With mortgage applications down around 60% from their peak in April, the last best hope for sustained "recovery" in housing 'was' the cash-only bid from private equity and hedge capital in the REO-to-rent or flip-dat-house trades. As we have noted previously, that last pillar was starting to falter and as Bloomberg reports, it seems is now in full crack mode as Carlyle Group switches from marginal buyer to marginal seller in its $2.3 billion real estate funds. "Our capital was useful at the front edge of the recovery," the firm notes - implying the big gains are over as rent growth fades (as employment and income growth slows). Crucially, they add, "investors really want the new Class A properties so we’re selling into that demand." We assume that by "investors" they mean greater-fool bag-holders.
For today's quote of the day, we go to Boston Fed's president Eric Rosengren who just had the following pearl of wisdom:
- ROSENGREN: `REALITY DOESN'T ALWAYS LIVE UP TO OUR FORECASTS'
At least he didn't say it is reality that is wrong and the Fed's forecasts being fundamentally correct.
DHS Pretends It Still Has Privacy Officers ... When They've All Quit In Disgust
Five years ago today, the CEOs of the big banks visited one US president with one goal in mind: get billions in taxpayer dollars to get bailed out. Today, the same bank CEOs are once again at the White House, this time invited by a different president, "as part of the Obama Administration's ongoing efforts to mend relations with the financial services sector and woo their support for White House policy." One can assume that in addition to the trite generalities surrounding the shut government and the debt ceiling, one topic of conversation is how Wall Street can accentuate the severity of the ongoing governance crisis and most certainly includes such demands by Obama as "stop sending stocks higher when the only catalyst is my inability to create any sort of compromise."
Would Obama push his pals off a cliff to get a deal?
The New Normal: a world in which the best performing "asset" in the month of September was the stock market of bankrupt Greece, while silver, that historic store of value, was on the other end, performing the worst.
We need to quit our fucking whining and take some action in our lives.
It seems the non-negotiating red-line-making President is willing to umm... negotiate. Depsite Harry Reid's fire-and-brimstone, the WSJ reports that:
*OBAMA SAID TO INVITE CONGRESSIONAL LEADERS TO MEETING TODAY (at 530pm ET)
*OBAMA SEEKING FUNDING MEASURE FOR GOVERNMENT, DEBT CEILING HIKE
McConnell, Reid, and Pelosi are also to attend. Oh to be a fly on that wall? For now, equity algos are buying first and thinking later as bonds remain more stoic.
The question of Peak Government is ultimately a question of Peak Debt: how much money can the government borrow to sustain its current spending? Can public and private debt expand at rates four or five times that of the underlying economy? If so, for how long? If we are not yet at Peak Debt, we are getting close, and that means we are also getting close to Peak Government.
Not entirely surprising but the President is not amused at the House's "piecemeal" funding bill plans:
If the President were presented with H.J. Res. 70, H.J. Res. 71, H.J. Res. 72, H.J. Res. 73, and H.R. 3230, he would veto the bills.
Back to the drawing-board of "no negotiation" it would seem.
Odd that the mainstream media is not discussing the 4% spike in precious metals this morning as vociferously as they discussed the imminent demise of gold and silver yesterday. With stocks having given back all the Shutdown gains, gold and silver prices are surging higher retracing all yesterday's losses as Treasury yields fall and the USD weakens on EUR strength. It seems, perhaps, the spike in 1 month T-Bill yields (and inversion of the USA CDS curve) is being priced into other safe-haven assets...
$1,050/oz was identified as the likely level of support if gold weakens again in the short term - especially if gold falls below support at $1,200/oz. This was a possible scenario outlined in the closing session chaired by Dr Brian Lucey of Trinity College Dublin.
The nation's top intelligence officer, James Clapper, is worried:
- *CLAPPER: SHUTDOWN 'SERIOUSLY DAMAGES' U.S. NATIONAL SECURITY
and so is Senator Grassley:
- *GRASSLEY `CONCERNED' 70% US GOVT INTELLIGENCE STAFF FURLOUGHED
But - for those who care about personal privacy rights, there is a silver lining:
- *US GOVT SHUTDOWN HAS HIT NSA 'VERY HARD', AGENCY DIRECTOR SAYS
The president's total job approval for September inched up a point from August to 48%, his highest rating since May. But that’s still down eight points from December’s high of 56%. Furthermore, according to the latest Rasmussen poll (of these people?), it is noteworthy that 29% "Strongly Approve" while 38% "Strongly Disapprove," leaving the spread at -9 - which while still negative, is the highest since June surging this week as the showdown over the shutdown continues. At this rate, by the time the debt-ceiling debate is over - Obama will have the entire nation begging him for a 3rd term...
UPDATE: *NASDAQ, NYSE ARCA, AMEX OPTIONS REVOKE SELF-HELP AGAINST CBOE
The stock market is trading down - therefore, options markets have broken:
- *BATS OPTIONS HAS DECLARED SELF-HELP VS CHICAGO BOARD OPTIONS
- *BATS: ROUTING TO CHICAGO BOARD OPTIONS EXCHANGE SUSPENDED
- *NASDAQ OPTIONS MARKET (NOM) HAS DECLARED SELF HELP AGAINST CBOE
Seems that options markets were not broken last night as VIX was banged into the close?