but they do enjoy the occasional “girls only happy hour” away from such judgemental men.

          Serious question: do you genuinely think that men are more “judgemental” than women?

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        • Educated progressive women are the most worshipped demographic on the planet. Everyone from Hollywood, Madison Avenue, the education complex and the Democrats kisses their ass and strokes their egos.

          That is why they feel like anything that deviates from complete fealty to the feminist narrative is misogyny. The female POV is automatically assumed to be right and correct.

          I also think the statement about “judgmental men” is utter horseshit. Men don’t judge women – we barely even think about them. Women judge other women. They are the ones who set the social and societal standards.

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        • I miss being able to tell off-color jokes in the office.

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        • McWing

          And for the record I’ve never made a secret over my lack or respect for broads.

          Okay good to know. I thought we had a better understanding but I guess not. Tried and failed here.

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        • Scott

          I love women

          I think you love the women in your life but I doubt you love women in general. I’m not seeing a lot of love for women in this thread! I do love men though, and even though I’m in charge here of our life, fortune, and future I still respect Walter. We’ve been a great team and raised 3 awesome kids (all liberal for the most part) and making huge contributions to society. My kids believe in women’s right to control their own choices, they believe in the common good, and guns are foreign to all of them except my granddauther who is a sheriff in WY.

          We care here about others including BROADS, whatever that means!

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        • lms:

          I think you love the women in your life but I doubt you love women in general.

          Well, I value all people as individuals, not as members of groups defined by characteristics they possess by mere chance. But I would certainly hate to live in a world without women.

          We care here about others including BROADS

          Us too!

          Speaking of women, here’s a question for you…what is a woman?

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        • LOL Brent!

          Educated progressive women are the most worshipped demographic on the planet. Everyone from Hollywood, Madison Avenue, the education complex and the Democrats kisses their ass and strokes their egos.

          First of all not all educated women are progressive or expect their egos to be stroked. Most of them are just trying to survive working full time, dealing with child care, keeping their husbands happy on date night and have very little time to worry about politics. Some of them, like my daughter, work in a male dominated industry and still excel, even at less recognition and pay. It doesn’t matter because they’re doing what they love and still being moms and wives.

          They might want to be respected but I doubt they expect anyone to kiss their asses or stroke their ego.

          Like I said before………………you guys need to meet other women, work with other women, or maybe just give them a chance……………………how weird would that be?

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        • lms:

          First of all not all educated women are progressive…

          I’m pretty sure those are not the ones Brent was talking about. He explicitly said “educated progressive women”, so I doubt he meant “educated women who are not progressives”.

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        • My industry, pharmaceutical sales, is majority women. My current manager is a woman. The industry has been dominated by women for 20 years. I don’t have any more problems with the chicks I work with than I do with the dudes. What I wrote was that the women I work with consistently emasculate the men they purport to love. It’s weird.

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        • I think that’s what is called shit-testing. They are compelled to emasculate men as a test—can you be emasculated? If so you fail the test. Then you are dismissed or get to be a valet to the Queen but you won’t be treated as a man.

          Which was okay when the culture wasn’t encouraging emasculation and characterizing all masculinity as a negative. When the culture wasn’t all leaning in the direction of eradicating masculinity, that women would attempt to emasculate men was fine because an adult man wouldn’t allow it. But now resisting a woman in the process of emasculating you is a much trickier business.

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        • “you guys need to meet other women, work with other women”

          I expect we all have and do know other women (like you!) but in the context of the “emotional labor” gambit we were talking about women who specifically use the emotional labor argument to elevate themselves while minimizing or denigrating men. Which is not all women. Many women are the exact opposite of that.

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        • Scott

          Serious question: do you genuinely think that men are more “judgemental” than women?

          I don’t think I said men were more judgemental, but from the attitudes in this thread I kind of feel like women are being judged and found lacking. If I’m wrong please correct me. As far as I know, in life and marriage, and even in society itself……….it takes all of us to make it work.

          Women give birth to the next generation and while it’s not everything……………..I do think it’s something! There’s a responsibility there that men, even though they try (bless their hearts) don’t quite get!

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        • lms:

          I don’t think I said men were more judgemental, but from the attitudes in this thread I kind of feel like women are being judged and found lacking.

          Well, recall that the comments were prompted by the judgement that men are lacking, specifically in the area of “emotional labor”.

          But let me ask you this: Presuming you (unlike most progressives) can actually define what a man/woman is, do you think women and men are exactly the same in all respects, or do you think there are certain characteristics that are more prevalent in one or the other?

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        • lms:

          Women give birth to the next generation…

          Well, those that don’t kill the next generation in utero do, anyway.

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        • lms:

          They might want to be respected but I doubt they expect anyone to kiss their asses or stroke their ego.

          Who conducts letter writing / social media campaigns regarding the representation of sex / gender in media?

          Women or men?

          I was cracking up recently on ads for Stihl chainsaws. I would wager that arborists are probably 99% guys. But the Stihl ads were all some chick. Women have absolutely nothing to complain about culturally. Yet they still do.

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        • Clearly they have something to complain about. As the culture transforms and traditional roles are dispensed with, women’s self-reported levels of happiness and satisfaction have collapsed.

          Which apparently is predictable—the more options and choices people have the less happy they tend to make us. Which might have something to do with why progressives are so hell-bent on creating new puritanical rules to limit and constrain choices … unfortunately these new rules and limitations don’t seem to produce satisfaction and fulfillment the way the old ones did.

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  3. We have a new enemy, Big Weiner.

