Thursday, December 23, 2010

SAR #10358

Focus on the signal, not the noise.

Neither/Nor:  The Continuing Resolution, which funds the government through early March, is a continuation of last year's funding and does not include money to implement laws passed this year.  Like health care reform.   And financial regulation.   Talk about starving the beast.

Comeuppance:  All 51 of the Senate's returning Democrats want to change the Senate's approach to filibusters, restoring the basic idea of “the majority rules”.   The Republicans rode a good thing into the ground.

Later Than You Think:  Remember the booming holiday shopping extravaganza that the Usual Suspects were predicting back when there were still turkey leftovers?  There may be a lot of shopping and even some buying going on, but very little of it at 'retail'.  Do you know a store that hasn't run its after-Christmas sales yet?  When the 30% Off! signs are up before Christmas don't you wonder how much better the deal will be next week?

Prognostication:  My thoughts on 2011?   What he said, waving both hands.

Competition:  The Obama administration, upon learning that S. Claus was also monitoring the behavior of US citizens without a warrant, has issued a heightened security warning for the holiday season.  Citizens are urged to be especially vigilant around the entrance to stores and malls where unidentified individuals in deceptive costumes have been sighted.

Ouch: A judge has ruled that MBIA can use statistical sampling to demonstrate that Bank of America fraudulently sought insurance for $21 billion of MBS.  The bank had insisted MBIA had to show that each of the 368,000 mortgages involved were fraudulent.  The results will be the same, but justice may arrive quicker.  The line is now forming to be next to take on BofA.

Chain Reaction:  Folks simply stopped refinancing their houses (down 25% from last week) as interest rates climbed, making it six weeks in a row of declines.  Mortgage applications (of all sorts) were down 18.6%, and the inventory of existing houses for sale increased 5.4% y/y.

Cures:  The libertarian stuff sometimes sounds good, especially if I'm particularly upset with the clowns in Washington.  The problem is that a little examination goes a long ways towards making most of it look like hollow posturing.

Exit Line:  Senator Arlen Specter used his farewell speech to urge some future Congress to do something he never had the guts to try - “to stop the Supreme Court from further eroding the constitutional mandate of separation of powers."

Supply and Demand:  If your income depends on getting mortgages in order to sell homes and the market is dead and mortgage rates are rising, what are the chances you might give in to the temptation to fudge a bit on the buyer's qualifications?  Pretty good, apparently.

Interest-ing:  US bond funds had $8.62 billion in net withdrawals this week, up from only $1.66 billion the previous week.  The last time withdrawals were this high was in October 2008 – the last time everything came unhinged.

Political Debts: What happens when California, Illinois and any number of other states finally have to admit that the numbers simply do not work?   They, and their creditors, will look to Washington.  And with the Party of No sitting on the Federal wallet, there's little hope for much help there, especially when the results of letting the states dangle will be massive employment cuts, draconian cuts in social welfare, the decimation of public employee unions, vast reductions in social services – the entire Republican platform.  And even with all that misery there's little hope that any effective long term solution will be found.  Or is findable.

Porn O'Graph:  Correlation isn't causation, especially when there's no correlation.


Anonymous said...


Notice the beginning of the same speculative uptick in Oil that we had in 2007/08 in you chart? Pair that with your Bond withdrawal post and the state of the States and 2011 is poised to be quite an adventure.


CKMichaelson said...

RBM - Good to see that a few of you actually do the "Some Assembly Required" that completes the Gestalt.