Joe Biden, truth teller?!? (Part I)

In the first of what will surely have to be an on-going series, let’s examine the proposition that President Joe Biden is that rarest of rare things, an honest politician.

Let’s start with his well-documented past deceptions and lies. And they are well-documented indeed, primarily because it was documented at a time when the media was still making nods to at least the pretense of being an objective and honest broker of information. Biden’s first run at the presidency in 1988 ended in failure when it was revealed that he was plagiarizing other people’s political speeches, most notably those of British Labour MP Neil Kinook, going so far as to even steal Kinook’s stories about his own family’s history. The late Robert Kennedy was also someone from whom he stole.

And it wasn’t Biden’s first foray with presenting other people’s work as his own. Back when he was in law school, he was caught plagiarizing from others’ work in one of his law papers. In a confrontation with a reporter, in which he prefaced his remarks with the Trumpesque braggadocio “I probably have a much higher I.Q. than you do, I suspect”, he claimed that he earned three degrees as an undergraduate, was the only person in his law school class to get a full scholarship, and ultimately finished in the top half of his law school class. All of these were lies.

During that 1988 campaign, his staffers tried to stop him from falsely claiming to have joined the Civil Rights marches of the 1960s, but the lie was repeated at several campaign stops. When the campaign was imploding on the back of the plagiarism charges, and Biden was struggling to stay in the race, he implicitly copped to the lie while trying to avoid admitting it, saying ““I find y’all going back and saying, ‘Well, where were you, Senator Biden, at the time?’ — you know, I think it’s bizarre. Other people marched. I ran for office.”

But the lies about his activism during the Civil Rights era didn’t start with his 1988 campaign. He’d been telling porky pies about it for years.

When Biden gave up on his 1988 quest for the presidency, he finally admitted:

”I was not an activist…I worked at an all-black swimming pool in the east side of Wilmington, Del. I was involved in what they were thinking, what they were feeling. But I was not out marching. I was not down in Selma. I was not anywhere else. I was a suburbanite kid who got a dose of exposure to what was happening to black Americans.”

That burst of honesty proved to be only temporary. By the time he was running for the presidency again in 2020, he was back to touting his imagined youthful activism again.

Of course, the 2020 campaign provided Biden with the opportunity to lie about all kinds of things, not just his Civil Rights (non-)activism. In South Carolina he told an audience that:

When I got out of the United State Senate, instead of taking a Wall Street job – and they’re not bad, I’m not making them bad – but instead of doing the things that I never did before, I figured I wasn’t going to change all these years from what I was comfortable doing. So I became a teacher. I became a professor.

Actually, the job he took when he left the US Senate was the job of Vice President of the United States. But aside from his confusion about the job he left in 2016, what he actually became at that point was the recipient of what was essentially a no-show job with a huge salary, an honorary “professorship” at UPenn in exchange for his name and a few appearances at “big ticket” events. He never taught a single student in a single class.

He also repeatedly told campaign audiences that he had been arrested trying to visit Nelson Mandela. Eventually he was forced to admit that it wasn’t true.

And it isn’t just his own personal history that he lies about. He’s an inveterate liar about policy. In his final debate with Trump, he claimed that “not one single person, private insurance, would lose their insurance under my plan, nor did they under Obamacare.” Of course, Obamacare literally outlawed certain insurance plans, resulting in many millions of people losing their insurance.

In that same debate he said ““I have never said I oppose fracking.” Sure, Joe.

During an earlier debate, speaking about Obama era border enforcement policies, he said “What Latinos should look at is, comparing this president to the president we have is outrageous, number one. We didn’t lock people up in cages. We didn’t separate families. We didn’t do all of those things, number one.” Whether one wants to call them cages or not, in fact the facilities used to detain illegal immigrants under Trump were the exact same facilities used to detain illegal immigrants under Obama.