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    • $827MM on $13.1B in sales. 6.3% profit margin. The left is so economically illiterate it isn’t even funny.

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      • The real monetary value of that profit depreciating every day thanks to inflation!

        But no they have no understanding that a giant business running at something like a 3% profit margin would be one bad exogenous event from bankruptcy.

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      • It’s less about economic illiteracy than it is about being dishonest in their arguments.

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        • I listened to these same style dipshits rag about Halliburton’s 3% profit margin during the Gulf War.

          They are morons who simply don’t understand the concept of revenues and costs, or worse risk and reward.

          They are idiots who think if they smash capitalism they will get a living wage to write poetry.

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        • “living wage to write poetry” — precisely. These outrageous corporate profits and everything produced by Western capitalism is the only thing that makes it possible for them now to earn a living wage and have time to complain about everything all the time. If they were trying to survive making a subsistence living off their little plot of land in the back yard of their mud hut they wouldn’t have time to share their brilliant political insights on Twitter, or write poetry, or do anything but worry about food, access to clean water, and how to avoid getting sick or injured because there are no medicines and no healthcare because those things sprung from the evils of the profit motive.

          If you point that out, arguments are made about the NHS or medical discoveries that sprung from university research and its like: how do they pay for the NHS? How was the university research funded and how was the university founded in the first place? Some rich people or corporations funded the research. Some rich robber baron made the endowment for the university.

          You don’t get to live the easy life you live if you take away all incentives for action and innovation and production from everybody else. The entire world is never going to be motivated to find ways to feed you and house you and clothe you just because you are SUPER passionate about writing your erotic poetry.

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        • There is that but I think it’s also often economic illiteracy–and the fact that they are economically illiterate because they do not care. Facts, data, how things actually work doesn’t matter so what does it matter if they are economically illiterate? They are virtuous, and so are morally literate. Which is all that should matter to a True Believer.

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        • They are virtuous, and so are morally literate.

          Capitalism is about risk and reward. Most of these idiots still live in their mother’s basement or are in college. Or took a sinecure with the government.

          They have never taken a single risk in their lives. It is alien to them. Which is why they don’t get it.

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  4. I’m pretty sure those are not the ones Brent was talking about. He explicitly said “educated progressive women”, so I doubt he meant “educated women who are not progressives”

    Honestly, do we even know what progressive means anymore. If you support abortions rights, is that progressive or liberal or normal……………..All of the women I know support body autonomy…….If that’s progressive then yep they are progressive and educated and working and supporting other women.

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    • lms:

      Honestly, do we even know what progressive means anymore

      I do. One easy sign is a person who is unable/unwilling to define the term “woman”, despite using it all the time. Can you define what a woman is?

      If you support abortions rights, is that progressive or liberal or normal

      I would say that all progressives support legal abortion, but not all legal abortion advocates are progressives.

      All of the women I know support body autonomy…

      So you don’t know any women who were in favor of mask and vaccine mandates? I doubt that. If I remember correctly, you were strongly in favor of mask mandates!

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      • Scott

        Woman,,,,,,,,,,,,,,an adult female human being……….what’s your point?

        All the women I know wore masks because it was in the best interest of others. As are vaccines……….mandate or not, we would have done the right thing for our families and others and we’re still doing it without mandates.

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        • lms:

          an adult female human being……….what’s your point?

          Congrats…You’re not a progressive! So you shouldn’t take it personally when someone says something about progressive women.

          All the women I know wore masks because it was in the best interest of others. As are vaccines…

          Perhaps, but beside the point. If they supported mandates, as you did, then they obviously don’t support “body autonomy”, despite your claim.

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        • I’m not 100% on the efficacy of the COVID “vaccines”—even so I got the J&J and recently did the booster (ahead of going in the cruise). Also guided the oldest to the J&J (for the cruise) but the youngest got the Pfizer which is the one I’m most skeptical about in terms of cost/benefit, there being limited data and no mass data for the potential downsides to mRNA solutions (which are more accurately characterized as gene therapy than vaccination, IMO). Although I do think mRNA will eventually provide cures or “vaccines” for all sorts of things, that technology is in its infancy and generally I would prefer to let other people be experimented on. 😉

          Mask efficacy regarding COVID is another matter. The data we have indicates they are not effective and preventing the spread of COVID—intuitively you think they would be but ultimately the spread didn’t seem seriously impacted. Vaccines (even the gene therapy ones) much better as a preventative.

          Though I still don’t agree with broad vaccine mandates outside of special cases (expectations of broad exposure in dangerous environments, hospitals or nursing homes). And would prefer the government not mandate them at all because in the bureaucracy even the experts are idiots. Perhaps especially the experts. 😅

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    • I’m pretty sure those are not the ones Brent was talking about. He explicitly said “educated progressive women”, so I doubt he meant “educated women who are not progressives”

      lulu:

      There are women who you meet on an individual basis, and there is Women, which is an ideology. I am referring to Women (capitalized).

      I think about this a lot: most college graduates are women, and women generally prefer a guy that makes more than them. women will become more and more frustrated with the limited number of guys who “qualify.” Most guys will be ignored.

      But here is the thing: most dudes are motivated to work hard to support a family. If they don’t have one, or are not trying to get married, then they can be quite happy on a small amount of money.

      And that is where things get interesting. Because women will be happy to be the DEI consultant for a Fortune 500 company, they won’t want to work on a South Dakota oil rig.

      Women will take over Corporate America, just as a massive source of production (married men) collapses.

      Like

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