Monday, August 12, 2019

Today's links

1--Lower Mortgage Rates Aren't Boosting U.S. Housing

Federal Reserve Chairman Jerome Powell is facing a housing conundrum. The market is in the midst of a 15-month slump, with home price gains and sales having slowed dramatically and permits to build new dwellings slumping by 6.6% to the lowest level in more than two years. This despite a big drop in market interest rates thanks to the Fed’s dovish pivot earlier this year.

Of course, a recession would pull down prices and solve the affordability problem (a National Association of Realtors index shows housing is less affordable now than any time since before the financial crisis). But a recession is exactly what Powell hopes to avoid by lowering benchmark interest rates that are already near historic lows. The thing is, though, 30-year mortgage rates are already at a very low 3.75%, down from almost 5% in November, and housing hasn’t responded. Applications to purchase a home have declined for four weeks running according to the latest Mortgage Bankers Association data. It’s not clear that even lower rates will help....

The value of residential construction is 7.8% lower than the first six months of 2018, accelerating a trend that’s seen a persistent contraction for six quarters, the longest stretch since the last recession.  ...

Existing home inventories have been on the rise since late last year. Coupled with the industrial recession, that trend of supply hitting the market should continue to weigh on prices until demand rises to close one deal at a time. Boomers won’t like taking the haircut, but it beats the alternative, which is a disorderly downturn. It’s all bets off if stocks or bonds or both correct, taking a third swipe in as many decades at boomers’ retirement savings and prompting housing speculators to rush the exits.

2--Rick Santelli--The race to the bottom --Treasuries rally while rates fall

30 year --2.155  lowest 


3--How are Treasurys doing?


The 10-year Treasury note yield TMUBMUSD10Y, -4.02% slipped 4.1 basis points to 1.670%...e the 30-year  retreated 3.8 basis points to 2.203%.

Demand for safe assets like Treasurys continued to pull global government bond yields lower as investors juggled with simmering trade tensions between U.S. and China, U.K.’s grind toward a no-deal Brexit, and the steady drip of anemic global data. The worsening growth backdrop has, in turn, raised expectations that the Federal Reserve will cut rates again in September, following a quarter point cut in July.

We are still looking for 10-year yields to target the 1.5% level as global demand outweighs supply,” wrote Tom di Galoma, managing director of Treasurys trading for Seaport Global Securities.

4--Why are rates so low?

Interest rates are market prices, which means they are a function of the supply and demand of bonds. There is plenty of supply—the US is running a many-trillion dollar debt and needs to sell bonds to pay for it—but not enough to satisfy all the demand for its debt at higher interest rates. The demand is driven by an insatiable desire for low-risk assets. Bonds are generally seen as a less risky asset than stocks. Unlike most other assets, they offer certain payments for a fixed amount of time. Even if the company or country that issued the bond goes bust, bond holders are often still paid something

5--John Bolton arrives in London to shape UK policy on Iran


6--Bruce Ohr 302s by Larry C Johnson


First, Christopher Steele was terminated as an FBI Confidential Human Source at the end of September 2016 for leaking to the press. That should have put an end to the relationship. Instead, the FBI starts using Bruce Ohr, the number four guy at the Department of Justice, as a cutout. Absolutely  no justification for this kind of behavior by the FBI. It is, at a minimum, unethical and creates a real problem if any of the info collected from Ohr was to be used in a court proceeding. Something known as the "fruit of the poisonous tree" would kick in and the so-called evidence proffered by Ohr would be inadmissible or unusable because of Steele's previous lies to the FBI.

Second, Glenn Simpson played a huge role in helping spread anti-Trump propaganda generated by Steele. In fact, it was Simpson's insistence on Steele speaking with the press that got Steele terminated as an FBI source.

Third, the FBI knew by mid-December 2016 that Bruce Ohr's wife, Nellie, was working with Simpson and Steele. This too should have set off alarm bells about the potential conflicts of interest and unethical conduct. 

Fourth, evidence used ultimately against Paul Manafort came from Nellie Ohr. If this was not disclosed to Manafort's attorney's there is a likely Brady violation, which bolster's Manafort's prospects for an appeal....

Ohr's report that Simpson and Steele were communicating with the State Department, including Assistant Secretary Victoria Nuland and Kathleen Kavalec makes it clear that State Department was used as a front to pass on info from the questionable Steele Dossier. This information was used in the FISA warrant and provided a seemingly reliable justification for spying on Carter Page (see the Page FISA warrant here.) And finally, Fusion GPS, which was hired on behalf of the Clinton Campaign, was regularly communicating and coordinating with Obama's Department of Justice and Department of State. This was a complete abuse of power


July 30, 2016 Steele met Ohr for breakfast. Steele claimed Carter Page had met with Russian Sechin at a conference.
States that Glenn Simpson hired Steele and Ohr’s wife to dig up dirt on Trump’s connections to Russia...
Ohr contacted by Steele via What’sApp on 31 January 2017. Was reacting to firing of Sally Yates. Worried that if Ohr got fired he would have no one to talk to.
“Interviewing agents asked Ohr to ask Steele if he would be comfortable getting the name of an FBI agent.”
Ohr reminded agents that Steele had spoken several times prior to 2016 Presidential election with Deputy Assistant Secretary of State Kathleen Kavalec

7--Case Dismissed

Judge Koeltl goes further and asserts that WikiLeaks, as a news organization, had every right to obtain and publish the emails in exercise of a fundamental First Amendment right. The judge also specifically notes that no evidence has been put forward by the DNC that shows any relationship between Russia and WikiLeaks. WikiLeaks, accepting the DNC’s version of events, merely contacted the website that first leaked some of the emails, in order to ask to publish them. 

Judge Koeltl also notes firmly that while various contacts are alleged by the DNC between individuals from Trump’s campaign and individuals allegedly linked to the Russian government, no evidence at all has been put forward to show that the content of any of those meetings had anything to do with either WikiLeaks or the DNC’s emails.
No Evidence

In short, Koeltl dismissed the case entirely because simply no evidence has been produced of the existence of any collusion between WikiLeaks, the Trump campaign and Russia. That does not mean that the evidence has been seen and is judged unconvincing. In a situation where the judge is duty bound to give credence to the plaintiff’s evidence and not judge its probability, there simply was no evidence of collusion to which he could give credence. The entire Russia-WikiLeaks-Trump fabrication is a total nonsense. But I don’t suppose that fact will kill it off

8-Climate change reports warn of a world on the brink

12 August 2019
Last week’s reports from the United Nations Intergovernmental Panel on Climate Change and the World Resources Institute point to the increasing risk of a climate change-induced environmental catastrophe inflicting untold suffering on billions of people.
The UN report, “Climate Change and Land,” demonstrates that 821 million human beings already suffering from hunger face starvation as the land on which they depend for sustenance loses its ability to support agricultural infrastructure. These men, women and children are part of a broader 3.2 billion people who are living in areas that will be eroded, flooded, turned into deserts or destroyed by wildfires, hurricanes or cyclones in the coming decade

9--Who wanted Jeffrey Epstein dead?


10--US banks hope to avoid the fate of those in Europe

Falling long-term interest rates create challenges, but a more dynamic economy will help

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