In an interview with Anderson Cooper, Biden had this to say about his opponent, President Donald Trump:

Have you ever heard this president say one negative thing about white supremacists? Have you ever heard it? That’s the reason I got back in this race because of what happened in Charlottesville. People coming out of the woods carrying torches, their veins bulging. Close your eyes and remember what you saw. And a young woman gets killed, that resisting the hate and violence. And the president gets asked to comment on it. what does he say? He says there were “very fine people on both sides.” He wouldn’t even condemn David Duke, for God’s sake.

In 2000, Trump condemned David Duke as “a bigot, a racist, a problem”. During the 2016 campaign, Trump condemned and disavowed Duke over, and over, and over again.

As for white supremacy, Trump has repeatedly condemned it. In one White House address Trump said:

Racism is evil. And those who cause violence in its name are criminals and thugs, including the KKK, neo-Nazis, white supremacists, and other hate groups that are repugnant to everything we hold dear as Americans.

Even his infamous and much mischaracterized “very fine people” comments following the violence in Charlottesville, which is the basis for the Biden’s deceitful insinuation, Trump specifically said (12:55) ” I’m not talking about the neo-Nazis and the white nationalists, because they should be condemned totally.”

So is President Joe Biden an honest politician, or does it seem more like he is dishonest? On past evidence, it appears that he has been dishonest pretty much perpetually about his past, about policy, about other people, about his own actions, going all the way back to his law school days in 1966. We’ll see if he maintains his record for dishonesty while he remains President. Stay tuned…

 

COPIED RIGHT FROM VOLOKH

 

The Pennsylvania Senator offered an appropriate response to the Trump campaign’s failed election litigation

Jonathan H. Adler | 11.23.2020 10:34 AM

Over the weekend, a federal district court judge through (sic) out the Trump campaign’s effort to challenge the Pennsylvania election results in Donald J. Trump for President v. Boockvar. The strongly worded opinion by Judge Matthew Brann excoriates the Trump campaign’s legal team, their arguments, and their tactics.

In response to the ruling, Senator Pat Toomey (R-PA) issued a statement that is worth quoting in full, as it provides a model for how other elected Republicans should be handling the Trump campaign’s legal maneuvers.

With today’s decision by Judge Matthew Brann, a longtime conservative Republican whom I know to be a fair and unbiased jurist, to dismiss the Trump campaign’s lawsuit, President Trump has exhausted all plausible legal options to challenge the result of the presidential race in Pennsylvania.

This ruling follows a series of procedural losses for President Trump’s campaign. On Friday, the state of Georgia certified the victory of Joe Biden after a hand recount of paper ballots confirmed the conclusion of the initial electronic count. Michigan lawmakers rejected the apparent attempt by President Trump to thwart the will of Michigan voters and select an illegitimate slate of electoral college electors. These developments, together with the outcomes in the rest of the nation, confirm that Joe Biden won the 2020 election and will become the 46th President of the United States.

I congratulate President-elect Biden and Vice President-elect Kamala Harris on their victory. They are both dedicated public servants and I will be praying for them and for our country. Unsurprisingly, I have significant policy disagreements with the President-elect. However, as I have done throughout my career, I will seek to work across the aisle with him and his administration, especially on those areas where we may agree, such as continuing our efforts to combat COVID-19, breaking down barriers to expanding trade, supporting the men and women of our armed forces, and keeping guns out of the hands of violent criminals and the dangerously mentally ill.

Make no mistake about it, I am deeply disappointed that President Trump and Vice President Pence were not re-elected. I endorsed the president and voted for him. During his four years in office, his administration achieved much for the American people. The tax relief and regulatory overhauls that President Trump enacted with Republicans in Congress produced the strongest economy of my adult life. He also should be applauded for forging historic peace agreements in the Middle East, facilitating the rapid development of a COVID-19 vaccine through Operation Warp Speed, appointing three outstanding Supreme Court justices, and keeping America safe by neutralizing ISIS and killing terrorists like Qasem Soleimani and Abu Bakr al-Baghdadi.

To ensure that he is remembered for these outstanding accomplishments, and to help unify our country, President Trump should accept the outcome of the election and facilitate the presidential transition process.

