Morning Report

Vital Statistics:

	Last	Change	Percent
S&P Futures	1327.5	-8.8	-0.66%
Eurostoxx Index	2230.1	-16.1	-0.72%
Oil (WTI)	84.73	-1.1	-1.26%
LIBOR	0.455	-0.001	-0.22%
US Dollar Index (DXY)	83.75	0.185	0.22%
10 Year Govt Bond Yield	1.49%	-0.02%
RPX Composite Real Estate Index	183.8	0.2

Markets are lower this morning on global slowdown fears. There was no real catalyst for the sell-off, just general malaise. The 10-year is yielding below 1.5% and MBS are up a couple of ticks.

Initial Jobless claims came in lower than expected, at 350k vs 372k. The Labor Department noted that the typical temporary seasonal factory shutdowns haven't happened this year as the automakers fulfill demand and replenish inventories. A Labor Department spokesman refers to it as a "distortion", so don't read too much into the number.

There was nothing really earth-shattering in the minutes from the last FOMC meeting released yesterday. People looking for more aggressive action out of the Fed were disappointed. Operation Twist will continue through the end of the year, and the Fed will take further action if the economy deteriorates. The minutes did discuss Taxmageddon and also noted that defense contractors were already laying off people if the sequestration spending cuts kick in.  Surprisingly, they mentioned the Facebook fiasco as well.

RealtyTrac reported that foreclosure activity increased 9% sequentially in May, but is still down 4% on an annual basis. Pre-foreclosure sales are rising as banks focus more on short sales. Pre-foreclosure home sales have an average $27,000 price than the average bank-owned home. Since distressed sales are still driving the market, this could account for some of the increases we are seeing in the overall home price indices. Another interesting tidbit:  Judicial states posted a 26% year-over-year increase in overall foreclosure activity, while non-judicial states posted a 20% decrease.

The House Committee on Financial Services held a hearing yesterday on Dodd-Frank, mortgages, and the CFPB. It was a mix of industry groups and consumer advocates.  The fault lines appeared at the definition of a qualified mortgage, where industry groups wanted bright lines and safe harbor provisions while consumer advocates disagreed.

Finally, Paul Krugman isn't too happy with CNBC.