Morning Report - Job openings remain at highs not seen since 2001.

Vital Statistics:

	Last	Change	Percent
S&P Futures	1999.6	-1.0	-0.05%
Eurostoxx Index	3255.9	-11.7	-0.36%
Oil (WTI)	93.56	0.9	0.97%
LIBOR	0.232	-0.001	-0.34%
US Dollar Index (DXY)	84.37	0.135	0.16%
10 Year Govt Bond Yield	2.50%	0.03%
Current Coupon Ginnie Mae TBA	106.5	-0.1
Current Coupon Fannie Mae TBA	105.8	-0.1
BankRate 30 Year Fixed Rate Mortgage	4.2

Stocks are flat on no real news. Bonds continue their post-ECB retreat.

Consumer credit increased 9.7% year over year in July, according to the Fed. Note this does not include mortgages. Revolving debt increased 7.4%, while non-revolving debt increased 10.6%. 

Job openings remained steady at 4.7 million in July, which is the highest level since 2001. So why does the labor market stink? People don't have the skills employers demand.

Small business optimism increased by .4 in August to reach 96.1, the second highest reading since October 2007. Expectations are still glum, however as the majority of small business owners think conditions will be worse in six months. NFIB owners increased employment by an average of 0.02 workers (basically flat), however it was the eleventh positive month in a row. Earnings trends improved 1 point to -17. This statistic shows the stark contrast between the big S&P 500 names (which have a lot of international exposure) versus Main Street Small Business. Reading the report, you wouldn't guess the S&P 500 is at record highs.

Consumers continue to temper their expectations for home price appreciation, according to the Fannie Mae National Housing Survey. Consumers expect an average 12 month appreciation of 2.1% going forward. 42% of respondents thing house prices will increase, 45% expect them to stay the same, and 9% expect them to fall. 23% said their household income was significantly higher than it was a year ago (a drop from 28% last month), while 15% said their income was significantly lower than it was a year ago (an increase from 12% last month). So regardless of what the consumer sentiment surveys say, things are not necessarily getting better for the average homeowner. 

Mohammed El-Arian explains what is going on with US yields vis a vis European yields. Yields could rise in US Treasuries as f/x rates adjust to persistent European economic weakness. 

The Fed is contemplating capital requirements that will be even tougher than Basel. At the margin, this would mean less mortgage lending by the big banks like Wells and JP Morgan.