Indulging the President’s continued efforts to delegitimize the election through frivolous litigation and conspiracy mongering is not patriotic. It is quite the opposite. Elections have consequences, and in this election the Republican presidential candidate lost. Republicans and others who supported Trump need to acknowledge this fact and move on, as Senator Toomey has.

Alas, there is reason to believe the shenanigans will continue. The Trump campaign filed a notice of appeal in the Pennsylvania litigation with the U.S. Court of Appeals yesterday, but did not ask the court to delay certification of the Pennsylvania results. Other suits remain pending in Wisconsin and elsewhere, and some Republican office holders are still seeking to prevent the certification of results in other states. None of this will overturn President-elect Biden’s victory. It will, however, continue to exacerbate tribal partisan divisions and undermine confidence in our institutions.

It is long past time for more Republicans to put country over party Trump.

 

Jonathan H. Adler (@jadler1969) is the Johan Verheij Memorial Professor of Law at the Case Western Reserve University School of Law.

Loony Lefty Jill Stein – Russia, Part Deux

Loony Lefty Jill Stein and the Russian influence investigation

Who is this loony? She claimed:

1] There are “real questions” about whether vaccines cause autism in children.

2] wi-fi in schools might be harming kids.

Her dependence on RT was notable:

3] RT regular Ajamu Baraka, who slammed the “gangster states of NATO,” was her choice for VP.

4] The only network to consistently cover her candidacy and invite her on air was RT.

5] RT hosted a primary debate for the Green Party.

6] She travelled to Russia in 2015 to attend that dinner where Putin lauded Flynn.

7] Shortly before that she attended an RT event and met with the Ambassador.

8] Claimed no knowledge of how and why Assange addressed the Green Convention on closed circuit to promote the wikileaks/Russian exposure of DNC emails.

9] Pretty much spouted the Russian lines about HRC throughout the campaign.

Now she claims that Senate committee interest in her Russian ties is an attempt to smear her and that she sees no evidence of Russian interference during the campaign season, because the intelligence community is often wrong.

Back in the day when the only foreign money in an American campaign was Canadian, MX, or Brit, generally from investors in multinational sellers like Schenley’s and Molson’s and Dos Equis, and generally to both parties, this was all tolerable. It was during the Clinton-Dole race when Chinese and Indian money went to Clinton and Saudi money to Dole in very big sums that we saw how campaigns could be bent and beholden. The Russians knew that this loony was a spoiler on the margins, and they knew that DJT was not a cold warrior R. Their objective was disruption and fragmentation of their adversary, and they could pick a D next time if it suited them, which it might well, against a traditional R.

I don’t know how we can possibly stop it from happening again. But somehow, keeping anti-American, as opposed to simply commercial, interests out of our campaigns would be a good thing. My guess is that the best we can do is continuing exposure.

Could we force American media voting ownership to be limited to American citizens? Would there be a constitutional bar? Could we create a credible ombudsman to expose the source of digital media rumors, in a timely fashion?  I wonder what the Intelligence Committees will advise.

And Jill Stein remains a complete loony.

The federal government is King George 7/12/17

In the Declaration of Independence, the Founding Fathers explained their departure from secession from the British Commonwealth by listing the King’s transgressions against them, among which were:

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

and:

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

How ironic that our government has become exactly that which the Founders rebelled against in the first place.

Morning Report: Comey fired 5/10/17

Vital Statistics:

Last Change
S&P Futures 2391.5 -1.8
Eurostoxx Index 395.9 0.1
Oil (WTI) 46.4 0.6
US dollar index 90.4  
10 Year Govt Bond Yield 2.36%
Current Coupon Fannie Mae TBA 102.6
Current Coupon Ginnie Mae TBA 103.81
30 Year Fixed Rate Mortgage 4.05

Stocks are lower this morning on no real news. Bonds and MBS are up.

Last night, Donald Trump fired FBI Director James Comey. This will excite the chattering classes and provide endless fodder for the media, but it shouldn’t matter much to the markets. At the margin, it will probably push bond yields lower.

