All Things in Moderation

Vital Statistics:

Markets are a touch weaker this morning on some negative reports out of Europe and a drop in Spanish government bonds. There are no major economic reports out this morning in the US. Bonds and mortgages are slightly higher this morning.

Yesterday, CoreLogic released its Q411 report on underwater homeowners. They estimate that 11.1 million (23%) of residential homes with a mortgage are underwater. Nevada is in the worst shape, with 61% of mortgaged houses with LTVs over 1. Of the 11.1 million, 6.7 have a first-lien mortgage only with an average balance of 219k and is underwater by 51k, for a LTV of 130%. The remaining have home equity loans as well, with an outstanding principal balance of 306k and a combined LTV of 138%.  Aggregate negative equity nationwide is $717 billion and is concentrated at the low end of the market.

The NYT has a good article on ISDA’s decision yesterday that the ECB bond exchange on Greek debt did not constitute a credit event. If Greece puts through an involuntary exchange, that would trigger a credit event and the swaps would pay out. The article also points out that the bond used to set the payout will be different than the bond underlying the contract. So even if you were right on the Greek default, you may not be getting paid what you think you were.

The sell-off in bonds over the last two days has driven mortgage rates higher. Conventional mortgages are now 4.0% vs 3.875% a few days ago. If you are thinking about refinancing or buying and have questions about your rate lock, here are some things to consider.

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Not as good as Kevin’s efforts, I’m sure, but since no one else is stepping to the plate….

Depressingly, two Australian professors and medical ethicists have written a paper arguing that newborn babies are not actual persons, are morally irrelevant, and have no moral right to life.

The article, entitled “After-birth abortion: Why should the baby live?”, was written by two of Prof Savulescu’s former associates, Alberto Giubilini and Francesca Minerva.
They argued: “The moral status of an infant is equivalent to that of a fetus in the sense that both lack those properties that justify the attribution of a right to life to an individual.”
Rather than being “actual persons”, newborns were “potential persons”. They explained: “Both a fetus and a newborn certainly are human beings and potential persons, but neither is a ‘person’ in the sense of ‘subject of a moral right to life’.

After-birth abortion? I’m guessing the pro-choicers won’t be too happy with that nomenclature.
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The New York Times editorial board initiates it’s own war on biology in an editorial about an attempt in New Hampshire to repeal a law legalizing same-sex marriage:

Representative David Bates, the Republican who filed the repeal bill, argues that homosexuality is a lifestyle choice, and he even included a sentence that says: “Children can only be conceived naturally through copulation by heterosexual couples.” This is breathtakingly dangerous foolishness.

Ah, the breathtakingly dangerous foolishness of how babies are made.
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How about a little March Madness primer:

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Vital Statistics:

Markets are slightly better after a mixed bag of economic reports this morning. Personal income and spending were lower than expected, while the jobless report was slightly better. Initial Jobless Claims definitely seem to have found a new level around 350k, which for all intents and purposes represents “normalcy.”

Bonds and mortgage backs sold off on the data, continuing the slide that began after The Bernank offered his testimony yesterday.

Today is the first Thursday of the month, and that means retailers are releasing their same-store sales numbers for February. Reports are still coming in, but WalMart, Target, and the Gap are all up smartly on their reports. The unusually warm weather in the Northeast may have played a part in the comps. Most retailers have a January fiscal year, so some are announcing their fiscal year earnings as well.

So a default is not a default? According to ISDA that is the case. Bought credit default swaps on Greek sovereign debt? No credit event for you!

Remember the days of 5% commissions and going to the library to research a stock? – why there has never been a better time to be an individual investor.

Chart:  Initial Jobless Claims over the years:

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A Federal Judge blocked the FDA’s requirement that cigarette companies put graphic pictures of disease lungs, bodies on autopsy tables and other images on packs of cigarettes. He held that it violated the tobacco companies’ First Amendment Rights.

I like this quote from this NY Times article:

Paul G. Billings, vice president for national policy and advocacy at the American Lung Association. “This industry has been marketing its products to children for years in ways that have enticed them to use them — the Marlboro cowboy and Joe Camel — and what Congress said was fight back with all the same tools.”

That isn’t exactly a compelling First Amendment argument for upholding the FDA requirements, but I thought it was a good point. The real reason I like the quote is because the guy is the VP of advocacy at the American Lung Association. Is there an Anti-Lung Association? Who exactly is opposing the American Lung Association that they need a VP of policy and advocacy?

Here’s the opinion.

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I saw this over at Hot Air and thought it might be an interesting topic for lawyers and laypeople alike.  In a nutshell, the article claims that the individual mandate’s penalty constitutes duress and therefore negates the validity of the insurance contract. Further, since insurance companies will have to accept all comers, they are under duress as well.

