Morning Report - FHFA House Price Index

Vital Statistics:

	Last	Change	Percent
S&P Futures	1487.3	-2.1	-0.14%
Eurostoxx Index	2711.0	-5.7	-0.21%
Oil (WTI)	96.78	0.1	0.10%
LIBOR	0.301	-0.001	-0.33%
US Dollar Index (DXY)	79.76	-0.117	-0.15%
10 Year Govt Bond Yield	1.83%	-0.02%
RPX Composite Real Estate Index	192.2	-0.6

Markets are slightly lower this morning in spite of good earnings reports out of IBM and Google.  After the close, we get Apple's 4Q as well.  Mortgage Applications were up last week. Later on we will get the IMF world economic outlook.

The House will vote today to suspend enforcement of the debt limit through mid-May, in order to put pressure on the Democratically controlled Senate to pass a budget and to relieve the pressure on the debt ceiling crisis. Obama says he will go along with it. Which means the next subject will be the sequestration cuts.

The FHFA House Price Index rose .6% in November.  On a YOY basis, prices are up 5.6%.  The FHFA index only looks at conforming mortgages, which is more stable than the broader indices.  Prices are back to August of 2004 levels.

Is the roughly $1.7 trillion of foreign earnings stashed offshore by US companies something that is kept out of the US economy?  Turns out that a lot of it is in offshore accounts, invested in US dollar assets like Treasuries and MBS, which undermines the argument that all of this foreign cash could be circulated in the US economy if we changed the tax laws.  That said, this money is not available for expansion in the US or for distributions to shareholders.

The NAHB expects the housing upturn that started last year to pick up momentum, in spite of headwinds coming out of tight mortgage lending and potential tax changes. Using 2000-2003 as a baseline, the single-family market was running at 44% of normal production.  The NAHB forecasts 949k total housing starts in 2013.  From 1959 through 2002, 1.5 million units a year was considered "normal"

Jamie Dimon had some words for regulators at Davos. Suffice it to say that bankers loved it, and the chattering classes / political classes did not. If obama's inauguration speech was a full-throated defense of activist government, Dimon's speech was a defense of the private sector.