Mortgage applications rose 2.4% last week as purchases rose 2% and refis rose 3%. Conforming and jumbo rates were flat, while FHA ticked up a few basis points.

Import prices rose .5% MOM and are up 4.1% YOY. Bonds are shrugging off the data, however it could be a sign of inflation creeping up. We did see a small sell-off in the dollar during April, but nothing of that magnitude. Something to watch.

We will have some Fed-speak this afternoon with Eric Rosengren and Neel Kashkari speaking at 12:30 and 1:30 EST respectively.

With all the data over the past week, Fed Funds futures are moving mainly for the September meeting, which now has a 40% chance of a 25 basis point hike, up from 20% about a week ago. June is currently pegged at 80%. The weak Q1 print so far has not had an effect on trader sentiment.

Good advice for the first time homebuyer who is also saddled with student loan debt. Waiting until the deferral period has passed helps. Also look at FHA loans, however there are caveats.

Boston Fed President Eric Rosengren warns that GSE reform could hit the multi-family market. F&F bear the credit risk of 44% of the multi-fam market, more than all the banks combined.

Job openings in the construction sector are higher now than they were at the peak of the bubble. Yet the hiring rate is just off the lows of the bust. This certainly corroborates the claim that a labor shortage is a big reason why housing starts are still depressed. Lots of skilled labor left the sector after the bubble burst and got jobs in the energy patch. There is only one way to square that circle and that is to raise wages to attract talent. Which means compressing margins if builders are unable to pass on that cost increase. Regardless, it doesn’t bode well for new home affordability unless we begin to see wholesale increases in wages across the US, which hasn’t been happening.

Morning Report: Ben Carson will run HUD 12/5/16

Vital Statistics:

Last Change
S&P Futures 2200.0 8.0
Eurostoxx Index 341.6 2.2
Oil (WTI) 52.2 0.5
US dollar index 91.3 0.0
10 Year Govt Bond Yield 2.41%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 4.14

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

Slow news day, for the most part.

The week after the jobs report is usually pretty data-light and this week is no exception. Today is the last day of Fed-Speak until the FOMC meeting next week. Bonds will probably be driven more by overseas developments than anything going on the US.

The Markit PMI Services index slipped in November to 54.6 from 54.8 the month before. The ISM Non-Manufacturing PMI improved as well to a strong reading of 57.2.

Donald Trump will nominate Dr. Ben Carson as the Secretary of Housing and Urban Development. Carson is expected to reverse the Obama Administration’s aggressive enforcement of fair housing laws, including the use of disparate impact. Suffice it to say, fair housing is going to take a backseat to reforming the GSEs and the mortgage market.

Tight credit remains a driving factor in today’s mortgage market as credit is loose for some people at the high end and tight for everyone else. In fact, PIMCO estimates that between 1 and 1.4 million people who were eligible for a mortgage in 2002 (before the big subprime explosion) are unable to get a mortgage today under the new rules and regulations. The knock on effects (like tight inventory and lackluster homebuilding) remain as headwinds to the economy as a whole. This not only includes mortgage credit to borrowers, but also bank credit to small homebuilders etc.

Bond funds continue to experience withdrawals in the biggest bond bust since the Taper Tantrum.

Morning Report: Home Prices within 1% of peak 11/28/16

Vital Statistics:

Last Change
S&P Futures 2206.0 -58.0
Eurostoxx Index 340.9 -1.6
Oil (WTI) 47.0 0.9
US dollar index 91.7 -0.1
10 Year Govt Bond Yield 2.33%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 4.14

Investors return to the markets after the Thanksgiving holiday contemplating a re-litigation of the 2016 Presidential election. Bonds and MBS are up.

Green Party candidate Jill Stein is requesting a recount in PA, MI, and WI. Donald Trump took to Twitter to condemn the effort and alleged that “millions” of votes were fraudulent. The Clinton campaign is keeping its distance but will watch to make sure outside players aren’t interfering with the process. If she manages to turn all 3 states, then she could win. One question that has come up has been whether Russia could have hacked the voting machines. That possibility looks unlikely.