The questions asked are, to me, really interesting. Whataya think?

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Prepared Testimony

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It will be interesting to see how the press covers Romney’s win in Michigan last night.

An article on Yahoo Calls it an important win.

Meanwhile, Dan Balz has a more measured take on the win. He questions whether a frontrunner should really have such a hard time winning a state where a grew up, where his dad was governor and where he won 4 years ago. A fair question in my opinion.

On a slightly more wonkish note, Romney’s Michigan win netted him only 14 delegates while Santorum got 12. This is because Michigan broke GOP rules by moving their primary up a week and lost a few delegates and also because the race was very close.

It will be interesting to see if Romney can turn the two wins into some real momentum heading into Super Tuesday and whether Santorum can successfully counter the perception that Romney had two big wins on Tuesday. Then again momentum may be red herring if the real reason for Romney’s wins were that he has more money and is better organized. Scott, care to opine?

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We sometimes call ATiM a grand experiment.

I’ve been given a chance at another grand experiment.  Fifteen grand of an experiment, give or take.

The theme is “Yay Me!  Yay Us!”  Interpret that as you will.  The budget is $15,000.

How would you spend it and what’s the result?

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Vital Statistics:

World markets are slightly firmer this morning on the back of in increased commitment from the ECB to lend to European banks. The ECB said it will lend 529.5 billion euros, much higher than previous commitments and higher than economists were predicting. Most sovereign yields are lower this morning with the exception of Portugal, which is blowing out again.

4Q GDP (this is the 2nd of 3 reports) came in at 3% vs the initial 2.8% reports. Personal consumption improved to 2.1%. The GDP price index and core PCE came in higher than expected. Bonds and mortgage backed securities are slightly stronger on the data.

The banking system is on the mend. The FDIC released its quarterly report on the state of the banking system yesterday, noting that lending has increased and problem loans have decreased. Profits have increased, but decreases in loan-loss provisions have been the main driver in that increase. Return on Assets is a paltry .76%, as financial repression (Bill Gross’s term for ZIRP) continues to weigh on bank profitability.

HUD Secretary Shaun Donovan testified before the Senate Committee on Banking, Housing and Urban Affairs yesterday. The questioning focused on the health of the FHA and Administration initiatives to help prevent foreclosures. The second panel included acting FHFA Director DeMarco, and the questioning focused on allowing principal modifications for Fannie and Freddie loans. This issue has been a bone of contention between the liberal wing of the Democratic Party who want mass principal forgiveness and DeMarco who is charged with maximizing value for taxpayers.

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Yesterday, I read through lms’s hiatus post and the comments on it. I’m not here much because of time constraints and health reasons, but I feel a connection to this discussion that goes back to a time on the Plum Line maybe a couple of years ago when I raised the issue of women’s voices in the public sphere. There was a wide ranging conversation that included a request of Greg to add a woman poster.

I  won’t try to reprise all the arguments here. But oddly perhaps, the one comment I remember most was from Cao. He said that the only scientifically proven psychological difference between genders was in competitiveness. I don’t know about the accuracy of that or what studies he was basing it on. But I think it offers one construct that may be useful in thinking about what happens on this blog and others.
 
While I know how very competitive women can be, it’s my sense that men and women differ in the nature of how we’re competitive, and that it has to do with both stakes and practicality. I’m going to offer only one anecdotal example here. I know my son and son-in-law will compete over something as trivial as who is quicker at solving the riddles on their kids’ Popsicle sticks, while the women in the family wouldn’t.
 
Translating this to the world of the blog is maybe a big leap, but I’ll try anyway. I think a lot of discussion on this blog and others has to do with the difference between constructing a point and winning a point. I know that when I’ve raised an issue to discuss and tried to state my case as clearly as I can that I don’t feel like trying to beat down every opposing comment, particularly if it feels tangential. I may try to state my position in another way that I hope will clarify it, but if there is still a lot of opposition noise that I don’t agree with, I am generally ready to exit the discussion. It’s not because I feel vanquished. It’s more because I see no point in trying to convince someone who by opinion and/or temperament won’t be convinced. I have other things to do.
 
I think ATiM is a great experiment, and it would be sad for it to collapse over a difficulty that has a lot to do with how a discussion is carried on. And it’s particularly sad to think that, as hard as lms has worked on this experiment, the climate may no longer feel welcome to her and perhaps to some of the other women. So let me ask this of those men who found themselves entrenched on the other side of the argument about women’s health: does trying to win a point that others may see as strained really make it worth coming across as indifferent to an issue of bedrock importance to the women who live it?

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