Ian: Upon further review, this has proven to be a potential clue and must be returned to the ... uh ... castle.
Oliver Plexico: Yeah, right, that's a clue, you're a police inspector and I'm Herve Villechaize!
Ian: What?
Oliver Plexico: You know the little guy on "Fantasy Island"?
"Year of the Comet"
This is the season of rejoicing, reflection, and remembrance, which can often lead to a change in lifestyle and beliefs. Already, we have seen a groundswell of Americans change their minds about the new healthcare law, and we would like to see it delayed, curtailed or dismantled.
There are several other areas where conventional wisdom, and deep-seated beliefs are being challenged, and those in control are saying...'upon further review.'
Item:
The Federal Reserve might go to zero interest rates or even negative interest rates, as a last ditch effort to force the banks to lend money. The epiphany is that ballooning balance sheet, and the inability to taper spending without Wall Street going into whine mode.
According to FT, two of the top five US banks have indicated they are prepared to charge depositors a fee for holding cash. This isn't the desired outcome, for which the monetary body was looking, but nothing else is working- banks are hoarding the money. It's fair to say that, upon further review, the Fed must come up with something to get cash into Main Street, and putting banks into an untenable public relations position, as it might be their last ditch effort to get this accomplished.
Item:
The National Oceanic and Atmospheric Administration (NOAA) reports that the end of the 2013 hurricane season on Saturday, November 30, will be marked by the fewest number of hurricanes since 1982. In fact, this year will rank as the sixth least active Atlantic hurricane season since 1950. NOAA and the Air Force Reserve flew 45 hurricane hunter reconnaissance plane missions over the Atlantic basin this season for a total of 435 hours...the fewest flight hours since 1966.
The communiqué was almost apologetic for this development, as it really makes arguing the need to wreck our economy, and paying third world countries $200 billion for climate change sins; a much harder pitch. Remember, in the days and years after Hurricane Katrina, we were told that a new paradigm in weather was here, and that each successive hurricane season would see more powerful, and dangerous storms. I would say, upon further review, maybe this climate change hysteria is a hoax, designed to guilt the West, and slow down capitalism.
Item:
Recommended
The Federal Student Loan Program, which the U.S. Secretary of Education Arne Duncan said is, "neither accurate nor fair to characterize...as making profits," is making the administration a ton of profits. Try $41.3 billion for fiscal 2013; putting it right up there with evil big businesses like Exxon Mobile.
The Health Care and Education Reconciliation Act of 2010 was a knockout blow to private lenders, leaving the student loan program to the federal government.
Supposedly, this was to make student loans cheaper and more accessible. Instead, these loans continue to soar, leaving students with unimaginable debt levels as they start out in life. Loan inflation has run unabated to the point where there is a bipartisan outcry for young adults to skip college. Certainly, with President Obama getting so many votes from young people and college graduates, there was justified excitement that the president might bring down the cost of college, and even forgive delinquencies.
It was even suggested by many that the White House was bribing the younger generation, with the implicit promise of cheap to possible free college tuition.
Delinquencies are on the rise (see chart); loans aren't cheaper, and, this administration is making a mint.
Upon further review, it's clear this administration has no interest in forgiving college loans, or making them cheaper (last year's profits could have provided 7.3 million Pell Grants of $5,645), or bending the cost curve of higher education.
Housing Permits
October housing permits data is out this morning, and in fact starts are usually the highlight of this report but thanks to government shutdown we only got the permits part. The good news is overall housing starts hit a rate of 1.03 million annually adjusted and that was the best result since June 2008. Starts were up 6.2% month to month and 13.9% year over year. However, most of the activity during the month was in multi-family units like apartments and condos which typically show volatility given their nature of being built in bulk. Still, single-family units did also increase, by a modest 0.6% to 620k. Single-family units were still down from the August high of 627k.
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