Since the election, bank stocks have increased their market caps by $300 billion. The bet is that a roll-back of regulation will increase profits.

The highlight of the week will be the jobs report on Friday. The Street is looking for 170k jobs added, an unemployment rate of 4.9% and an increase in average hourly earnings of 0.2%.

The FOMC minutes from the early November meeting were a non-event, and the FOMC is definitely setting the stage for a December hike: “Most participants expressed a view that it could well become appropriate to raise the target range for the federal funds rate relatively soon, so long as incoming data provided some further evidence of continued progress toward the Committee’s objectives.” In fact, a “few” participants wanted a hike at the November meeting. The December FOMC meeting is in two weeks.

The FHFA raised the conforming limit from 417k to $424k. This was the first increase in 10 years. They also increased the high balance conforming limit to $636k.

Home Prices rose 0.1% in September and are up 5.4% YOY. Home prices are now within a percent of their peaks from June 2006.

Black Friday saw more shoppers, but less spending than in the past. About 154 million bought something in a store or online over the weekend, but they only spent about $289 as opposed to $300 a year ago. The National Retail Federation attributed the drop in spending to deep discounts offered by retailers. Black Friday online purchases were up 22% YOY.

Morning Report: Jeb Hensarling for Treasury? 11/18/16

Vital Statistics:

Last Change
S&P Futures 2184.0 -0.5
Eurostoxx Index 339.4 -1.2
Oil (WTI) 45.5 0.1
US dollar index 91.3 0.1
10 Year Govt Bond Yield 2.28%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 4

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

Bonds are ending their worst two week run in 25 years as the 10 year bond yield increased almost 50 basis points. Strategists are suggesting that the 10 year will be in the 2.5% – 2.75% range a year from now if Donald Trump manages to get his infrastructure spending plan and tax cut. The US dollar continues to strengthen as well.

So far, it looks like Jeb Hensarling is in the mix to take over as Secretary of the Treasury for Donald Trump. Note he is a politician, not a Wall Streeter. In fact, the banks believe he is a bit of an obstacle for getting real reform. Hensarling is generally viewed as not a friend of the big banks, and he really isn’t that interested in their input. Hensarling does have a plan to reform Dodd-Frank, which would include scrapping the Volcker Rule (which prohibits proprietary trading), reining in the CFPB, eliminating caps that banks can charge merchants for debit card transactions, and reforming the SIFI (systemically important financial institutions) rules. The big banks will need to raise a lot of capital in order to have more latitude however, as his bill requires a 10% capital cushion. Citi, for example, is at 7.4%, which means the banks would need to raise hundreds of billions in new equity capital.

The glory days of the CFPB are numbered. A court ruling that prevents the director from being fired and the potential for a business-friendly Trump Director has made it possible for a bipartisan consensus that the director be replaced with a 5 person committee, and that it be subject to Congressional appropriations. At least one expert believes that will slow down the agency and probably cut its enforcement actions in half. As of right now, if you are a graduate of a top law school and have an interest in financial regulation, the CFPB is the hot place to be.

Bottom line: we could get some regulatory relief, however it will be at the margin and probably not a wholesale change from what we have now. Will it be enough to get the private label securitization market back? So far I have not seen anything with respect to required equity tranches etc, so it is hard to tell. The only name for HUD I have heard is Westchester County Executive Rob Astorino, who is fighting HUD on zoning issues and affordable housing mandates.

After rising for several years, average home sizes are falling, as construction moves away from focusing in the high end to starter homes.

Morning Report: Potential Dodd-Frank reform 11/14/16

Vital Statistics:

Last Change
S&P Futures 2164.5 3.0
Eurostoxx Index 338.2 0.7
Oil (WTI) 42.7 -0.7
US dollar index 90.2 0.5
10 Year Govt Bond Yield 2.20%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 3.89

Stocks are up modestly this morning on no real news. Bonds and MBS are up again.

No economic data this morning, but we will have some Fed-speak in the afternoon.

About $1.2 trillion in wealth was wiped out in the bond market last week as yields soared in response to the Trump victory. The yield on Treasuries increased by 37 basis points last week. Bonds are reacting to (a) the potential inflation from a big infrastructure spending program, and (b) the potential for reduced trade and increased protectionism. Yields are now at highs we haven’t seen since January.

Richmond Fed President Jeff Lacker said that if Trump enacts a large fiscal stimulus plan, it might cause the Fed to move faster than the markets anticipate. Lacker will be a voting member in 2018.

One of the first jobs the new administration will tackle is to reform Dodd-Frank. The biggest piece of that will be to reform the CFPB, by making it subject to the Congressional appropriation process and to replace a single director with a bipartisan board. Banking stocks have been rallying since the election. Other rules would center around capital requirements and stress tests, which would mainly affect the smaller banks that don’t have massive derivatives portfolios or international operations, in an attempt to ease the regulatory burden on them. Democrats might attempt to filibuster any reform if it goes too far, but there probably is enough common ground in the Senate to make some sort of reform possible.

Could Donald Trump end up facing the nemesis of Bill Clinton’s first administration – the bond vigilante? Certainly if you take his promises at face value: a big uptick in spending with a massive tax cut, then you might see the creature that has been in hibernation since the early 90s resurface.

Morning Report: Will the late teens resemble the early 80s? 11/10/16

Vital Statistics:

Last Change
S&P Futures 2167.5 7.0
Eurostoxx Index 340.7 0.9
Oil (WTI) 44.9 -0.3
US dollar index 89.3 0.4
10 Year Govt Bond Yield 2.09%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 3.75

Stocks are higher this morning as the markets come to grips with a Trump presidency. Bonds and MBS are down.

Strangely, the 2 year bond is trading at 90 basis points, while the consensus is that we should be getting 2 more rate hikes by late 2018. This is even more surprising given the action in the 10 year. A poll of economists and strategists indicates that the Fed will still raise rates in December. Given the market action since Trump won, the Fed has every excuse to do so.

Trump will not ask for Janet Yellen’s resignation. That said, she probably won’t get re-nominated when her term expires in 2018. Donald Trump has been critical of Fed policy, insisting that rates should be higher than where they are now.

After an appeals court ruling, President Trump could fire CFPB Director Richard Cordray.

Mortgage Applications fell 1.2% last week as purchases rose 1% and refis fell 3%. The average interest rate for a 30 year fixed conforming mortgage rose 2 basis points to 3.77%.

Initial Jobless Claims fell to 254k last week as employers continue to hang onto their workers.

The conventional wisdom that a Trump victory would be stock bearish, bond bullish, and dollar bearish turned out to be dead wrong, at least initially. Stocks were destroyed in the wee hours of Wednesday morning, and then had a massive turnaround during the day. Legendary investor Carl Icahn probably singlehandedly cleaned up the sellers overnight, pouring $1 billion into S&P 500 futures. He was probably up about 6% on that trade by noon.

The overall feel to the tape is “risk on” and investors are definitely selling bonds to buy stocks. Financials, Pharma, and construction stocks led the charge. Surprisingly the homebuilder ETF (XHB) underperformed. Ultimately a Trump presidency should be bullish for housing, so I am surprised at the stock action.

The more I think about it, the more I believe the Trump presidency will most closely resemble the early Reagan Administration economically. Reagan took over after a long period of economic underperformance and shocks to the economy. Early in his administration, the Fed was tightening while fiscal policy loosened. I think that dynamic is going to play out here, as the government cuts taxes, deregulates, and spends on infrastructure while the Fed methodically raises interest rates off the zero bound. Ultimately the Fed has an easier job here, as they don’t have the raging inflation problem and any recession will probably be more mild since we are already at full employment. I don’t see a deep recession like 81-82 in the cards, however we are certainly in uncharted territory with monetary policy worldwide. The biggest difference is that that the early 80s ended a secular bear market in bonds that began in the 50s. This time around, we are ending a secular bull market in bonds that started in the early 80s. Note that we are also probably at the beginning of a secular bull market in stocks, just like the early 80s.

10 year long term.PNG

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